Session 2

The Long Tail concept

By: Sarah AKIL Radwan Nachabé

What is the Long tail concept? The long tail is the colloquial name for a long-

known feature of statistical distributions that is also known as "heavy tails", "power-law tails" or "Pareto tails".

Long tail refers to the fact that the sum of the items in the tail generally tends to be more than the quantity available in the rest of the curve.

Due to the low cost of storing and distributing digital content, this concept can sell much larger variety of items compared to the traditional stores.

To apply the Long Tail concept, you should pick the entire 100% items which give you the 100% of returns.

For customers of some companies, being online means unlimited "shelf space" - access to hundreds of thousands of bits of information, products and services they'd never been exposed to otherwise.

One Long Tail

Trafford paperback variant distribution

Multiple Long Tails

1

LSI - Ingram USA paperback2

LSI - Ingram UK paperback 3

BoD Germany paperback 4

BookSurge paperback 5

eBook (as PDF) 6

eBook (as download) 7

LSI US & UK hardcover 8

BoD hardcover 9

Audio book (download only) 10

Showing only some tails. Adding a tail will build both awareness and availability – and expands the market

Bruce Batchelor [email protected]

Amazon and the long tail concept

Amazon is an example showing us the new connection of supply and demand thru technology and the Internet.

Amazon= Online shopping for millions of new & used books on thousands of topics at everyday low prices.

When everything in the world becomes available to everyone A market that never dies is created... markets for every niche, and vice-versa.

2 necessities for long tail concept:

1. Make everything available

2. Help the customer find it

1 2 3 4 5 6 …

Conventional

80:20 Rule

Number ofcopies sold

Ranking

Conventionally, retailers concentrated on the 20% of titles that bring 80% of the business, and avoid the other titles. A boutique bookstore carries 10,000 titles; a superstore stocks 130,000 max


Number ofcopies sold

130,000th

Best Selling Title

1 2 3 4 5 6 7 8 9 …

The “Long Tail”

Ranking

Amazon.com discovered that 25% of its book sales come from titles in its ‘long tail’, i.e. beyond the 130,000th bestselling title – these are titles which bricks & mortar stores can’t economically keep in stock

See “The Long Tail” article by Chris Anderson, Wired Magazine, October 2004; his book with the same title was published July 2006 by Hyperion


In traditional retail, you have the 80/20 rule, with 20 percent of the products accounting for 80 percent of the revenue.

Online, instead, the customer sees the "98 percent rule." Where 98 percent of all the possible choices get chosen by someone, and where the 90 percent that is only available online accounts for half the revenue and two-thirds of the profits.

eBooks – after 10 years of hype and non-event, what’s happening now?

•About 200,000 units sold per month globally (~$20M annually?)

•Competing formats => re-purposing/conversion costs are high for limited sales

•Yet many vendors and manufacturers are fascinated with the potential

•Digital content aggregators – GLS/CodeMantra and LibreDigital


Long tail concept most important points :

1. Make as much as possible available to as many people as possible. 2. Help them to locate what they need, quickly and easily. 3. Offer maximum inventory only online. 4. Customize supply chain in terms of niche markets 5. Maximize its efficiencies and economies

Documents

Session 2