In 2004 Wired Magazine writer Chris Anderson wrote an article describing the niche business strategies of companies such as Amazon.com and Netflix. Both companies sell a large number of unique items in historically small quantities. The article begat a book entitled The Long Tail: Why the Future of Business Is Selling Less of More, and is one of most impactful marketing book published in the past decade. The book could be classed together in the recent genre of social phenomenon and behavior books that trend in unexpected ways (think of The Tipping Point, Blink, Sway, and Outliers), but The Long Tail’s concept accurately describes the opportunities that now exist for entrepreneurs.
True to its title The Long Tail describes how we have moved from an information age to an age of choice. These choices create a market place with many more products making up the majority of customer demand. The music industry is a great example. In the 1950’s and 60’s most of the music sold in the U.S. came from a small number of popular albums and top 40 singles. Today that same large percentage of sales comes instead from tens of thousands of artists that develop small communities of consumers. Grown from consumer frustration with the old model, consumers today seek more individual choices and look for products and services that reflect their own individuality.
Coincidentally, the Information Age created the mechanism for The Long Tail. Consumers spread the word of new and unique products through blog postings, social networking, and email. Not convinced? Consider this scenario: A small web site selling American made wooden toys is suddenly flooded with orders when groups of parents realize that many of their kids’ existing foreign-made toys are coated with lead based paint. Or the small indie band turns down a national recording deal realizing that they can market more effectively and reap larger profits operating on their own.
The Long Tail presents a compelling look at this new economy and small business owners can glean a tremendous set of potential opportunities for themselves.