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Granular market sizing

Anonymous A

Hello! I'm thinking of how one would do the market sizing for the following two questions:

1. Annual revenue of an average bike shop in London

2. Annual revenue of an optician (think Specsavers if UK, and Vision Express if US) in a busy area (think Oxford Circus for London, Fifth Avenue for NYC)

For both i have segmented as spend * number of customers annually. For spend I think I have a firm understanding how how I would segment and weight revenue streams, but for customers annually I would like to hear how others would approach such a question!

Thank you!

Vlad replied on 10/17/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

1) From the demand side: every time you come to this store you see x ppl. You can assume how much time on average they spend at the store and calculate daily traffic. Then multiply it by the conversion rate (use an assumption based on personal experience)

2) You can also do it from the supply side:

Assume the size of the shop + warehouse room-> avg inventory (How many bikes it can fit) -> avg turnover (assume the inventory changing every season) -> sales

Best!

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