If you ever wanted to read an interesting, in-depth explanation as to why many business ideas far exceeded expectations and became so successful (examples that come to mind include Amazon and eBay), I highly suggest you read The Long Tail by Chris Anderson, a book I just finished this weekend. The editor of Wired Magazine, Anderson explains why companies that have focused on the long tail of product demand curves, rather than only the most popular “hits” in categories such as movies, books, and music, have tapped huge levels of profitability despite far fewer units sold.
Advances in technology, the Internet in particular, have greatly enhanced our ability to distribute thousands more items than ever before. The result has been, and will continue to be, according to Anderson, a shift in customer tastes from hits to choice and selection. Niche markets, often ignored by large media companies, have become more profitable than bestsellers and companies striving to serve those markets well are thriving like few thought they ever would. The Long Tail is an excellent book for those who want to better understand how retailing is being revolutionized by technology, and which companies stand to benefit from these changes.