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

Guesstimate Market sizing
New answer on Feb 29, 2020
5 Answers
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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!

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Luca
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replied on Feb 28, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score

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

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Gustavo
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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

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Clara
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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

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Antonello
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replied on Feb 29, 2020
McKinsey | MBA professor for consulting interviews

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

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Vlad
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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

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Luca gave the best answer

Luca

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