Market Segmentation by Retailers

LEGO Store, Oakridge Centre, Vancouver

LEGO has come to Canada and now has four stores. If you were in charge of finding retail locations for LEGO in Canada where would you put the stores? What would your location selection process look like?

Without knowing LEGO's market segmentation process, I assume that they looked for locations that served high income families, especially malls with very high sales per square foot.

So, Oakridge is a good choice. One of the staff told me that this was the fourth LEGO store in Canada. I guessed that two of the other locations were Yorkdale and Sherway Gardens in Toronto, and I was 50% correct. The current Toronto stores are Sherway Gardens and Fairview. (I'm sure that a Yorkdale store in in the works. One report on Yorkdale said that the Apple store there sells $10,000 per square foot. For most retailers selling $1,000 per square foot would be record breaking.)

The other Canadian store is Chinook Centre in Calgary. (Now there is a shopping centre that dominates its market in a city with lots of kids and lots of money.)

Another way that some retailers segment markets and malls is to see which retailers are already tenants. If the anchors (department stores) are Zellers and Walmart, then the mall is probably not a good fit for a LEGO store. However, if the mall has an Apple store then I'd say it is probably a great fit for LEGO. (Chinook, Fairview, Oakridge, and Sherway Gardens all have Apple stores.)

I'll keep an eye on LEGO to see where they open more stores. I'm guessing that they'll be on Apple's coat tails all the way.