Predicting Store Closures Using Urban Mobility Data and Network Analysis

In this paper, we show how retailers can use consumer mobility data to assess the relative performance of each store within their network. We use mobile location data from over 5M devices in Manhattan, NY to construct a weighted network of Starbucks stores as nodes, with the edge weights between any two stores reflecting both the overlap between the customers of as well as the distance between the stores. We then compute network centrality measures to capture consumption dynamics in the network. Finally, we employ these variables to train machine learning models predicting whether or not each store closed down during the 20 months following our observation period. Our findings indicate that including network centrality measures derived from urban mobility data using our methods can lead to a better identification of underperforming stores in a retailer’s network, revealed by subsequent store closure decisions.