The driving force of the long tail strategy
Source: Shangpin China |
Type: website encyclopedia |
Date: August 23, 2012
Beijing website construction The company still sells products in China: the occurrence of the six long tail themes mentioned above all needs a crucial economic trigger: reducing the cost of obtaining "long tail" products. So, how can enterprises reduce costs? Chris Anderson further excavated three forces to realize the long tail strategy.
1. Popularize production tools
In the long tail coordinate system, the vertical axis is the sales quantity and the horizontal axis is the commodity type. At the left end of the coordinate system are a few commodity types with large sales volume, namely the so-called "head"; At the right end are most commodity types with small sales volume, which is the "tail" highlighted in this section. For the production enterprises, the biggest difference between the curve head and the tail lies in the different professional and amateur roles.
The differences between the two job roles include:
(1) The closer to the head, the closer to the field of professional producers, the more driven by economic interests; The closer to the tail, the closer to the amateur producer field, the more driven by reputation motivation.
(2) The closer to the head, the closer to the elite isolated production of professional producers; The closer to the tail, the closer to the grassroots network wisdom of amateur producers.
(3) The closer to the head, the closer to the copyright economy, the more inclined to commercial agents; The closer to the tail, the closer to the gift economy, the more inclined to self publishing.
From the perspective of production supply, the long tail mechanism has changed from a single specialized division of labor since the industrial revolution to integration with new amateur production. Compared with the high efficiency advantage of specialized division of labor, amateur production may provide a large number of diversified products according to the personal interests and creativity of many amateur producers, thus forming an endless tail area. But the new amateur production not only needs to provide a variety of products, but also must be able to control the production cost within the acceptable range of the market. The effective control of production costs depends not only on the non profit motive of amateur producers, but also on the popularization effect of production tools brought about by the great development of science and technology, especially information technology.
In the book "Long Tail Theory", Chris Anderson cited the Boussin's optical lens and CCD in astronomy respectively; Examples of digital cameras, desktop image editing software in the film and television field, as well as encouraging players to create shared computer games, on-demand book publishing, etc., confirm that it is because production tools have been popularized to most people that the rapid development of related fields can be promoted. In this regard, personal computers turn everyone into a producer or publisher, while the Internet turns everyone into a communicator.
2. Popularization of communication tools
After producers provide diversified products with a large variety and appropriate cost, consumers must contact them through some channels before they can buy them. For traditional sales channels, such as Wal Mart, Carrefour and other supermarkets, they inevitably face restrictions on shelf space and working capital, so they can only invest limited resources in the top commodities at the left end of the curve. Chris Anderson believes that only through a mechanism called "Long Tail Collector" can a low-cost sales system be realized for a wide range of tail goods with very low sales volume. The so-called "Long Tail Assembler" is an operation mechanism that can assemble countless kinds of products and make them easy to find and get.
In order to prove the existence and operability of the "Long Tail Collector", Chris Anderson elaborates on tangible products and intangible products respectively in the book:
(1) The sales channels of tangible products can create "long tail aggregators" in the following two ways: ① reduce supply chain costs through centralized warehousing; ② Make use of the search function and data storage and other information advantages of the sales website to provide unlimited product choices. Wal Mart, Carrefour and other traditional supermarkets all adopt the first way. Although they can provide hundreds of thousands of goods at a low cost in the store, the space for further expansion is extremely limited. Amazon and Dangdang belong to the second way, so the types of goods offered by these online stores are far beyond traditional bookstores and can reach millions.
(2) The sales of intangible products can use network byte transmission to reach the end of the long tail. In the pure digital mode, each product is just an entry in the database, and there is no storage cost. The transmission cost is just broadband bytes - this kind of thing can be purchased in large quantities, and the price is rapidly reducing, and it only needs to be used when the product has been purchased. In addition, pure digital retailers can choose between two modes: the first is to sell products as independent individuals (like iTunes, which downloads a song for 99 cents); The second is to provide overall services (like Rhapsody's unlimited music subscription). These commercial digital services not only have all the economic advantages of Amazon, but also have a transportation cost advantage. They can transport goods through broadband network, without cost. This is the highest level of retail industry - nearly zero marginal production and sales costs. Since there is almost no marginal cost for an entry in the database and several megabytes of storage space on the server, pure digital retailers can operate all possible long tail goods.
The book Long Tail Theory also outlines a gradual transition based on the above "Long Tail Collector" model: first pure atomic economics, then byte and atom mixing, and finally the ideal world of pure bytes. The digital catalog of tangible products can reduce the sales cost and make businesses move forward along the potential long tail. The rest of the tail is left to the more efficient pure digital mode. Both are long tails, but the latter may be longer than the former.
The author also points out that with the continuous progress of science and technology, enterprises have been able to develop more "long tail aggregator" models. For example, Amazon uses the latest industrial printing technology to save book information on the computer hard disk at ordinary times. Only after the user has purchased the book, can it use the industrial printer to print and bind, thus realizing the "print on demand" of books. Therefore, the ultimate way to reduce costs is to completely eliminate atoms and use bytes to deal with everything. Pure digital aggregator enterprises only need to store their products on hard disks, and then ship them through broadband. The cost of production, storage and sales is close to zero, and royalties are paid only when the product is sold. This is the highest level of the on-demand market: since products are digital, they can be cloned and transmitted countless times according to demand conditions - either zero or billions of times. A hot seller and a big unknown are just two different entries in the database. In the era of new technology and hard disk economics, there is no difference between the two.
3. Connect supply and demand
After solving the production and sales problems of long tail commodities in succession, consumers still need to face the final choice problem. In the past, narrow channels such as stars, advertisements, and mass media rankings guided people's propensity to consume. To some extent, it also guides people to move towards convergent consumption and focus their choices on the top commodities. Chris Anderson calls those technologies and services that can be scrutinized one by one among countless long tail commodities and then present the best choice to consumers as "filters", which finally connect long tail commodities with consumers. In the author's opinion, the countless blog sites on the Internet and search engines, including Google, are the best channels to help consumers search for large quantities of long tail goods, so as to connect the supply and demand of long tail goods.
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