The fashion industry and The Long Tail Effect

The Internet imposes no barriers to entry, no economies of scale, no limits on supply – Clay Shirky. Legacy media dominated by industry control has been replaced by consumer control, decentralized content featuring horizontal dynamics. We are a hungry society, hungry for more media, more screens, greater distribution, more channels and more shelf space.  The Internet has shifted the balance of the 80-20 rule also known as the Pareto principle, a common pattern of sales concentration (Brynjolfsson, Hu & Simester 2007).

The Pareto Principle has been replaced by The Long Tail Effect, the most fundamental law of information network and social laws, describing the phenomenon that niche products make up a large share of total sales (Brynjolfsson, Hu & Simester 2007). It is a hit driven model that mimics our hit driven culture.

The Internet has caused a dramatic shift in the way we search and purchase items. No longer are we finding products on shop shelves but by scrolling though virtual catalogues of dresses, shoes, homewares etc. This is the secret to online shopping’s success. It makes major department stores like David Jones and Myer look miniature due to their limited shelf space and stock. Orders, warehouses and shipping run 24/7, which makes online shopping quicker than a trip to the local shopping centre.  The Iconic, an Australian online fashion retailer that promises delivery within 3 hours of Sydney CBD.

Likewise the US fashion industry is at the forefront of the trending Long Tail effect.  Zappos.com is the US alternative to The Iconic. The biggest online seller of shoes, thought that the Pareto law was going to be the pattern for the company’s sell. But the demand for clothing is all about individuality and many customers shop at Zappos looking for offbeat styles (Economie Numerique – Le Blogue 2013). The future of the fashion industry is online due to lower storage costs and centralized wearhouses. Traditional stores cannot compete with the wide variety of products that an Internet e-Commerce site can store at the same cost (Economie Numerique – Le Blogue 2013).

Furthermore this is relatable to the retail industry giants Amazon. The reasoning for their success is that centralised inventory and drop-shipping agreement allow the online book retailer to offer millions of book titles (Brynjolfsson, Hu & Simester 2007). This has diminished typical brick-and-mortar stores which can only stock limited titles still based on the Pareto principle.

 

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About Nicola Salter

Nicola. 21. UOW Graduate
This entry was posted in DIGC202 and tagged , , , , , , . Bookmark the permalink.

2 Responses to The fashion industry and The Long Tail Effect

  1. chjvu says:

    Good work on explaining the relationship between the long tail effect and the directions in which the fashion industry and business are progressing. Expensive and costly-to-run shops have become more and more redundant, having the battle the more effective model of online shopping. Using online fashion shopping is also a great example of the superiority of an aggregate of niches over the hit-driven system of business.

  2. Interesting points on the way our shopping and consuming desires have changed, in terms of everything being online now, and that if you can’t find something in a shop you can always find it online, or even something better. I hadn’t thought about the fashion industry in relation to the long tail before so this was eye-opening, as for me, my biggest experiences with the long tail were online music and the music culture.

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