The Long Tail Revisited
Two years ago, I wrote about Chris Anderson and his book, The Long Tail . A quick summary is that in a brick and mortar world, retailers want their shelves filled with their most popular items in order to maximize profit from the physical limitations of their stores. However, in a digital world, shelf space is essentially infinite and free, so offering maximum choice is a better strategy. An item may only sell once a year, but if you have enough of those items, they can generate enough profit to rival the income you make from more popular items. There are several well-known online companies that are built on this business model: Amazon, iTunes and Ebay. They each offer a wider selection than physical stores are capable of and have enlarged the market for their products as a result. These companies are often referred to as aggregators, as they pull together lots of products under their virtual roofs. The long tail has been criticized as a theory. Anita Elberse is a marketing prof...