Chasing The Long Tail In A Recession

Chasing The Long Tail In A Recession

Chris Anderson, author of "The Long Tail," hypothesizes that even though classic marketing assumes that 80% of sales come from 20% of your customers, chasing "the long tail" of customers not in that 20% can be a viable online strategy. That's because online businesses are great at providing choice, something that physical brick-and-mortar stores can't stock or inventory the same way since they are not virtual enterprises. But, is chasing the long tail still a good strategy in a recession where consumer demand is dropping drastically?

Why The Long Tail Creates Demand

Yes, it is a good idea to think about chasing the long tail. The reasons for that are two-fold: Physical retailers are already reducing inventory and dropping choices and online retailers don't have to stock or inventory a selection or choice in order to offer it. So, the same reason that makes it unthinkable for physical retailers makes it a great choice for online merchants. After all, demand may be slowing for the best sellers, but the long tail is not about best sellers; it's about personal preference. When a consumer has a personal preference for a particular product or service, they will look to get that choice fulfilled regardless of the cost, even in a down economy. And, even if a retailer offers this choice in their physical stores, an online business is better suited to drop the price on it because they are not keeping their stock in physical inventory. They are doing "just-in-time" demand fulfillment.

Look Up Affiliates, Partners, and Order Fulfillment Services

In order to capitalize on this strategy, there is a bit more upfront market research. You want to locate affiliates, partners, and order fulfillment services that can help you market the long tail without necessarily having to create products yourself or ship them. That way, they can remain in other people's physical inventory until you get an order and are ready to fulfill that order. If you line up a great team of suppliers who you can use to create a vast choice, then you will create demand where there was none because you are offering something in one place that few others are able to do offline. If you make it easy to search online, then you create the ability for the customer to service his/her own needs and to exactly specify their preferences.

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