A couple of weeks ago I finished reading Chris Anderson’s The Long Tail. I spent time mulling over some of these ideas and trying to look specifically at the book industry. Here’s my summarized account of what I think Chris is saying.
Online channels allow customers to pick from a full range of products and services. More choice means the hits sell less because a percentage of the people who would have bought the hit (if it was the only option available) have moved down the tail, discovering products more closely tailored to their needs, personal style, taste, budget, etc.
In order to increase revenues and optimize profits, companies can no long rely on the hits. They need to find ways to engage with customers on their own terms (online, anonymous, search-driven) and expose them to the tail (full range) of products.
How do I think publishers going to do that? By …
– Studying their customers’ behaviour.
– Looking at trends in online purchasing.
– Paying attention to their web stats to understand what their customers are doing online.
– Placing importance (and budget) on online sites that are searchable, filter-friendly, and include recommendations and ranking systems or any tool that allows for further customization or tailoring by the user.
I think The Long Tail is screaming out for all companies to rethink their physical assets and determine what digital components already exist or can be created. If you get past step one, then you can figure out the business model.
In book publishing, we’ve been aware of the long tail for years. We call it backlist. Publishers have historically looked at ways to balance the ratio of sales of frontlist titles (new titles) to backlist titles (titles published 6 months ago or beyond). Even if that split is 40-60, publishers mostly put time and money into selling and promoting the frontlist. I assume the theory is that if you can get the new books going, then they happily carry on without a lot of effort. But what Chris is saying is you could sell a lot more with a little effort.
I suspect that publishers will continue to obsess over the hits, but Chris is pointing out that sales are no longer coming from one channel–independent stores, chain stores, wholesalers, discount stores, online retailers–customers are no longer gathering in one place, “they are scattered to the winds as markets fragment into countless niches.” But the one big growth area is the web.
Why? Because customer behaviour is changing. Internet connectivity in Canada is widespread. People have access to cultural content across a broad spectrum. Their attention is sought after by content creators from the mainstream to the fringe to the underground. But what still drives purchases are recommendations from trusted sources, recommendations tailored specifically to one’s needs and interests. The web is perfectly positioned to aid in that search for book recommendations. We can search online for extra information, we can read about the author, maybe hear a podcast, we can send our friends links to books we like, we can write reviews on book sites. We Google, we Yahoo, we MSN, we blog, we email, we browse. It’s a time of infinite choice, and the web is the land of infinite discovery.
The Long Tail is about how technology is turning mass markets into millions of niches, what people do at a niche level, and how to filter and reference and measure success within a niche.
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On a related note, I noticed that Amazon has recently changed the way they generate URLs. Instead of seemingly random numbers, the title and author name are included. One small step towards search engine domination. Put your cursor here and look at the status bar to see “www.amazon.ca/Long-Tail-Chris-Anderson/…”
The good folks at 