In the mid-90’s Gramicci was a client. This was the time when they were experiencing rapid growth and extending their clothing line beyond the iconic climbing shorts they had invented several years before. One thing every garment manufacturer understands is the concept of the long tail. Generally speaking the more inventory you produce the more you will sell – but at a cost. At some point the carrying costs of a "long tail" exceed marginal profitability. Knowing exactly where this inflection point is, and successfully managing it has a lot more to do with voodoo and witchcraft than it does with management skill and distribution agility. Anyways, Nicholas Carr appears to have identified an interesting unintended consequence of Budweiser’s "long tail":
AB’s expansion of its product line is an old-fashioned
control-the-shelf-space move. The company is using its distribution and
marketing might to crowd the little guys – the local and regional craft
brewers, in particular – out of the retailer’s cooler in order to
reassert its control over the market. In that sense it’s a reactionary
program, borrowing Long Tail methods (a multitude of brands) to kill
off the real Long Tail (a multitude of producers). It’s trying to cut
off the little guys’ economic air supply and run them out of business.
To the extent it’s successful, the consumer ends up with less choice
than before – lots of mediocre variations on Bud with different labels
and different niche-marketing programs.
Read the whole post here.
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