Project: Market Size and Attitude

Individual user interviews:

I performed two in-person interviews with Stanford students about their relationships with their clothes and lending/borrowing clothes on campus. The two students I interviewed had quite different perspectives on their clothes. Even though both valued clothing, they had two different mindsets on how they acquired clothes and maintained their wardrobe. I would have to do more interviews and research to see if we could potentially segment the market into two different groups: borrowers and buyers.

Quotes:

“I’d say I really like the clothes i own – I care a lot about my style. I tend to get bored of the clothes I own so I have to buy new clothing items on a monthly basis.”

“I’m a little less excited about my ‘going out’ clothes – because I don’t wear them as much, I put a little less thought into them. I don’t have too many bc I don’t want to pay too much for clothes I don’t wear . . . my going out clothes are usually my friends'”

Shared market size research:

TAM  – Total Addressable Market

• • How many people would want or need the product?
    • 330 million people in the United States
    • Sports fans
      • 26% of the United States avid sports fans

• 44% casual sports fans – casual sports fans would be a big target for sports fans (~145 million)

• • • • Assumption that most would be a one sport season fan ~4 months
  • Costume/holiday
    • Would only apply for large holidays – Halloween, Christmas, Easter, etc
    • These people are likely encapsulated in the sports market 
  • **I don’t think this generalizes as well to the TAM.  I think it would be better to change the revenue structure when generalized to all adults because a year-around subscription model would not serve as well for these one off holiday and sporting event situations.
• How large would the market be in $$ if they all bought in?
  • 145 million * 10 * 4 = $5.8 billion net revenue

SAM – Served Available Market

• How many people need or can use the product? 
  • Probably a matter of want more than a matter of need – would be useful for four year college students, specifically those students that do not live at home 
  • 14 million college students in the US that attend a 4-year university
    • ¼ of these students live with their parents, but the service could still extend to these students
    • ~30% of college students participate in parties, 4.2 million students

• How large would the market be in $$ if they all bought in?
  • Clothing donations **
  • 4.2 million projected customers
  • $10/month subscription + possibly option to buy used clothes ($5 every other person per year)
    • $10/month I got by talking to students to see what they would be willing to pay for a monthly subscription service for rally

• 8 months of school year (excluding december, june, july, august)
• 8*10*4.2 million + 5*2.1 million = $346.2 million

SOM – Serviceable Obtainable Market

• • Stanford students 
    • Clothing donations**
    • 25% of Stanford students participate in Greek life, but you don’t join Greek life until Spring freshman year (2000 students for 3 months, 1500 students for 5 months) = 6000+7500 = 13,500 subscriptions if everyone subscribed
      • Based on campus culture from talking to students, seems like somewhere from 25-50% would be subscribe (3375-6750 subscriptions per school year)
    • 97% of students live on campus (~7500 students)
      • 10% of on campus students not in Greek life would be interested in participating in social activities creating a need for costume wear and ¼ to ½ would subscribe (750 additional students, 1500-3000 subscriptions per school year)
    • Assuming for every other person participating, we would profit $5 from purchase of costume wear = 612.5-1225 students 
      • Average of ~920 students
  • Total $$
    • 4875-9750 subscriptions per year
      • Average of 7300 subscriptions per year

• • • $73,000 from subscriptions

• • • • • 920 student purchases of clothing

• • • $1,840 from purchases

• • • ~$75k/year