Where Should Our Next Retail Store Be Located? When Fan Bi was a college student at Australia's University of New South Wales, he visited Shanghai and discovered the joy of shopping for custom-made shirts in the city's famous fabric markets. Bi says that he once was satisfied with buying dress shirts "off the rack," but he quickly grew accustomed to going to a fabric market, being measured, selecting the specific fabrics, and designing the details of his shirts. Not only were the shirts Bi purchased of better quality than the off-the-rack shirts he had been purchasing, they also were less expensive, which led Bi to an idea for a Web- based customized shirt company aimed at graduating college students who need professional wardrobes but cannot afford luxury prices. While studying abroad at Babson College in Wellesley, Massachusetts, Bi met Danny Wong, a student at nearby Bentley University. Together, they teamed up with a programmer on the West Coast and launched Blank Label, an online business based in Boston that allows shoppers to design their own custom shirts ("Designed by you, stitched by us"). Customers can select the fabric, collar style and color, placket, cuff, pocket, buttons, monogram, and even a custom label. In less than 18 months, Bi and Wong sold more than 7.000 shirts and used the Internet exclusively to operate their company. Soon. than 7,000 shirts and used the Internet exclusively to operate their company. Soon, however, Bi recognized the importance to retailers of a multichannel approach, offering customers the ability to purchase items online or in a retail store. Allowing customers to touch and see products is important in a retail setting, especially for companies such as Blank Label that sell custom clothing. That realization led Bi to open the first Blank Label retail store four years later in Fort Pointe, one of Boston's fastest-growing areas, and saw its sales increase significantly. As a result, the company, which now sells custom suits and pants in addition to shirts, opened a second location, this one in downtown Boston. Before long, sales at its physical stores were generating 70 percent of the company's total sales, and Bi began making plans to open other retail stores. The goal is to open four to five retail stores per year initially- before unveiling twice that many in three or four years. The big question, of course, is where to locate them. Bi believes that a city along the East Coast would be ideal because he believes that the custom menswear market there is underserved. Cities he thinks may be best include Washington, DC, and Charlotte, North Carolina. As CEO, Bi recognizes that spending time on an airplane or a train traveling to a distant retail location is not the best use of his time. Bi knows that the next city he chooses for a retail store should match Blank Label's customer base, which is quite different from what he and cofounder Wong initially assumed. Rather than being comprised of twenty-somethings building their professional wardrobes, the majority of the company's 30,000 customers are educated, professional men between the ages of 35 and 45 who appreciate the high quality and custom fit that Blank Label garments offer at reasonable prices. Tailors on London's Savile Row typically charge $275 or more for custom-made shirts, and bespoke suits often start at $1,200 and can quickly reach $4,000 to $5,000; Blank Label's custom shirts start at just $95, and its custom suits start at $750. Bi is considering using temporary pop-up stores in cities that make the short list for potential expansions as a way to test their market potential. 1. What process should Bi use to identify the best cities for Blank Label's retail expansion plans? How might the company use its database of information on its existing online and retail store customers in the location decision? 2. What criteria should Bi use to evaluate prospective cities? 3. Do you agree with Bi's idea of using temporary pop-up shops in certain cities to test their market potential for Blank Label's custom-made clothing line? Explain. What are the advantages and disadvantages of this technique? 4. Use the resources of the Internet to identify cities that Bi should consider for Blank Label's next retail store and explain why you chose them