samedi 27 juin 2009

The Long Tail concept : “Strategy on products of the Back”The Long Tail Concept comes from Chris Anderson, the creator of Wired magazine.

The issue is to demonstrate that we are suffuring from a Hit products distribution in Mass Market.

That means in Physical shops, space cost and profitability implies a presentation of specific products: HIT products.

So the choice is tight, and become restricted. Another consequence is a cultural standardization.

In that conceptof Long Tail, the sum of sales of all the back products could exceed the sales of more popular products.Long tail : or how E-business models should fit to propose the best product at the best moment to optimize the backgrounds and not “hits products”.

On the web, distribution doesn't suffer anymore from the costs of Space shelves and physical profitability.

There is an opportunity to offer a wide range of products that are not necessarily HITS.

An example of Long Tail is the website: http://www.gloria.fr/

The creator, Mihai Crasneanu explains the interest: "Associate a rare product to an audience"

This concept is a DVD rental website which offers more then 13 000 DVDs, what is obviously more than any physic DVDs rental place.

For him the issue is: " A pro active management".Results for his business: 95 % of the 13 000 DVDs are rent at least once per month.

He ads that: 70 % of the sales come from the back products. And a margin per unit on that sort of products, 3 times more than on the other Hit products.

To him we are going pacefully to far from a market with "tete de gondole" products.

Does the Long Tail concept fit in the 'customer in charge' environment ?

To me, yes these 2 concepts are linked: the objective is to propose products which are unknown from customers but which match with their needs and satisfaction.

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