The Long Tail is a business and economic concept describing how a large number of niche products or services, each selling in small volumes, can collectively generate significant total demand - sometimes rivalling or exceeding that of a few bestsellers
_credit: Brimco. Ltd
- Contrasts traditional ideologies about focussing on high-volume sales of a limited number of products
- High-volume approaches are typically driven by constraints upon physical shelf storage space in physical premises
- Challenges high-volume sales approaches with a goal of aggregate success across a large number of niche, specialised product offerrings
- E-Commerce and diversified product distribution methodologies do away with typical constraints of physical locations
- Term is specifically derived from a ‘long-tail’ shape within a demand curve graph
Formula
N.B: No conventional formula to derive ‘Long-Tail’ method
- Demand curve analysis
- Cumulative Sales across SKUs
- Pareto Distribution Comparisons