Market Sizing: in-store photo printing kiosk

Question

Hi,

there is one case, that is about a company that wants to open an in-store photo printing kiosk in walmart stores, and asks us if this makes sense or not (ROI). Part of the case is about market sizing. It's about calculating the number of photos that will be printed in these kiosks per year.

My approach

1. number of people visiting a Walmart per day

2. number of people who want to print their photos

3. number of prints per person

4. calculation for one year

--> I would appreciate some approaches, but one question on my part is calculating the number of people visiting a Walmart per day. That would have been my approach:

A sample city: San Diego

People living in SD: 1.5 million

Walmart is one of the largest supermarket chains (assuming 50% market share): 750,000

Number of Walmarts: 20 (assumed)

Number of customers allocated to one Walmart --> 37500 people

But that would be way too high, and I would not get further at this point. I also don't know how to get from there to the number of people WHO VISIT ONE WALMART PER DAY/YEAR.

Kind regards

Answer 1

The implicit assumption that you're making is that every person living in SD visits a supermarket every day. If you assume that only 25-50% actually do shopping at all (often only 1 person per household) and then assume that they'll visit a supermarket every ~5 days on average, you'll cut the number by a factor of 10-15. Which sounds more realistic.

One issue with your approach is that if e.g. for some reason people should visit supermarkets more frequently, your approach would yield a higher number of pictures printed, which appears counter intuitive.

An entirely different approach would be to first estimate the avg. number of pictures printed per year based on demographics, etc. and then estimate the market share you can get with the printers over competitors like actual print shops.

Answer 2

Hi there,

Here's what I would do

Estimate # of daily customers per Walmart
- Visualize # of cashiers (I always think of 10-20)
- Estimate customer churn per cashier (around 1 every 3 minutes, so 20/hour)
  - You can get "fancy" with this if you like. Also want to multiple by a % of "overcapacity" i.e. customers are always lining up
Take a % of these daily customers that would use photo printing kiosk (hint: It's a small %)
- You can also get "fancy" here in terms of breakdown...probably not worth it
For customers that print, estimate # of photos
- Here, you should get "fancy"...have a breakdown of % users by job...small job "single photo" (1-2), medium job multi-photo (~5-10) and big job photo album (~25-50)
Multiply out (and multiply by cents per photo if relevant)
Estimate # of Walmarts in the region and multiply by the above

The key here is breaking things down based on 1) what makes sense and 2) what you can actually reasonably assume.

Hope this helps!

Answer 3

Hello!

It´s a good start, but things you need to take into consideration:

50% of the population is way too much (you need to include here all children, very old people, etc.)
Instead of population in general, I would use households, since it´s much easier to calculate the visits to the supermarket per household (=family) than per individual -in line with the previous point-.
Once you have the households that go to your store, you need the TEMPORAL component. For instance, assuming each family prints in a Wallmart every 3 months

Hope it helps!

Best,

Clara