Today, most of us love to browse and shop online. We scroll through websites, compare products, and read reviews on our phones and laptops. But there are some things you just have to see and feel in person—like jewellery, or a fancy watch.
For these products, the look, feel, and experience matter a lot. That’s why many brands, even the ones who started online, are expanding into offline stores. They also aim to provide the customer with a seamless online-offline (omnichannel) experience.
In addition to the above, the evolution from purely online to offline presence is also a natural progression for many D2C e-commerce platforms seeking to expand their reach.
According to a report by the International Council of Shopping Centers (ICSC), opening a physical store leads to a 37% increase in overall web traffic for a brand within the same market area. Brands also observe a higher conversion rate in stores (50-60%) as compared to 3-4% on websites.
Setting up a store isn’t only about opening doors and hoping people walk in. It’s about choosing the right location so you can reach the right people (your Target Group, or TG) and get lots of foot traffic. If you pick a great spot, more people come to visit, buy, and share their experience with friends!
This is why picking the right store location is very important. This blog explores why the right store location can make all the difference for D2C brands going offline.
Stores have become media. Their role is not just to sell but to create brand experiences that drive engagement everywhere.
Table of Contents:
1. The 6 Pillars of Retail Store Expansion Strategy
A successful expansion isn’t about speed—it’s about preparation. Expanding your retail footprint is a big step—but it’s not just about opening more stores. It’s about doing it smartly.
This framework shows the 6 key steps every brand should follow:
1.1. Start With the Store’s Break-Even Point
When choosing a store location, there are a few things you must look at closely — and break-even point is one of the most important. This tells you how long it will take for the store to start covering its costs and making profit.
To calculate that, first check the predicted monthly revenue of the store — how much sales do you expect every month? Then compare that with the rent you’re paying. A good thumb rule is that your rent-to-revenue ratio should be 10% or more.
That means your rent and other fixed costs are under control, and you’ll have enough margin left to run the store profitably.
1.2 Track the Payback Period
When setting up a physical store, one key metric to track is the payback period—the time it takes to recover your initial investment and break even.
This includes setup costs like interiors, rent, staffing, and inventory.
Industry benchmarks can vary by category, but typically range from 12 to 24 months. For example, QSR chains aim for a payback within 12–18 months, while fashion or lifestyle stores may take 18–24 months.
It’s important to model your expected revenue, margins, and footfall to estimate this timeline accurately. Tracking the payback period helps you evaluate store performance, plan future expansion, and make informed decisions on scaling your offline presence.
1.3. Look at the Stores Around You & Focus On The Network Effect
The second important thing — which many people forget — is to look at the neighborhood around your store. It’s not just about picking a busy location. You also need to ask:
- What kinds of stores are nearby?
- Are they similar to yours?
- Are you in a cluster of brands from the same category?
If yes, then you’re part of a store network — where customers have multiple similar choices in the same area. This can be both helpful (more footfall) and risky (more competition).
This is where the idea of Nash equilibrium comes in — everyone in the area benefits as long as each one plays their role.
Read more – Location Tricks: Why Stores Cluster?
Advantages of Competitor Clustering
- Sharing customer pie: By choosing this “clustering” strategy, they avoid direct competition and share the customer pie, ensuring a safer bet for both.
- Destination Power: Clustering creates a “one-stop shop” effect. The collective presence attracts a larger, more engaged audience, benefiting all tenants.
- Cost-Sharing: Sharing resources like parking, security, and even marketing can significantly reduce costs for all involved.
- Productivity and innovation: Close proximity breeds healthy competition. It leads to innovation benefiting customers ultimately, leading to a win-win for everyone.
The logic of clustering extends far beyond restaurants and shops. Consider gasoline stations, gyms, and even tech giants in Bengaluru. Clustering creates a critical mass, attracting a concentrated target audience and establishing dominance in a specific market.
1.4 Exact Location of the Store
Once you decide the market or area, the next step is to look at the exact location of the store — because even within a good market, the wrong spot can cost you walk-ins. Make sure you consider these questions:
- What does the store front (facade) look like? Is it wide enough to grab attention?
- Can you place signboards or billboards easily? Visibility is key.
- Is there parking space nearby? Lack of parking can turn people away.
- Is there a washroom inside the store? Especially important for food or service-based businesses.
- Where is the store located — ground floor, first floor, or basement?
Ground floor stores usually get the highest footfall. First floor or basement locations often get ignored.
Even if you’ve picked the right market, getting the micro-location wrong — like poor visibility, no access, or limited space — can completely break the store’s performance.
1.5 High Street Vs Shopping Mall
Another major decision to make early on is: Should you open in a high street or a mall?
- High streets give you more flexibility and independence. You can control your store’s identity, and sometimes the rent is lower too.
Malls offer ready footfall, better infrastructure, and brand visibility — but come with higher rent and sometimes revenue-sharing models.
If there’s an upcoming mall or market that’s still developing, and you’re able to predict future footfall or revenue in that area, you can get in early and lock in a low rent. Yes, established markets give you more certainty — but they also come with higher costs. If you can spot the potential early, you get the advantage of low rent + high future returns. This kind of early bet can give you a long-term edge.
1.6 Ideal Square Foot
Next, you need to think about the size of your store and what is the ideal square footage for your format. It should be enough to display products comfortably and allow smooth customer movement, but not so big that you end up paying for unused space.
Along with that, check the store’s frontage — a wide, open facade lets people see inside easily and encourages walk-ins. You don’t need a fancy glass front or heavy decor that blocks visibility.
Apart from these, understanding your store’s surroundings help to a great extent. Make sure to look at what’s around your store.
Is it a school zone, college area, or residential locality?
Your location will influence what you sell, how you price it, and when you open.
For example, a college area might need trendy, affordable items with later store hours, while a residential zone might work better with essentials and early openings.
2. Why Do Physical Stores Matter For Certain Product Categories?
While e-commerce is growing fast, many people still prefer buying certain products in person—especially high-touch categories like fashion, jewellery, or home decor.
Studies show that some product types are simply better suited for offline experiences, where customers can see, touch, or try before buying. That’s why physical stores continue to play a key role.
But it’s not just about having a store—it’s about creating the right in-store experience. Store interiors, layout, lighting, and product displays all influence how people feel, explore, and decide to buy.
3. How to Use Tech to Scale Up Your Store?
Technology isn’t just for online brands—smart retailers use it to grow their physical stores too. When used right, tech helps you make smarter decisions, reduce risks, and boost store performance.
Here’s how you can do it:
- Identify the Right Store Location: Use data from your website, online orders, and ZIP code heatmaps to find areas with high potential but low current presence.
- Understand Store Economics: Track metrics like revenue per sq. ft., conversion rates, average order value, and customer demographics using POS and analytics tools.
- Drive Footfall with Digital Marketing: Use local SEO, Google Business profiles, location-based ads, and influencer tie-ups to bring people from online to offline.
4. How Tech Tools Help You Pick the Right Location?
Once you’ve figured out the basics like area, size, and type of market, the next smart step is to use tech tools and data to make better location decisions. Many companies today rely on data and analytics to find the best possible store locations.
It’s faster, more accurate, and helps reduce the risk of making costly mistakes. Here’s how it helps:
- You can analyze footfall, income levels, competitor presence, and customer demographics in different areas.
- You can also identify gaps — places where customer demand is high, but supply is low.
These insights act like a first-level filter, helping you shortlist the best areas without visiting each one manually. Here are some useful tools:
4.1 GeoIQ
GeoIQ is a leading example of location intelligence solution provider in India that harnesses vast real-world datasets—covering foot traffic, demographics, spending patterns, and even competition density.
Brands can access detailed street-level reports that help them compare potential locations quickly and accurately. This not only accelerates decision-making but also slashes the risk and cost of poor store placements. GeoIQ’s models allow retailers to:
- View actual and predicted footfall numbers for malls, markets, and high streets.
- Assess catchment areas based on target consumer traits.
- Score locations using customized factors like nearby competitors, household income, and expected revenue.
- Forecast potential sales and ROI, helping retailers prioritize neighborhoods or cities.
- Understand cannibalization risk between existing and new stores.
Their solutions have helped Indian brands open thousands of stores with fewer failures and faster break-even times—sometimes reducing site-selection timelines by four times and delivering up to 37% higher monthly sales. Clients include names like Lenskart, The Sleep Company, and prominent QSRs (Quick Service Restaurants) and jewelry brands.
For example, QSR (Quick Service Restaurants) like McDonald’s, Domino’s, and Subway rely on high footfall locations such as malls, colleges, and busy streets to drive fast-paced, high-volume sales.
On the other hand, jewelry brands like Tanishq and CaratLane prefer premium, high-trust zones such as high streets, shopping hubs, or upscale residential areas to attract quality walk-ins.
4.2. Placer.ai
Placer.ai is a powerful location analytics tool that helps brands make smarter decisions by showing how people actually move in the real world. It uses anonymous mobile data to track footfall, dwell time, visit frequency, and even competitor traffic.
You can see how many people visit a location daily, which times are busiest, how long they stay, and where else they go.
Key Features of Placer.ai
- Tracks real-world foot traffic using anonymous mobile data
- Shows visit trends: daily, weekly, monthly footfall
- Measures dwell time – how long people stay at a location
- Offers competitive analysis – see where your customers go before or after visiting your competitor
- Provides demographic and behavioral insights for specific locations
- Visual dashboards for easy comparison between multiple sites
Pros
- Gives accurate footfall data – better than relying on assumptions
- Helps compare multiple store locations side-by-side
- Useful for spotting high-traffic areas and peak hours
- Ideal for site selection, expansion, and performance benchmarking
- Saves time by reducing manual research
Cons
- Works best in developed areas with high mobile usage — may have limited data in emerging or rural zones
- Historical data for brand-new markets might be missing
- Can be expensive for startups or smaller businesses
- Requires some training or experience to fully utilize advanced features
All of these tools together create a data-first process for store location planning.
Instead of relying only on brokers or gut feeling, you can use real-time insights to shortlist, compare, and confidently select your next store location.
The future of retail lies in blending the best of online convenience with offline experience.
5. Conclusion
While opening the store is one thing, getting people to walk in is a whole different challenge. That’s where strategies like local SEO, Google Business listings, location-based ads, and smart online-to-offline tactics play a key role in driving footfall.
Read more – Local SEO: Marketing strategy to convert Online traffic to Offline
If you’re exploring your next offline store location and want expert guidance on making data-backed, high-impact decisions, we’d be happy to set up a consultation call. Reach out to us at saurabh@daiom.in.
For more informative content and blog, follow and stay tuned to DAiOM.
Subscribe to our NEWSLETTER!