MARKET SIZE ESTIMATION

FOR EMAGISPACE
RETAIL SEGMENT

INTRODUCTORY NOTE
The following market estimation (for United States only) has been drafted by the consultant based
on factual data (as provided in the document), calculated assumptions referenced from these sources,
as well as the consultants general understanding of the relevant markets (in consultation with the
client)

As the estimations are specific to the consultants opinion, the client is welcome to modify any
assumption indexes, resulting in relevant changes to the estimates
As the information on the operating industry (modular walls/temporary wall solutions) is very minimal,
the market estimation would have a broader range of variation and largely serve as early
indicators on market at hand for EMAGISPACE
Such a market sizing could help in providing pointers to EMAGISPACE but will not indicate
actual sales forecasts
The approach followed is that of a Top-Down nature, wherein the size of the overall market is
estimated from which the Total Addressable Market (TAM), Serviceable Addressable Market
(SAM) and Share-Of-Market (SOM) are calculated
Additional information about the industry in the form of relevant statistics has been provided

THE OVERALL MARKET

Represents the entirety of retail establishments across the United States

SNAP SHOT OF THE U.S RETAIL INDUSTRY

Worldwide, the total retail sales were more than $22 trillion in 2014, according to a
report from eMarketer.com
Total annual U.S. retail sales have increased an average of 4.5% between 1993 and 2015
According to the 2015 Global Powers of Retailing report, 76 of the largest retailing
companies in the world are based in the U.S

98.6% of all Retail Businesses Employ Fewer Than 50 People

The top 15 states (accounting for 65% of total retail establishments) in terms of the total number
of retail establishments in 2012 were California, Texas, Florida, New York, Pennsylvania,
Illinois, Ohio, Georgia, North Carolina, Michigan, New Jersey, Virginia, Tennessee,
Washington, and Indiana
The Store Retail Trade is classified into 11 broad categories (presented in subsequent slides)
Sources: https://nrf.com/advocacy/retails-impact

TOTAL ADDRESSABLE MARKET (TAM)

Represents the Number of new retail establishments to be set up in a
given year (Year 2015 is taken as the year of reference)

RETAIL SECTORS CONSIDERED

(Ref. North American Industry Classification System)
1. Motor vehicle and parts dealers
2. Furniture and home furnishings stores

3. Electronics and appliance stores

4. Building material and garden equipment and supplies dealers
5. Food and beverage stores
6. Health and personal care stores
7. Gasoline stations
8. Clothing and clothing accessories stores
9. Sporting goods, hobby, book, and music stores

10. General merchandise stores

11. Miscellaneous store retailers (Incl. florists, office supplies, gift stores, art stores and others)

APPROACH FOR ESTIMATING TAM

1. The number of retail establishments (as enumerated in the first quarter yearly) in each of these sub sectors
across the last 5 years (2011 to 2015) was first tabulated

2. The CAGR for this period was calculated for each of these sub-sectors
3. Extrapolating this CAGR, the expected number of establishments at the end of Q1 2016 was
estimated
4. By calculating the difference between the values of Q1 2015 and Q1 2016, the number of new
establishments slated to be built in the year 2015 was calculated for each subsector

5. For some sub sectors there is a decline in the number of store establishments (possibly owing to
the rapid increase of e-commerce)

6. The sum total of the expected number of establishments to be built in the year 2015 has been
calculated as the TAM

7. Sectors which are expected to see a decline in store establishments have been removed from
the TAM summation

TAM = 7,669
RETAIL SUB-SECTOR
Motor vehicle and parts dealers

ESTIMATED NUMBER OF NEW

ESTABLISHMENTS TO BE SET UP IN YEAR 2015
790

Furniture and home furnishings stores

Electronics and appliance stores

Building material and garden equipment and supplies dealers

Food and beverage stores

1349

Health and personal care stores

2894

Gasoline stations

309

Clothing and clothing accessories stores

187

Sporting goods, hobby, book, and music stores

General merchandise stores

1820

Miscellaneous store retailers (Incl. florists, office supplies, gift

stores, art stores and others)

320

Total (TAM)

7,669
Note: A spreadsheet has been provided separately with the detailed calculations and sources

SERVICEABLE ADDRESSABLE MARKET

(SAM)
Represents the Number of those new retail establishments that may
choose to use temporary wall solutions of any nature

APPROACH
An attempt was made to estimate the general proportion of retail stores that are present in
malls vis--vis those that are exclusive brand outlets the rationale was to provide a greater
probability of using temporary wall solutions to the stores that are in malls (as there is a
greater chance of relocating) and a lesser penetration ratio to exclusive stores, but such
information was not available
There is no clear indicator of preferences/buying behaviour of retailers on Modular/Temporary
walls as a result of which hypothetical assumptions have been made to find out the
addressable market for such products

Research has indicated that currently the modular wall market forms a miniscule portion of the
overall North America office furniture market - Between 1 and 5%
Using this as the only indicator, two scenarios have been assumed A conservative scenario
wherein only 5% of the new retail establishments may consider using temporary wall solutions,
and a neutral scenario with a penetration of 10%
Sub-sectors from the TAM calculation which are not expected to have new establishments set
up, have been removed from the SAM calculation
Source: http://www.innerspaceeng.com/info/Modular-Walls-Market_db-v06.pdf

SAM = 767
RETAIL SUB-SECTOR
TAM

Motor vehicle and parts

dealers

790

Food and beverage stores

1349

Health and personal care

stores

2894

Gasoline stations

309

Clothing and clothing

accessories stores

187

General merchandise stores

1820

Miscellaneous store retailers

320

Total (TAM)

CONSERVATIVE
SCENARIO

NEUTRAL
SCENARIO

SAM
(As per
conservative)

SAM
(As per
neutral)

39

79

67

135

5%

10%

145

289

as addressable

as addressable

15

31

19

91

182

16

32

383

767

On a positive note, the neutral scenario estimates have been carried forward to SOM calculations
Note: A spreadsheet has been provided separately with the detailed calculation

SHARE OF MARKET (SOM)

Represents the estimated number of those retail establishments which would install
EMAGISPACE solutions.
In addition a broad estimation of the Square feet of usage has also been provided

APPROACH FOR SOM (Number of Retail establishments)

In the absence of competitor market shares
and the lack of any primary research, there
would be no clear way of directly estimating
the Obtainable market

For a reference, the Diffusion of innovations

(as illustrated on the right) has been used
According to the same, a new technology
would be adopted by successive groups of
consumers, as the product penetrates the
market

Initially (during the first year) , it may be taken that

a minimum 2.5% of the market (comprising
innovators) would implement EMAGISPACE
This penetration ratio has been considered as
the Conservative estimate
A slightly higher adoption ratio of 7.5% has
been considered as the Likely Estimate
Source: https://en.wikipedia.org/wiki/Diffusion_of_innovations

SOM = 58
CONSERVATIV
E SCENARIO

NEUTRAL
SCENARIO

SOM
(As per
conservative)

SOM
(As per
neutral)

RETAIL SUB-SECTOR

SAM

Motor vehicle and parts dealers

79

Food and beverage stores

135

10

Health and personal care stores

289

22

Gasoline stations

31

Clothing and clothing

accessories stores

19

General merchandise stores

182

14

Miscellaneous store retailers

32

19

58

Total (TAM)

2.5%

5%

adoption

adoption

On a positive note, the neutral scenario estimates have been considered. The Serviceable Obtainable Market or Shareof-market in the retail space for EMAGISPACE is estimated to be 58 establishments in the first year of operation

Note: A spreadsheet has been provided separately with the detailed calculation

SOM (AREA OF USAGE) = 151,800 sq. feet

According to the 2007 Economic Census, there were 1,122,703 retail establishments
in the United States and a total of 14.2 billion square feet of retail space
This returns in a an average of approximately 12650 sq.ft per retail store
In order to obtain the average floor dimensions for a retail outlet, the following
assumptions & calculations were performed:
The retail outlets are considered to be of Square shape and having 2 floors

Therefore it has been estimated that the average dimensions of a store floor would
be 112 *112

For the purpose of minimum usage for temporary wall solutions, it has been
considered that each store would purchase EMAGISPACE solutions for at least 1
times their store size
The average height of the wall is considered as 12 feet
Therefor the minimum usage area works out to 112 * 112 * 12 = 151,800 sq. feet

COMPETITIVE INFO (For cross referencing SOM area value)

ENVY Modular Wall Systems claims that , every 700 sq. feet of Envy MWS reduces 1 ton
of landfill debris from conventional framing or MSDW
They have saved 238 tonnes of landfill in 2015 which indicates an approximate coverage of
166,600 sq feet

Source: http://envymws.com/

SUMMARY OF MARKET SIZING RETAIL SEGMENT

TAM : 7,669
SAM : 767

SOM
58 retail stores
151,800 sq.ft

Source: http://envymws.com/