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Long Tail

Updated on March 1, 2023

Long tail is a term which was introduced in 2004 by Chris Anderson, British-American writer and then editor at the Wired Magazine. Long tail is a business strategy which allows companies to realize high profits by selling low volumes of unique products to many customers, instead of only selling large volumes of a small number of popular items. The strategy states that products with low demand or with low sales volume can collectively reach a market share that exceeds or competes with relatively few best selling items, if the store or distribution channel is large enough. The goods or products considered under Long tail are less popular and have a low demand.
Long-tail strategy also finds application in the insurance industry, where it means a type of liability or also to the ‘tail risk’ in investment portfolios. Anderson also wrote a book on the same topic in 2006, titled ‘The Long Tail: Why the Future of Business Is Selling Less of More.’