Web 2.0 – Leveraging the long tail

Another complicated phrase right? What the heck is Leveraging the long tail?? Let’s start from the beginning… “The Long Tail” was a phrase first coined in 2004 by Chris Anderson, and later popularized as one of O’Reilly’s Web 2.0 patterns.

“O’Reilly describes it as, “the collective power of the small sites that make up the bulk of the webs content.”

As mentioned this term wasn’t originally aimed at the web, but in recent times has been used to describe the strategies used by internet companies to leverage the online market.

Anderson defined “The Long Tail” as a statistical curve showing the advantage that website based companies with a mass amount of items have other the traditional brick and mortal retail stores with limited shelf space for the mass markets.

The idea is that your traditional retail stores have evaluated that the cost of stocking low volume items on their shelves is just not the worth the shelf, storage and labor cost required in distributing them. However a website doesn’t have this problem, there is no shelf space required, simply a virtual shopping center that can order products on demand. Imagine if say Target or Kmart could remove the costs of real estate, staff and inventory stocks and give these savings back to the consumer.

Another key factor and advantage online retailers have over the standard store front retailers is that when you purchase a product, you are generally offered recommendations with links based on your purchase that encourage looking at several others.  Most notably the companies that sell book, video and music sales, where there is a vast supply of product, have benefited significantly from this approach. Amazon, iTunes, and eBay are great examples of this.

In 2006 Anderson pointed out that the long tail accounts for between 25 percent to 40 percent of Amazon.com’s sales”

As one of the largest industries on the planet, the tourism and travel industry boast many websites that utilizes this Web 2.0 pattern well. With over five million visitors a month, Lonenlyplanet.com has been successful by offering a unique way for travelers to plan their trips. Providing detailed information on numerous countries and cities around the world, as well as forums and newsletters offering travel advice and opinions from other travelers.

Additionally they offer an innovate accommodation system with a vast range of options from hotels to hostels and finally they also provide flight bookings, travel insurance and ultimately anything related to catering to your travel needs. Now you ask what has this got to do with a Web 2.0 pattern?? Lonely Planet follows some of the best practices of ‘leveraging the long tail’ by offering travel services different than the countless other travel websites by providing users with a system that is not just based on entering dates and looking for prices to your destination, but by allowing users to choose the country they would like to travel to, and then search for an activity that interest them.

Lonleyplanet.com provides a service that most store front travel stores simply just can’t offer such as;

More selection –Lonely Planet offers books on top destinations

Lower price – less overhead (no storefronts for either store)

Scalability –  Lonelyplanet.com can sell more ‘items’ by simply increasing the online ‘store’ – no extra shelving required, and they do not require any physical delivery or inventory to be held, they are simply selling a service or acting as an agent between two parties.

Wisdom of Crowds – By using this philosophy and encouraging user contributions in the form of feedbacks, reviews, rankings and user ratings.

Algorithmic Data Management – Lonelyplanet is great example of a site that helps customers find similar products based on their ‘clicks by endorsing their products in a ‘you might like…’ window based on the area of the world you are showing interest in.

In a nutshell, online retailers have a great advantage when “leveraging the long tail” of Web 2.0, due to the lack of inventory and additional costs required hosting a traditional store, and therefore can offer additional services and products to their consumers.

 

References:

Anderson. Chris (2009) The Long Tail of Travel. Retrieved 4th May from,

http://www.longtail.com/the_long_tail/2009/10/the-long-tail-of-travel.html

 Lonelyplanet.com (2012) Retrieved 4th May from,

            http://www.lonelyplanet.com/

O’Reilly. Tim (2005) What Is Web 2.0? Retrieved 4th May from,

http://www.oreilly.de/artikel/web20.html

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14 Comments

Filed under Web 2.0

14 responses to “Web 2.0 – Leveraging the long tail

  1. Hi Brett, Lonely planet is a good example of leveraging the long tail. I recently went travelling and found similar sites called hostel.com and hostelworld.com to find accommodation useful. It is really helpful when you have access to all the websites that can help you in one place, as trying to find them yourself could take forever! I am quite interested in the articles and information that lonely planet provide for interests and activities in particular places as I have not looked into this before. Good post! keep it up:)

    • I definitely think these types of sites are great especially for inexperienced travellers! Myself personally I have travelled all over the world and pretty much backpacked the entire time staying in hostels 95% of the time. Having website like hostelworld.com not only helps you find cheap accommodation but decent quality accommodation that’s cheap!!

  2. the low price and more freedom has made the self service travelling be accepted by millions people especially young people. these traveler absolutely contain in the Long Tail. Lonleyplanet.com successfully caught the chance that most young people want to join in the self-service travelling and want to get more information. i think, as you said, the success of Lonleyplanet.com is not only they leverage the Long Tail, they also user good strategies, such as Wisdom of Crowds and Algorithmic Data Management, to attract their user and make the long tail fatter and longer

  3. brilliant example! I never thought into that direction but for travelling it can really give you unique travelling experiences instead of the standardized mass tourism!

  4. Hey there im back again this week. Lovely post as usual, from what i see you understand this weeks topic really well. You made a good point by getting everyone to imagine Target without the real estate cost, staff etc. Thats exactly what an online community deals with when purchasing products and it shows in the savings they make. Lonely Planet is a fine example of something leveraging the long tail as well. There are so many places we can go to in the world but there are also a lot of people who want to go to these places. This model is keeping the tail rather fat at the same time as keeping it long, what more could you ask for right. Given that i have never used this site before i will have to take your word for how well it takes care of its customers with all its tools and features but from what i see in your post its great!. Thanks for writing another interesting blog post mate

    • Lonely Planet is a great site for travellers of all experience levels! It utilises the opinions and data intelligence collected from its users to improve the way customers interact with the site. If you are planning a trip definitely check it out!

  5. More selection definitely provides more opportunities for increased consumer choices. With the lower price, Lonely Planet decreases the cost of consumption by virtue of democratized distribution which makes the tail fatter. Based on algorithmic data management, customers will find the products of similar interest. Lonely Planet is absolutely an excellent example that leverages the long tail.

    • Well put wenjiacecilia! And thats exactly what it does! Lonely Planet makes use of its data by generating options based on your selections in the past, which is a superb way of generating sales for products that aren’t as common. For example I have travelled to some pretty unknown spots and you wont find these in a local bookshop!! But lonleyplanet shows me odd places that I may like to explore and opinions on those places from others.

  6. Great introduction for the pattern, well explained and it will give ideas about the pattern even if you have no idea about web 2.0 applications.

    LonelyPlanet is a great example of this pattern, more services and more options for the customers, means more money and more customers. i like how they use data mining and how they use the collective intelligence. Well-explained and great post!!

    • Precisely! More money and more customers! The products in the long tail that are less popular can generate revenue for lonely planet that a traditional store with only the most well known products simply cannot achieve.

  7. Hi there, I have seem this Lonely Planet website but havent use it yet. It seems be very reliable and offer a complete travel advice and products/services. The collective information available and the range of products/services make the website unique. In that way, the website will not rely only on advertisements or fly ticket bookings 🙂

    Have a look about my blog if you can 🙂

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