Page 210 - (DK) The Business Book

208

THE FUTURE OF

BUSINESS IS

SELLING LESS

OF MORE

THE LONG TAIL

IN CONTEXT
Today, companies are no They can now offer a
FOCUS longer constrained by large number of niche
Internet business physical space or costs of products to many
reaching their market. individual customers.
KEY DATES
1838 French mathematician
Antoine Augustin Cournot
produces a graph to represent
supply and demand.
1890 British economist Alfred Consumers have
...by buying
Marshall introduces the concept increasing choice and
niche items from
of demand curves in his book want to express their
online sellers.
Principles of Economics. individuality...
20th century Most companies
sell a limited number of goods,
with the bulk of sales and
profits coming from their The future of business
top-selling items. is selling less of more.
1990s The introduction of
the Internet proves to be a
disruptive technology that
changes economic and he “Long Tail” theory A primary factor in today’s global
social traditions. challenges basic principles economy is the Internet, which is
T of economics. In the past, shifting the focus from mainstream
2004 Chris Anderson coins the
successful businesses often sold products and markets—represented
term “Long Tail” to describe
high volumes of a limited number by the “head” of the demand
the concept that a larger of products. Now, according to curve—toward a large number of
proportion of sales is likely to author Chris Anderson, the future niche or low-volume products and
come from the tail, rather than of business is in selling less of more markets, as seen in the “tail” of
the head, of the demand curve. —low volumes of an increasingly the curve. A conventional demand
large number of products. curve is drawn with price on the