Leveraging The Long Tail

Leveraging the Long Tail is a modern marketing strategies brought about by the dot-com era. Without going into great detail the actual leveraging of the long tail is  basically being able to sell the hard to find not so popular items with relatively small outlay. That is to say that the online retailer doesn’t have to maintain one or multiple brick and mortar store fronts, consolidating its inventory in the one location thus enabling them to carry a larger variety of items that aren’t the Twilight saga. The best and by far the most successful example of down right exploiting the long tail is of course Amazon The brain child of American Jeff Bezos, Amazon.com was conceived all the way back in 1994, before going live a year later. Bezos was eager the jump on the dot-com boom and Amazon was going to be his meal ticket by being able to offer the consumer a safe, simple and rewarding browsing and ultimately shopping experience.

Amazon.com does not physically hold a single book in stock, ever. I didn’t know this at first but once it had been pointed out and explained to me its brilliant! Amazon is merely a search engine that has cataloged all of the publishers around the worlds inventory and facilitates the transaction between them and the customer. This means that the book is shipping directly from the publisher, or seller, to the buyers door, without ever going through amazon. This means very little overheads for Amazon in terms of storage and distribution however it has invested astronomical amounts of money into the development of its web services infrastructure, and has now evolved into an API.

Diversification has been another major aspect of Amazons sustainability. Originally started as an online bookstore their range of products gradually grew to include CD’s, VHS (what’s VHS again? :P) and DVD’s but now extends to electronics, furniture and so much more. They have adapted their proven method of  connecting sellers of products with buyers globally to include just about anything you can fit in a box and FedEx.

Alexa.com ranks Amazon.com as the 21st most popular website in the world and at number 7 in the USA. With a staggering nearly 7millions hits per day its any wonder that it has become a ‘household’ name amongst the internet shopping savvy. Their ability to list more titles then any physical store and be able to offer competitive pricing is what has enabled them to bypass their physical competitors such as Borders books and Barnes and Noble in revenue. This coupled with the convienice of being able to just click a link any time of the day and the titles on its way has meant that fewer people are going into book shops.  This graph shows the comparrison for this year: longtail.gif

These material book stores rely on the first part of the long tail principal that the most popular titles will sell in volume with the not so popular ones going by the wayside. This literally means having 10000000000 copies of the new Twilight DVD and  not bothering to carry stock of A Clockwork Orange DVD as every space on their shelves is costing them money. But to put this all in perspective for Walmart to put a CD on its shelves they need to sell at least 100,000 copies of that CD to cover the cost of buying the stock and paying someone to put it on the shelf, and then process the sale. This means that Beyonce will be in every Walmart store while little known Aussie band Dead Letter Circus will never be available in store. This means online music stores like iTunes or Amazon.com is their only hope to get the records out there.

It doesn’t cost Amazon.com anything to have the Dead Letter Circus record on their virtual shelves and as such they will always be able to list it even if they only sell one copy. Thats one sale HMV missed out on by being limited to the finite amount of space on their shelves. This long tail of niche content is only available thanks to the internet and the online stores that have realised the market out there for it.

https://tobycox.wordpress.com/wp-admin/post.php?post=27&action=edit

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3 Responses to Leveraging The Long Tail

  1. Matt says:

    Hey mate,
    Nice post. I didnt know that ALL of the products are shipping directly from publishers or sellers without amazon before. Interesting.
    Like u pointed out amazon is one of the most successful online-stores.
    Like I do it in my post as well do you have any ideas how amazon could improve their service. I guess it is absolutely perfect and I have no know idea how to improve it.
    CU

    matthiasgehrke.wordpress.com

    • tobycox says:

      Thanks man,

      I dont know if amazon can necessarily improve their service but i think that by diversifying it its going to stay current.

  2. I cant think any idea to improve amazon too. The thing that will happen is that more user will make more comments and so the site gets better.

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