Get Active in Our Amazing Community of Over 451,000 Peers!

Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!

Market sizing: number of customers to an H&M store / day

Guesstimate Market sizing
New answer on Dec 31, 2021
6 Answers
3.3 k Views
Anonymous A asked on Feb 28, 2020

Hi,

I tried to estimate: “how many visitors an H&M store has per day” but had some difficulties with setting the boundaries, which I need some input on. I’m aware that several factors impact the number of visitors, such as weather, regular days versus weekends, seasonality related variations and that the number of visitors on a day depends and varies due to the time (peak hours versus non-peak hours) etc. What of these aspects, and potentially other, are reasonable to include?

However, my major issue concerned the fact that H&M is a global company, and I therefore assume the number of visitors to vary significantly between countries and cities. Should I use my own country’s market (Sweden), and accordingly a store in Stockholm as a proxy, or what market(s) could be used to represent the visitors in an appropriate way?

If anyone has a solution on this, I would be grateful!

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Luca
Expert
Content Creator
replied on Feb 28, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello,

All of your points make sense and those are all questions that you can ask your interviewer at the beginning of the case. Before starting your case, you have to clarify all the boundaries and to agree on some assumptions that you can do (for example, since you want to know an "average" customers/day it is reasonable to assume a sunny day in a spring month).

Best,
Luca

Was this answer helpful?
Gustavo
Expert
replied on Feb 28, 2020
Ex-Bain & Company | Everyone can land a job at consulting

Hi,

This is a very good question, as often times Market sizing / Estimation questions are stated as simply as that one: "How many visitors an H&M store has per day"

It's good practice in those situations to try to define the scope very well, i.e.:

1. Ask details about the store (Large/Small, Suburbs/Downtown, Street/Mall, country, season, etc) to show that you know that the number of visitors would depend on those factors.

2. Usually, after that, the interviewer will give you a specific set for the case, for example, "consider a regular downtown store in Stockholm on a regular day"

3. If something is still open, just keep it simple and don't make things harder for yourself =]

Hope it helps

Best

Was this answer helpful?
Clara
Expert
Content Creator
replied on Feb 29, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

It´s a quite unique prompt, since it´s not in all H&M shops but in one in particular. Hence, it´s much easier than the normal case, in which you would later need to estimate the total number of stores.

In this case, I would use my personal experience in a shop, calculating a threshold for peak hours and % over that for the rest of the hours.

Hope it helps!

Cheers,

Clara

Was this answer helpful?
Ian
Expert
Content Creator
replied on Dec 31, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

  1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
  2. Decide whether a top-down or bottom-up approach is best
  3. Figure out what you know you know, and what you know you don't know, but could estimate
    1. This helps you determine how to split out buckets
  4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits
Was this answer helpful?
Antonello
Expert
Content Creator
replied on Feb 29, 2020
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi,
I would consider the bootle-neck of the store (i.e. the line at the cashier) to estimate the number of customers in peak hours on an average day. Then take a percentage to calculate the non-peak hours.

Best,
Antonello

Was this answer helpful?
Vlad
Expert
replied on Feb 28, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Since the question says customers in store / day, you should take one store and use your personal experience (# of people at the counter + peak off peak time assumptions) to estimate

Best

Was this answer helpful?
Luca gave the best answer

Luca

Content Creator
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
64
Meetings
3,104
Q&A Upvotes
33
Awards
5.0
19 Reviews