Principle 1

• Customer Acceptance of Online Retail Depends on Offline Shopping Costs
• Internet retailers can alter the cost-benefit trade-off shoppers by making things “closer” and more accessible, perhaps even at better prices.

Principle 2

• Sales Evolution is Structured and Predictable
• Social Contagion from communication and observation affects online demand evolution

Principle 3

• Migrating from “Good” to “Great” Requires Expansion to Niche Locations
• Spatial Structure follows a pattern of proximity and similarity (spatial “Long Tail”)

There are two ways to think about distance:

• Geographic distance
• Social or demographic distance (people live far apart from each other still might be similar in other ways)

Two important patterns

• Gin the beginning, sales start out in larger cities and spread by proximity from person to person
• Later on, sales pick up in smaller areas that are qute far apart, but that contain “similar” kinds of people

Source: Prof. David Bell