Long Tail wasn’t coined to deal specifically with search. Anderson was originally trying to explain the difference between the success of e-commerce stores compared to that of brick-and-mortar stores. His theory was that because of space constraints, brick-and-mortar stores have to justify every item that’s put on their shelves. This means the items have to ‘‘earn their keep,’’ so to speak, which in turn means that an item found in a store needs to generate consistently high revenue.
E-commerce stores aren’t beholden to the same rules. Theoretically, an e-commerce store doesn’t have to pay for the actual shelf space to stock a store, which should reduce the cost of carrying items. In many cases, nor do e-commerce stores have to physically stock an item in a warehouse somewhere. They can (and very often do) use a method called drop shipping, whereby products are shipped directly from manufacturer to consumer. The e-commerce site is nothing more than an order-taking system. That reduces the cost of providing a wide selection of items to consumers, which in turn means that e-commerce stores can afford to stock less popular, but still wanted, items.
A commonly quoted example of this concept is a brick-and-mortar bookstore such as Barnes and Noble versus a pure e-commerce store such as Amazon . com. By most estimates, Barnes and Noble stocks an average of 300,000 books, and not all of those books appear in all stores. What all those books do have in common is that they sell a certain number of copies each month. They are items that have proven to be in demand, and therefore they earn the half inch or so that they occupy on the shelf.
Amazon . com stocks millions of books — many of them books that don’t sell more than a copy or two each month. Nonetheless, Amazon is still a successful retail business because it costs much less to make those books available to customers. There’s no shelf to pay for and not everything you find on the Amazon.com web site is stored in Amazon warehouses, which means Amazon can offer customers books that are less popular or are popular with only a niche segment of the population.
What really makes this concept interesting from both a retailing and a searching aspect is that studies show that around 20 percent of the revenue generated by a retailer is generated by the most popular items — those items that are most searched for and most in demand. The remaining 80 percent of revenue is generated by the less popular niche items that users are searching for.