Blending AI & human judgment for strong location strategies

AI – in one form or another – is rapidly becoming an integral part of everyday business practice. Its ability to take large amounts of data and seamlessly analyse it is proving valuable across a wide array of sectors and offers huge efficiencies in process.

Little wonder then that many businesses view it as a key tool in the corporate toolkit – not least in relation to location strategy. A recent article in The Times (17 February, 2025) – highlighting how Gail’s has recently adopted a self-learning algorithm to select new branch locations – underscores the growing role of artificial intelligence in location strategy decisions.

But just how effective is AI in determining new business locations? Experience tells us that location strategy is a nuanced process. A data-driven approach is a key part of the initial analysis for any site selection project, but it may not always capture the full picture.

How does AI work in the site selection process

As with many areas of decision making, AI can be deployed in location strategy to analyse site data. According to the example cited in The Times, Gail’s uses “a computer algorithm that ‘learns on its own’ to select neighbourhoods for new branches”. Its system has complied eight years of information inputted by staff to analyse various factors. These include the presence of local churches, schools, and transport links, to help identify optimal postcodes for new retail outlets.

How should it interact with other elements of site selection?

A data-driven approach is a key part of the initial analysis of any site selection project. Yet while AI offers efficiency and scalability, it may not fully capture the unique characteristics of different communities. In the case of Gail’s, the article highlights opposition to its branches in Worthing and Walthamstow, where residents had expressed concerns about preserving neighbourhood identity and the impact on local businesses.

This emphasises the need for companies to complement algorithmic insights with comprehensive on-the-ground due diligence. This approach ensures that investment decisions foster positive relationships in a new location. Engaging with key local stakeholders, understanding local culture, and assessing potential social impacts are crucial steps in ensuring that expansion efforts are both successful and in harmony with the existing ecosystem.

How does this approach apply to other sectors?

While the example covered by The Times is focused on the retail sector, the same principles apply to corporate and manufacturing site selection projects. Factors such as current and future talent availability, infrastructure, regulatory environment, and the competitive landscape all require careful consideration beyond that which algorithms alone can provide. A well-rounded approach combining data-driven insights with hands-on due diligence is essential for sustainable and successful site selection across industries.

The importance of adopting a 360-degree approach to site selection

By incorporating up-to-date feedback from local stakeholders and potential partners, and conducting thorough site visits, businesses can gain invaluable context on potential new locations. This might include information on available incentives such as grants – particularly where government or local authorities are seeking to attract types of business to an area.

Ultimately, investing in a new location is a significant decision for any business. To get the best outcome, businesses should always seek to optimise their location strategy with a tailored approach, that combines data-led insights with expert guidance. This will ensure that every factor is considered for long-term success.