Do manufacturers need to embrace things like mass customization to get in on this?
That's less of an emphasis than it once was, largely because it didn't really work all that well. It turned out to be limited in its scope. In the 1990s we were looking for the Dellification of everything—and even Dell doesn't do that anymore.

Instead, we now recognize there are lots of products already out there, but they just haven't been easily available. We don't need all sorts of new niche products, because they already exist. We just need to make them available and findable to the customers who want them. And with the recognition that customer needs are all different, a company can make products that buyers can customize themselves. Let the consumer do a certain amount of customization work that isn't really feasible from the producer perspective, but is increasingly easy for customers to do on their own.

In the book you discuss a tangerine-colored KitchenAid mixer and a "long tail of color" that helps that manufacturer woo customers.
KitchenAid offers not just a quality product, but also this extraordinary range of colors. If you're redoing your kitchen, and possibly changing your appliances as a result, you can have a color-coordinated mixer and make a kind of aesthetic statement with your appliances. They are offering a kind of concierge service where your interior decorator can work with KitchenAid and actually give them paint chips, and they do a custom-colored mixer just for your, for some huge amount.

So does the range of colors increase market size, or just market share for a particular company?
In some industries there is a wealth-redistribution effect, where the top sellers lose in sales, and others gain. In other cases, you can actually grow the market. In the case of music, there's more music being made than ever before, and more music being consumed than ever before. The iPod lets you take music into your day, and extend available listening hours. In economics there's something called Say's Law, which deals with the idea of supply creating its own demand. If you produce something, you stimulate demand for that thing that was not previously measurable. Part of this long-tail work is the recognition that demand for variety and choice, which was depressed by distribution inefficiencies, is now measurable and real and large. The biggest thing we're seeing right now is the ability to tap latent demand in the marketplace for variety. We didn't see it before because we didn't know how much choice was out there.

Next page: How does the long-tail concept affect the supply chain?

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