What is the "long tail effect"?

The long tail effect is actually a popular expression of power law distribution, which is also called scale-free phenomenon in physics. This phenomenon is quite common in nature and social life. Please refer to Power Law Distribution _ Interactive Encyclopedia. It is also mentioned that it is called scale-free because "the scale of individuals in the system is very different and there is a lack of an optimal scale."

As shown in the figure below, a very small number of individuals (horizontal axis) correspond to extremely high values (vertical axis), and extremely low-value individuals account for the vast majority of the total. The part that vividly describes the curve near the vertical axis is called the high head, and the part near the horizontal axis is called the long tail:

According to Wikipedia:

So the word "long tail effect" emphasizes the commercial value of those individuals who account for the vast majority. Although their individual value is extremely low, the sum of this long tail should not be underestimated. The reason why the long tail is often put together with Internet and e-commerce companies is mainly because the development of Internet and IT technology has reduced the average information cost of products and services to a very low value. The distribution of electricity price is particularly obvious in the case of massive product information and user information, which was well utilized by these companies earlier.

Take the comparison between online stores and offline stores as an example:

Online shop is equivalent to getting almost unlimited shelves at a small cost, which can include many hot and unpopular items at the same time. The sum of the benefits brought by these many unpopular people is considerable, and you can even compete with several big favorites. To use an inappropriate metaphor, "many ants kill elephants." In comparison, offline stores can't do the same thing, because there is considerable space and other costs, and marginal benefits are not allowed.

From the user's point of view, even the needs of the minority may be met through the Internet platform, which is equivalent to effortlessly visiting an infinite supermarket that satisfies yourself as much as possible. It can be said that as long as it exists in the world, it is possible to "see" it at your fingertips (of course, this is an extremely ideal description, and the actual situation largely depends on the development of technology, such as search engines and personalized recommendations, which will not be discussed here for the time being). The reason why I don't say "easy to get" is because physical e-commerce has an unavoidable bottleneck; It is also difficult for service products such as O2O to avoid the problem that actual consumption must occur offline. Even if it takes less time for consumers to collide with commodities, we have to consider this long and difficult road. This is also one of the important reasons why offline stores will not be easily defeated by e-commerce. Virtual (or fully digitized) goods such as mobile phone bills and game cards, including online financial products that are very popular now, have little impact in this respect.

This phenomenon in the field of e-commerce can also be seen in other Internet applications, especially platform-based applications, such as multimedia content sharing platforms and online communities. At this time, the value owned by users has changed from the demand for goods or services (which may also correspond to the price they are willing to pay to realize this demand) to the demand for interesting and valuable information (which may also correspond to the price they are willing to pay, which may of course be more like the price of time and energy). And this information mainly comes from users, the so-called UGC. The long tail of production and the long tail of demand work at the same time, which is an important feature of Web 2.0 that I understand.

At present, many other fields have borrowed the word "long tail" to describe the phenomenon of power distribution in their respective fields. In addition, it is worth mentioning that both power rate distribution and normal distribution give people the impression of distinguishing the majority from the minority, but the normal distribution is mostly concentrated in the middle and the minority is separated at both ends, which is an upside-down golden bell shape. The two describe very different phenomena.

Some people think that the applicability of the "long tail theory" based on the long tail phenomenon can be expanded more widely, and even the so-called "80/20 rule" can be overturned. I think this is very doubtful. You can refer to Zhihu @ Pan Xin's answer to this question: Is the long tail theory a scam?

There is another digression. I personally object to taking out the words "this effect" and "that law" whenever something happens, especially many so-called "classical theories of management", most of which are not supported by strict quantitative analysis. Needless to say, these so-called theories contain a lot of analogical descriptions, which are very easy to spread the truth and lead to misunderstanding. Drag the word "management" to the same height as dog skin plasters such as success self-help books and fortune telling. Please don't forget that the more formal name of management science should be management science. Science attaches importance to accurate description, strict deduction, and results that can be verified repeatedly, and even allows self-overthrow in some cases. Things like the "long tail effect" describe the reality conveniently, but it is blind and superstitious to regard them as the guiding ideology above all else and the eternal and universal perfect criterion. At present, I think the most suitable name for it is not an effect or a theory, but just a phenomenon.