Saturday, January 23, 2010

The Long Tail

I work in a flower shop, and each day I go in, it’s my job to maintain the cooler. The cooler is essentially a massive walk-in refrigerator where we store and display our flowers for customers. It’s approximately 15 ft long and can house around 36 buckets of flowers.


Maintaining the cooler (i.e. filling it with new flower shipments, keeping it clean, putting the buckets in order of price) is hardly a challenging task. I always need to start with the roses; they’re by far our biggest seller. In fact, about a quarter of the cooler is devoted to roses, and half of that space is devoted to red roses. After roses come carnations, seasonal mixed bouquets (tulips in spring, holly boughs in winter, etc) and then flowers sold by single stems. Rarely does the arrangement or variety change.


But what happens when a customer comes in and requests something unusual? Perhaps a cymbidium orchid here, a purple calla lily there… we don’t get these requests very often, but we do get them. In fact, I’d say that each day I have to tell a customer we don’t carry an item they’re looking for because it’s not popular enough to keep in stock. I mean, we only have much cooler space and we wouldn’t dare take any of it away from those precious roses!


Chris Anderson understands our shop’s problem, but he proposes that it’s not a problem at all. Instead, he theorizes that our lack of space for unusual products is actually the opportunity to develop an entirely new market. A niche market, made up of items that fall into the long tail.

(Photo Courtesy of USAplayers.com)


The long tail, as Anderson describes it, is the 80% of items in a retail market that don’t qualify as “best” seller

s. For instance, in the music industry, only a certain few artists will have top selling albums that generate enormous global popularity. In a typical music store, space is hardly infinite. So by the time they’re done filling shelves with those music hits that make up a mere 20% of the market, there’s not much area left for that other 80%. Sure, there will be the occasional shopper who wants an album from that 80%, but it simply isn’t worth it to the music shop to stock an item that a) won’t sell well and b) will take space away from the albums that substantially

better.


If the space in a music shop were infinite, though, that 80% could perform impressively well. If the public bought even one of each item on that “tail,” the sales could collectively compete with the top 20% of the market. Th

e industry prospers with an entirely new area of thriving sales, and the consumer benefits with a wealth of v

ariety.

Anderson explains that the internet has provided just such circumstances. The web and online retailers have provided that “infinite” shop space to give those niche markets a chance to shine. Of course, the concept doesn’t apply only to music either. Books, movies, and countless other industries are also benefiting from the long tail principle.


Photo courtesy of Netflix, via www.thelongtail.com


“When you can dramatically lower the costs of connecting supply and demand, it changes not just the number

s, but the entire nature of the market. This is not just a quantitative change, but also a qualitative one, too,” Anderson says in his book, “The Long Tail.” (Anderson, p. 26)


What Anderson has keenly realized is that the internet has not only made buying faster and easier for the consumer, it’s revolutionized capitalism. Supply no longer hinges on significant demand. Now, supply is infinite and waiting for demand. The people will tell retailers what they want, not the other way around.

In a way, doesn’t that make for a more democratic marketplace? A world of consumption by the people, for the people—where every voice is represented and catered to. As this trend of business continues to prove successful, it’s only reasonable to assume other aspects of our culture will follow suit. Perhaps schools won’t teach only English and Spanish, perhaps Japanese could be on the curriculum too for those who want it. Maybe our government won’t be restricted by the principles of a single deity, making a true distinction between church and state. Or, maybe the long tail could influence something as simple as making enough room for Conan and Leno, so viewers can choose what they personally want, not what ratings (or should we say corporate politics) dictate.


Anderson seems to think that we’ve only seen the beginning of this long tail. “Bringing niches within reach reveals latent demand for non-commercial content. Then, as the demand shifts toward the niches, the economics of providing them improve further, and so on, creating a positive feedback loop that will transform entire industries—and the culture—for decades to come.” (Anderson, p. 26)


So here's to a new frontier. One where, hopefully, one day, I can tell people that they can find their fancy orchids online...cause let me tell you, I'm getting tired of the same damn things being in that cooler everyday just as much as my customers are.


Citations for this Analysis

Anderson, Chris. The Long Tail. 1st ed. New York: Hyperion, 2006. 26. Print.

Anderson, Chris. "The Long Tail." Wired Magazine Oct. 2004: n. pag. Web. 23 Jan 2010. .

"The Long Tail." youtube.com. Web. 23 Jan 2010. .

Anderson, Chris. "The Long Tail." www.thelongtail.com. 11 12 2009. Wired Magazine Blog network, Web. 23 Jan 2010.

5 comments:

  1. Chris Anderson does understand your shop's problems and you have given a very interesting way of looking at it. Thanks for sharing. I think your blogspot is very nice. I need to learn how to copy pictures and graphs into my site. Can you help me?

    ReplyDelete
  2. I was also in the flower business myself, but, mostly as a manufacture of artificial trees and interior design products. I always had to as a wholesaler had to carry every color of silk flora, 180 varities of silk tree stems, nand various other products. I was put out of business by the outsourcing of less quality products from China and there was no way that I could ever compete with the cheap labor costs that the Chinese manufactures paid their help only 25 cents an hour; whereas i had to pay my designers' $15.00 dollars an hour. Of course my product line was much nicer and very well constructed, however, my clients during the economic downturn bought or directly imported products online from China. I do understand this is now a global economy and customers do have the rights to purchase products from whomever they choose; but, it was very hard for me to lay-off my employees whom worked for me for ten or more years. I think that the United States has to do more to protect small business in this country by evening the playing field with these Asian countries because it is causing the demise that we have all seen and felt right here in Michigan and elsewhere. Capitalism in my opinion has many flaws; and needs to be modified because the middle-class is disappearing fast in the United States.

    ReplyDelete
  3. Hello, I love your website and it is one of the best that i have previewed so far; I just wanted to add my site address www.thefutureoftheworldwideweb.blogspot.com/ Thanks, Suzanne

    ReplyDelete
  4. I absolutely ENJOYED reading your blog post. It was very informative and relevant to what we read in Anderson's book, watched through his videos and even from his article. I loved how you related everything to the flower shop. I still remember you talking about that shop back when we used to be in Spanish together.

    Great sense of humor in this blog post. I'm starting to think and agree with Anderson that this long tail may just be at its beginning phase. There's probably more to come.

    ReplyDelete
  5. Fantastic!! Love how you begin with a compelling story that weaves directly into the topic. It provides a great example of the world prior to the long tail of digital distribution. I'm sure there are online sellers who will overnight all of the varieties you mentioned. While not big sellers, those online retailers are able to reach far more customers. That said . . . I"m still a fan of the local flower shop. Great work!!!

    ReplyDelete