Sharing the love with the long-tail
Last week I discussed why a focus on becoming the hedgehog has been critical to Future Talent’s success, and now I’d like to share the second critical reason — we share the same amount of love with the long-tail as we do with the short-head.
So what is the long tail?
Popularised by Chris Anderson in 2004, Anderson recognised that for decades the products we’d consumed had been largely dictated by what businesses could stock on their limited shelf-space.
Products needed to be both high-in-demand and highly profitable to earn their keep, and competition for the rights to stock these products was extremely high — think music, movies, books, TV shows etc, also creating significant barrier to entry for other businesses.
What Anderson recognised was the impact the internet was having on blurring the lines between the physical and virtual worlds and it’s ability to unlock the constraint of limited shelf-space that had bound supply for so long.
“Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.
This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance. And the differences are profound.”
This dramatic shift enabled online businesses to offer extremely large and diverse ranges of products, with minimal cost implications, and in doing so they were able to service new niche markets where the competition was far less fierce, making the long-tail a highly-profitable marketplace when analysed as a whole.
It’s a concept we now take for granted, with businesses like Amazon, Itunes, and Netflix delivering us millions of titles at the click of a button, but what they’ve done so brilliantly is recognise that whilst the blockbusters may still be the titles that are the most consumed, they only represent a tiny percentage of the pie.
This shift to virtual marketplaces has enabled these companies to not only compete on price, without the typical overheads of a bricks-and-mortar store, but also crush their competition by offering a breadth of products that makes them irresistible.
So how might this concept of the long-tail apply to a custom sports cards company?
Whilst it may not represent the truest interpretation of the concept, I believe the principle is very similar when viewing the sports industry in Australia — and probably in most places around the world.
Within Australia there are roughly 3.2 million children who participate in organised sport or physical activity outside of school hours, evidence that we truly live in a highly physically active, sports mad nation.
There are the top-tier sports, around 5–10 who represent the largest participation, largest audiences and where most businesses are jostling for market share, and then there are the remaining 160 sporting communities (roughly 170 in Aus) who represent highly-engaged communities who are so often overlooked and for the purpose of this discussion will represent the long-tail.
The below table outlines the top sports by participation, and what you will notice immediate is just how quickly the long-tail begins to form and this is only an overview of the top 20 sports, so you can imagine how what it would look like if it outlined the entire 170.
So how might your business explore the longtail within your industry?
Now whilst the top sports represent the majority of Future Talent’s customers, it is also where all of the other competitors are fighting for attention.
Therefore from the moment we launched we’ve focused as much of our energy on ensuring we build relationships with those in the long-tail, and what we’ve discovered are highly-engaged tight-knit communities, who’ve so often been overlooked, and yet are full of outstanding young athletes who share the same sporting dreams, and made many of these come true when we’ve presented them with their very own sports cards.
How might this change your business model, or enable you to explore new markets which before you may have considered too small to be financially viable?
As you ponder that I will leave you with one statement that I loved from Anderson’s manifesto and leave you with one simple question that you can ask yourself today.
“Popularity no longer has a monopoly on profitability.”