The Long Tail In Niche Markets ~ Obscure & Unique Products
According to Internet statistics, there are 644 million websites worldwide, which seems staggering in terms of competition. Further research indicates that 75% of the registered websites are parked domains. The remaining websites serve us with a range of information, products, government and banking services, and entertainment.
As far as e-commerce sites, reports vary widely with some suggesting there are twelve to twenty-four million online stores, while others give much more realistic numbers. RJ Metrics set up an algorithm with claims of 95% accuracy to determine the actual numbers. They concluded there are approximately 110,000 e-commerce sites worldwide.
To further narrow it down RJ Metrics was able to tell us how many of the e-commerce sites are heads or tails, without flipping a coin. As expected, more than 90% are in the head. Many bloggers and business people also try to evaluate the middle and overall length of the tail.
In reality, there are only about 10,000 long tail web shops to date. The long tail represents niche markets and obscure one of a kind items that are hard to find otherwise. The difficulty with long tail products is that it is harder to reach the intended audience. The web development time is longer, which is a deterrent to many start-ups. Instead of putting up four or five pictures of mass produced T-shirts for example, and then adding the variables in colours and sizes – one must photograph and describe a large volume of products one by one.
Although the concept of niche marketing is not new, the long tail theory is only about ten years old. In supply and demand chains, when distribution and storage costs go down, it opens the door for niche markets. A good example of this is how the Indie author book sales captured a 36% share of the Amazon book market. Independent authors and publishers can now create and deliver digital products to a minority audience. This was never possible when authors relied on large publishers and distribution networks to succeed.
The gist of the successful long tail e-commerce site is to have a large volume of one-of-a kind items. This seems logical. When doing Internet research on vintage clothing web shops, it becomes evident that the smaller stores with minimal product get lost in the shuffle and don’t attract much attention.
As I learn about how the products we choose as we embark upon the e-commerce learning curve, it reinforces what I have believed for a long time. If distribution and storage costs are reduced to make it possible to get our own little cubbyhole of products launched – it opens doors for more creativity, independence and autonomy in business. It also reaches customers who have less interest in the head – but may have in-depth interest in products with less hype and advertising.
The long tail serves a wider spectrum in the culture and arts segment. Initially the choices to sell niche, second hand, collectibles, and antiques was limited to eBay and Etsy shops. A lot of water has gone under the Internet bridge since eBay was launched in 1995. Etsy followed with a large multi-vendor platform in 2005. The high end multi-vendor site 1stdibs was founded in 2001 and FarFetch followed suit in 2007. Canada’s RealReal site and FarFetch both raised well over a hundred million dollars to launch and promote long tail e-commerce. Much of the second hand market is based on consignment, which is different than a private collection.
In my opinion consignment has multiple issues. If a person decides to sell their items on consignment, they will typically have numerous things they want to sell. If the retailer wants two or three of those items, they are pressured to take all of them. Whereas with a private collection amassed over time, the selection criteria remains fairly consistent.
Consignment also has multiple accounting considerations. If large retailers become insolvent, they must return items to the original owner, or the reputation for selling on consignment will suffer. However, unless a person has been collecting and storing product for decades, consignment is the only way to get the luxury brand vintage products for resale. E-commerce has helped the vintage and second hand clothing market by leaps and bounds. Otherwise most of the beautiful and artistic vintage clothing would never be photo-documented and shown off like it is now.
Since there are not too many people who will accumulate, save and store product for many years, the Quiet West website is a good long tail learning experience. It is somewhat encouraging to know there are not six hundred million competitors out there! Of the 10,000 long tail E-commerce sites, they include independent books, foreign films, photography, art, music, and the vintage clothing and second hand market.
The conclusion may not be a get rich quick scheme for the long tail retailer. But we can make great gains when it comes to increasing cultural and intellectual diversity and choices. What happens if the long tail becomes thick or bloated over time – and the head starts to shrink?
Paradoxically, I think the long tail ideas and products make for a higher and more sophisticated consumer intellect, more choices, serve minority interests, reduce pollution, and create a greater cultural awareness.
There will always be both inspiration and aspiration for the starving artists and determined but small entrepreneurs who are willing to put in the extra development time to get their products in front of people. As far as growth is concerned – the tail could get thicker or it could get longer. After all – we can’t let everything go to our heads!
Copyright Valerie J. Hayes and Quiet West Vintage (2018). Unauthorised use and/or duplication of this material without express and written permission from this blog’s author/owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Valerie J. Hayes and Quiet West Vintage with appropriate and specific direction to the original content.