In his book, “The Long Tail,” Chris Anderson argues that our culture and economy is shifting away from a focus on a small number of mainstream “hits,” and moving towards a large number of niche products that lengthen the tail of the demand curve. One needs to only examine Amazon.com to see how the digital era has ushered in this new economic model. Anderson’s big idea is based on two observations:
Demand for products not available in brick and mortar stores can be potentially as big as for those that are. In other words, online stores allow for cheaper storage, production, and distribution costs. iTunes can easily stock hundreds of thousands of albums with virtually no overhead costs. A traditional music store simply wouldn’t have the space to stock that many titles, so they stock what sells. They need to maximize the return on their valuable shelf space. iTunes however, is able to sell the albums of obscure, niche artists. Small sales on a large number of products is now beginning to equal large sales on limited mainstream hits. Thus, the tail on the demand curve gets longer.
Bottom-up buzz is gaining power. The new tastemakers are us as word of mouth has now become public conversation. People are beginning to purchase goods and services based upon the recommendations of others- the “tastemakers.” Anderson lists tastemakers as industry professionals and experts, bloggers, celebrities, and “microcelebrities” those who are knowledgeable in the smallest of microcultures.
While I agree with the “long tail” economic model, and the theories Anderson points out that correspond to it, I wonder what implications the struggling economy will have on niche products. While not true in all cases, generally specialized niche products are more expensive, and niche hobbies/services cost more money to pursue.
Let’s look at the effect of the long tail on the foods we eat. Recent green initiatives have caused the market for organic, all-natural foods to explode in the past several years. There are entire grocery chains, such as Whole Foods, dedicated to providing consumers with specialized organic foods that cannot be found in your regular grocery store. There are websites that detail how to grow your own organic garden and offer products to help you do so. Organic groceries and those who buy or grow them certainly represent a niche market. However, these products are typically more expensive than those offered at mass-market grocery chains.
There is no doubt that we are evolving into a generation of more educated consumers who take pride in owning specialized and unique products. But as our pockets get smaller while costs of living rise, will mainstream “hits,” as Anderson describes them, regain their popularity? Will it be cheaper and easier for consumers to buy products that are mass produced, rather than invest their time and money into niche products and cultures? Perhaps the infinite “wants” of the niche products that comprise the long tail will turn into limited “needs” that will shorten it.
DC Maven 