Friday, December 15, 2006
The Long Tail
Essentially, as I understand it, one of the big changes in the future is that consumers will be driven much more towards niche products than in the mass-market offerings traditionally available. One of the reasons is that shelf space is virtually infinite in the digital world, whereas it is a costly commodity in the physical realm. Therefore, customers now can afford to be as choosy as they wish. We will not need to accept "good enough" - products that suit us can be chosen to maximum effect.
It puts the 80/20 rule on it's head: 80% of all customer demand in the future will be inside the "long tail" - typically that 80% of products that traditionally accounted for 20% of all sales.
I have my doubts as to whether the 80/20 rule disappears completely though, as 80/20 is about much more than just shelf-space or channel capacity. Interdependence and viral communication can generate huge demand for single products simply by them being in the right place at the right time and gaining the interest of highly influential individuals. In any case, I may have taken this up wrong, and I should read more about it.
The idea is the brainchild of Chris Anderson, Wired Magazine editor-in-chief and more details can be found at his Long Tail blog. He provides a summary of the theory and has recently published a book on the subject.