Data, artificial intelligence, and territorial strategy explain why some brands expand while others shut down stores.
Despite the rise of e-commerce, physical location remains a decisive factor in business success—or failure—especially for micro, small, and mid-sized companies in sectors such as food, personal services, and retail. Today, opening in the right place is no longer a matter of instinct; it is a strategic decision driven by data.
Commercial planning studies show that a difference of just 200 meters between two store locations can translate into as much as 35% more revenue, depending on pedestrian traffic, customer profile, and nearby competition. Relying solely on “business intuition” can be costly: stores in low-traffic areas, locations with rents misaligned to demand, or oversaturated markets often lead to weak sales, rising costs, and early closures.
That reality is pushing more companies to rely on artificial intelligence and machine learning to guide expansion decisions. Brands such as Little Caesars, FedEx, Petco, Adidas, and Visa have reshaped their growth, logistics, and marketing strategies using models that identify high-potential areas, optimize delivery routes, and pinpoint locations with stronger expected returns.
A recent contrast highlights the stakes. While Dick’s Sporting Goods has doubled down on physical retail—investing in larger, experience-driven stores located in high-demand areas—its historic rival Orvis announced plans to close nearly half of its U.S. stores. According to reporting by TheStreet, the company acknowledged that many of its locations no longer aligned with current consumer behavior or rising operating costs. The difference wasn’t the product itself, but the location strategy behind it.
Five Key Factors When Choosing a Business Location
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Type of business and sector
A barbershop, gym, and specialty restaurant all depend on different traffic patterns and customer habits. -
Customer profile
Clearly define your ideal customer. Public census data, municipal statistics, and local market studies can reveal who lives, works, or passes through an area. -
Foot traffic
Higher traffic often means greater opportunity—but also higher rent. Balance visibility, accessibility, and cost. -
Competition and real demand
Clustering near competitors can attract customers, but only if demand is strong enough to sustain multiple businesses. -
Cost and safety
Rent must be financially sustainable, and perceived safety strongly influences purchasing decisions.
In today’s tighter economic environment, location is no longer an operational detail—it’s a competitive advantage. Choosing the right place doesn’t guarantee success, but choosing the wrong one almost always speeds up failure.
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