From Niches to Riches: Anatomy of the Long Tail

Sloan Management Review, Vol. 47, No. 4, pp. 67-71, Summer 2006

12 Pages Posted: 21 Jul 2006 Last revised: 3 Mar 2015

Erik Brynjolfsson

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Yu Jeffrey Hu

Georgia Institute of Technology - Scheller College of Business

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Abstract

Dozens of markets of all types are in the early stages of a revolution as the Internet and related technologies vastly expand the variety of products that can be produced, promoted and purchased. Although this revolution is based on a simple set of economic and technological drivers, the authors argue that its implications are far-reaching for managers, consumers and the economy as a whole. This article looks at what has been dubbed the "Long Tail" phenomenon, examining how customers derive value from an important characteristic of Internet markets: the ability of online merchants to help consumers locate, evaluate and purchase a far wider range of products than they can typically buy via the traditional brick-and-mortar channels.

The article examines the Long Tail from both the supply side and the demand side and identifies several key drivers. On the supply side, the authors point out how e-tailers' expanded, centralized warehousing allows for more offerings, thus making it possible for them to cater to more varied tastes. On the demand side, tools such as search engines, recommender software and sampling tools are allowing customers to find products outside of their geographic area. The authors also look toward the future to discuss second order amplified effects of Long Tail, including the growth of markets serving smaller niches.

Keywords: Product Variety, The Long Tail, Search Costs, Recommender Systems, Strategy

Suggested Citation

Brynjolfsson, Erik and Hu, Yu Jeffrey and Smith, Michael D., From Niches to Riches: Anatomy of the Long Tail. Sloan Management Review, Vol. 47, No. 4, pp. 67-71, Summer 2006. Available at SSRN: https://ssrn.com/abstract=918142

Erik Brynjolfsson (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E53-313
Cambridge, MA 02142
United States
617-253-4319 (Phone)

HOME PAGE: http://digital.mit.edu/erik

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yu Jeffrey Hu

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://www.heinz.cmu.edu/~mds

Paper statistics

Downloads
2,884
Rank
2,923
Abstract Views
16,581