September 2014 | 

Location Is (Still) Everything

Location is Still Everything

In his new book, Location Is (Still) Everything: The Surprising Influence of the Real World on How We Search, Shop, and Sell in the Virtual One, David Bell shares a startling revelation for anyone who runs an Internet business or who is thinking about starting one. “The virtual world is flat in terms of the opportunity that it delivers to all of us,“ says the Wharton marketing professor, “but it is not flat in the ways that we use it.“ That is, it’s true that your customers could, theoretically, come from anywhere — but it’s also true that most often they don’t.

In fact, the importance of “location, location, location“ is as relevant to online commerce as it is to bricks and mortar. This time however, it’s about the location of customers relative to their real world options and to other customers that they might interact with. Bell’s findings can inform better decisions about how and whom to market to, always with an eye on where your potential customers are located in the real world. He writes, “You can’t succeed in the virtual world unless you understand where and how your potential customers are situated in the real one.“

The “where“ and “how“ are clearly explained, including these two insights:

  • Identify, serve, and invest in the isolated consumer. Virtual world sellers can have a difficult time competing with real-world sellers offering mainstream products. Instead, they should focus on target locations in which potential customers form a preference minority.
  • Go after “head“ and “tail“ locations. Bell elaborates on something he calls the “Spatial Long Tail.“ Physical locations with plenty of potential customers are the “head“ — the probable source of much of your revenue. But there are areas that are demographically similar to those locations (e.g., large university populations) that exist elsewhere. They’re the “tails.“ They might not provide as many sales as the head location, but many tails can add up to a lot. Figure out where these “doppelganger“ locations are and reach out to them.

The book blends Bell’s years of academic research and investing and consulting experience with engaging examples that range from eyeglass purveyor Warby Parker to the dating app Tinder. It also presents a unique GRAVITY framework (including factors such as geography, resistance, and vicinity) to explain how the real and virtual worlds intersect. But it’s the clear advice on what Internet sellers must do in order to succeed that makes Location Is (Still) Everything a must-read.