It’s been 13 years since then-Wired Editor in Chief Chris Anderson wrote his book "The Long Tail." His analysis of the “Amazon Economy” completely flipped our notions of supply and demand. In theory, The Long Tail should have ushered in a democratization of the marketplace, spreading the wealth among a greater number of participants. And, in a perfect implementation of the Long Tail, that would be true. But bits and pieces of Long-Tail economics have ported over to a number of markets -- and sometimes, an imperfect fit creates some undesirable consequences.
In order to create an effective Long-Tail market, three conditions have to be met.
Unlimited inventory: Products that can be delivered digitally with no manufacturing costs free markets from the physical restraints of production and warehousing. Inventories are unlimited and fulfillment can be on demand.
Unlimited shelf space: Similarly, products in the digital domain allow for infinite shelf space -- simply because no actual “space” is required. Spotify, Netflix and Amazon can make millions of digital copies available.
Perfect information: The last requirement is sometimes the most problematic. In order for the Long Tail marketplace to be the most effective, consumers need perfect information about their options. They need to know everything about anything that’s available and be able to make their choice accordingly.
This is impractical in the real world. Even the most effective search platform falls well short of providing perfect information.
Theoretically, if all three prerequisites are met, demand flows down from the head to the tail, shortening the first and extending the second. But Long-Tail economics don’t necessarily apply equally to every marketplace. Take travel, for instance.
Too Much of a Good Thing
In a recent MediaPost column looking at marketing travel, Harvey Chipkin outlined the problems being felt worldwide by “overtourism.” Barcelona is a cautionary tale of what happens when consumers are deluded by the illusion of a Long-Tail market and suppliers are dealing with the realities of an infrastructure held back by physical constraints.
First, let’s deal with the delusion. We travel a lot differently than our parents did. Back in the '80s, travel to Europe was the sole domain of the rich and famous. If one of us mere mortals did hit the continent, chances were we were doing the European Bus Tour Trifecta: London, Paris and Rome. For most of us, Disneyland was about as exotic and adventurous as our travel plans got.
But then we started craving authentic experiences. We wanted the thrill of unearthing the hidden gem. That was about the time we discovered Barcelona.
No one went to Barcelona in 1990. But then the city hosted the Olympics in 1992. This exposure on the world stage boosted tourism, effectively doubling it by 2000. Barcelona was cool, it was hip -- and, most importantly, our next-door neighbors had never been there.
But it was the Long Tail of travel that really broke the back of Barcelona when it came to tourism. From 2000 to 2010, with the advent of the web and the explosion of available travel information, tourism to Barcelona again doubled and almost tripled.
Today, about 20 million annual visitors flock to a city with a population less than one tenth that number. The city is groaning under the weight of all those sun-burned bodies desperately searching for authenticity, to the point that Barcelona’s mayor, Ada Colau, is threatening to slam the door on those gringo turistas in order to make the city livable again.
The delusion of the Long Tail leads us to believe there's a smorgasbord of authentic travel options just waiting for us. But the reality falls far short of that. If we look at the prerequisites of a Long-Tail market, we begin to see why. We can argue that there is unlimited shelf space. There is no corner of the world we can’t travel to if we have the budget and inclination. Destinations we never heard of just a few decades ago are now the new hot spots.
Perfect information is a little more of a challenge. When the options are limitless, we run into the limits of our own cognition. Working memory being what it is, we can’t endlessly juggle potential destinations. We rely on a search and suggestion engine like TripAdvisor. And there we run into the realities of the Matthew Effect: The rich tend to get richer and the poor get poorer. This can be otherwise stated as the Rule of Google: “No one goes past the first page.” Shelf space may be unlimited, but screen real estate is anything but.
Finally, as Barcelona is painfully discovering, there are definite limits to the inventory of authentic, one-of-a-kind travel experiences. Once, visiting La Sagrada Familia Basilica was an awe-inspiring, soul-stirring spiritual journey. Today, it’s a highly manufactured tourism machine that usually sells out for the day by 9 a.m.
This means that rather than the trickle-down effect we would hope to see in a Long-Tail market, demand tends to bunch up due to network effects. A new “authentic” experience climbs to the top of the listing and is suddenly inundated with new demands.
As Chipkin said in his column: “After a few people get the privilege of cooking with a Contessa in her ancestral home or taking in a remote tribal village ... these “authentic” locals (and their neighbors) begin to catch on and think like entrepreneurs. In come the value engineers and the souvenir shops … and out goes the authenticity.”
The Barcelona effect is beginning to be seen everywhere, including my own little corner of Canada. Forward-thinking tourism marketers are trying to get ahead of the deluge by finding ways to push traffic to the less-popular margins, artificially creating a Long-Tail effect. Labels like “slow tourism” and “immersive travel” are emerging to try to encourage a different mindset among visitors. But, in the end, most tourism operators are still trapped within the tyranny of TripAdvisor mindset, hoping to climb to the top of the rankings. They feel the potential trade-off is worth it.
To them, being “too popular” sounds like a tomorrow kind of problem.