What is the contribution margin for:

a. One average lunchtime shopper at the Exchange Tower store.

b. One average after-work shopper at the Exchange Tower store.

c. One average online first-time customer

d. One average online return customer

 

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EXCHANGE TOWER STORE SALES If the Exchange Tower store were to reopen for the 2021 fiscal year, it was estimated that the number of daily customers would drop significantly from the previous fiscal year, due to reduced commuter foot traffic. Piltz expected five to 10 customer orders each day the store was open in the fiscal period. Piltz had identified that the Exchange Tower location serviced two types of shoppers. The first type was a busy professional on lunch break who was looking for a quick purchase. The second was a business professional who visited the store after work hours to take advantage of Thursdays' personal shoppers. For lunchtime shoppers, their average purchase was one shirt and one pair of pants, whereas the after-work shopper purchased, on average, one cashmere set, one dress, and one pair of pants. Piltz estimated that the Exchange Tower store would be open for 250 days in the 2021 fiscal period. Of the estimated customer purchases each day, 20 per cent would be for after-work shoppers. ONLINE SALES Piltz grouped Thursdays' online customers into two types: first-time customers and return customers. To entice first-time customers to make an online purchase, a 10 per cent discount was applied at checkout. First-time orders tended to be lower in value, as customers wanted to assess the quality of the clothes before making a bigger purchase. On average, a first-time customer order comprised one shirt and one dress, while the average order from a return customer comprised one pair of pants and one non-cashmere lounge set. (Cashmere lounge sets were rarely purchased online, as consumers preferred to feel the quality of the cashmere before making a purchase.) Piltz projected that the online store would generate between $650,000 and $850,000 in revenue for the 2021 fiscal year without any additional marketing. This figure would be split evenly between first-time and return customers. If the Instagram partnership opportunity was pursued, it was estimated that anywhere between 2 per cent and 4.5 per cent of all followers reached would visit Thursdays' online store. Piltz believed 2 per cent of these visitors would make a first-time purchase and 20 per cent of these first-time purchasers would make a second purchase in the 2021 fiscal period. Thursdays incurred a flat $7.14 fee for every online order shipped out. On orders of $60 or less, Thursdays would charge the customer a $10 delivery fee, down $5 from the pre-pandemic charge of $15. No shipping charge was passed onto the customer on orders over $60. EXCHANGE TOWER STORE SALES If the Exchange Tower store were to reopen for the 2021 fiscal year, it was estimated that the number of daily customers would drop significantly from the previous fiscal year, due to reduced commuter foot traffic. Piltz expected five to 10 customer orders each day the store was open in the fiscal period. Piltz had identified that the Exchange Tower location serviced two types of shoppers. The first type was a busy professional on lunch break who was looking for a quick purchase. The second was a business professional who visited the store after work hours to take advantage of Thursdays' personal shoppers. For lunchtime shoppers, their average purchase was one shirt and one pair of pants, whereas the after-work shopper purchased, on average, one cashmere set, one dress, and one pair of pants. Piltz estimated that the Exchange Tower store would be open for 250 days in the 2021 fiscal period. Of the estimated customer purchases each day, 20 per cent would be for after-work shoppers. ONLINE SALES Piltz grouped Thursdays' online customers into two types: first-time customers and return customers. To entice first-time customers to make an online purchase, a 10 per cent discount was applied at checkout. First-time orders tended to be lower in value, as customers wanted to assess the quality of the clothes before making a bigger purchase. On average, a first-time customer order comprised one shirt and one dress, while the average order from a return customer comprised one pair of pants and one non-cashmere lounge set. (Cashmere lounge sets were rarely purchased online, as consumers preferred to feel the quality of the cashmere before making a purchase.) Piltz projected that the online store would generate between $650,000 and $850,000 in revenue for the 2021 fiscal year without any additional marketing. This figure would be split evenly between first-time and return customers. If the Instagram partnership opportunity was pursued, it was estimated that anywhere between 2 per cent and 4.5 per cent of all followers reached would visit Thursdays' online store. Piltz believed 2 per cent of these visitors would make a first-time purchase and 20 per cent of these first-time purchasers would make a second purchase in the 2021 fiscal period. Thursdays incurred a flat $7.14 fee for every online order shipped out. On orders of $60 or less, Thursdays would charge the customer a $10 delivery fee, down $5 from the pre-pandemic charge of $15. No shipping charge was passed onto the customer on orders over $60.

Answer rating: 100% (QA)

a 265 b 555 c 105 d 375 step 1 contribution margin ... View the full answer