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The Long Tail : a tail tale

By Priyal Goel


Delving deep into the dynamics of our model of Demand and Supply, we realize the limitations we miss out in the paramount assumption ‘that supply steps into the shoes of restricted shelf-storage.’

When you restrict the supply of goods, a seller tends to rely on the principle of 'Survival of the Fittest ' i.e commodities that realise the greatest profits, win a seat on the shelf. And that's how demand and the hit culture is framed.

One of the problems with physical goods is that they force us into crude categorisation and static taxonomies. But what happens when we relax these conventional assumptions of retail ?

Seemingly, what we thought was the rising tide of "Hit Culture" actually cares less about the creativity and more to do with the shepherding effect of commodity distribution.

The exponential growth of globalisation, culminating into our growing affluence has allowed us to shift from being bargain shoppers merely buying commodities broadly to becoming mini connoisseurs, flexing our taste with a thousand little indulgences that sets us apart from others.

We live in a world of mass scale customisation, where the fecund thinking of our behavioural scientists has given rise to ingenious theories of consumer mindset.

‘Unlimited selection’ reveals truths about what consumers want and how they want to get it. As they wander farther from the beaten path they discover their taste is not as mainstream as they thought.

From a world of limited choice and scarcity, with online distribution and retail, we are rapidly entering a world of abundance. The efficiency and success of online retail have illuminated the cost of traditional retail's inflexibility and taxonomical oversimplifications.

Nevertheless , perhaps the greatest gift to behavioural sciences would be the idea of Long Tail.

The Long Tail curve aims to incorporate those sales, which a retailer having restricted shelf space would never take into consideration. It bolsters the aggrandisement of niches and widens the scope of Free Market.

As Kevin Laws puts it, the biggest money is in the smallest sales!

The 80/20 rule of Business strategy expounds that 20 percent of products account for 80 % of revenues thus establishing a certain hegemony of a minority of products over the total sales.

Long tail offers encouragement and asks stakeholders not to get dominated by that rule. When costs of increasing inventory are virtually none and regardless of the volume of its sales, with good search and recommendations, a bottom 80% product could turn into a top 20% product.

When we look at the long tail market of the internet, most successful internet businesses are capitalising on the long tail in one way or another. Google makes most of its money not from huge corporate advertisers, but from the small ones. By overcoming the limitations of geography and scale, companies like these have not only expanded existing markets but more important they've discovered entirely new ones.

Give people unlimited choice and make it easy for them to find what they want and you discover that demand keeps on going to niches that were never even considered before.

For instance, Netflix reshaped the economics of offering niches in streaming content and improved our understanding about what people actually want to watch.

The innards behind Long Tail believe in bestowing equitable opportunities to the producers as well as the consumers. The consolidation conforms three golden forces :

  1. Democratise production - Let everyone access the factors of production and witness huge increase in the number of producers. The device through which I am conveying Chris Anderson's idea of Long Tail, provides me with endless possibilities to gain prominence for the spadework. As a result you can proffer many more alternatives.

  2. Democratise distribution - Long tail aggregators focus on hyper efficient digital economies creating new markets and marketplaces. The typical example that we are all familiar with is YouTube and its tale of success. Now, the economics of niches is roughly the same as hits. Consequently, profits are found at all levels of popularity.

  3. Connect supply and demand - long tail filters stimulate the ability to tap the distributed intelligence of millions of consumers to match people with the stuff that suits them best, essentially serving as the new tastemakers . The hunt behind that perfect set of headphones can never be complete without scavenging Amazon reviews. Thanks to the filters and recommendations, the sales are spread much more evenly between products under “hits” and “niches”.

Digital distribution widens the possibility field by eliminating the tyranny of geography and it also shortens the search time . Over time, this should increase sales and grow the overall market.

However, as we witness the other side of the story, we can assess the increasing indecisiveness due to climbing assortment for our target purchase. As the number of choices keep growing , negative aspects of having a multitude of options begin to appear. as the number of choices grows further, the negatives escalate until we become overloaded.

At this point, choice no longer liberates, but debilitates. It might even tyrannise us!

To conclude, the paradox of choice is simply an artefact of the limitations of the physical world, where the information needed to make an informed choice is taxing. Variety alone is not enough, we also need information about that variety and what other consumers before us have done with the same choices .


Priyal is an economics sophomore at Hansraj College, keen on discourse concerning consumer behaviour, development studies, determinism and innards of statesmanship.

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