Density, Mindshare, and Information Signaling in Hawaii - rocketMBA
READING

Density, Mindshare, and Information Signaling in H...

Density, Mindshare, and Information Signaling in Hawaii

I spent last week on vacation in Hawaii, and that included many walks through Waikiki – the tourist hub of the island of Oahu. During these walks, two businesses that seemed to be everywhere jumped out at me – Honolulu Cookie Company and ABC Stores.

The former is a local producer of excellent shortbread cookies shaped like pineapples and the latter offers snacks, drinks, basic clothing, etc.

There seemed to be an ABC Store or Honolulu Cookie Company store on every block. With a quick (and unscientific) Google Maps search, I count 10 Honolulu Cookie Company stores in Waikiki (not counting one nearby in Ala Moana) and 18 ABC stores. All of these stores are packed in a very small space, as the heart of Waikiki is just over a mile long.

While at first glance it may seem like overkill to have this many stores in such a tight space, I think it makes a lot of sense. In addition to the basic benefits that come to mind (easy restocking, convenience for the customer), I think the stores’ ubiquity is also part of their competitive advantage.

Anybody who walks through Waikiki for a few minutes will remember both companies’ stores/names, and when these tourists need to think of a gift to bring back (Honolulu Cookie Company) or to grab some sunscreen, so they don’t get cooked at the beach (ABC Stores), they will be more likely to think of the two companies that they have seen over and over.

This effect – increased mindshare – is even more pronounced given that most potential customers, who are tourists visiting Waikiki, are operating with low information. Many don’t know the best gift to bring back or the cheapest place to get sunscreen. Therefore, the prevalence of both companies has even more effect in a tourist destination such as Waikiki.

A local may know that ABC stores (note: I have no idea if this is true but let’s just assume that is the case) aren’t the cheapest place to get sunscreen and that a drugstore chain may be better. But a tourist is less likely to know that. Additionally, the small format of an ABC store offers better convenience since it is probably closer to the customer, and is more likely to come to mind first than a one-off drug store that is in the area.

Honolulu Cookie Company and ABC Stores are both fantastic business with quality products and convenience for customers. I think their ubiquity in Waikiki is also a cause, not solely an effect, of their success.

 

 


Don't want to miss out on the best of rocketMBA?

Just type in your email address below and we will send you a monthly digest!




Before graduating from Stanford GSB with an MBA in 2016, Alex worked for three years in public equity investing. Born and raised in Los Angeles, Alex enjoys hanging out at the beach with friends, playing basketball, and learning about history. He currently works in Equity Research in Downtown LA.

RELATED POSTS

Your email address will not be published. Required fields are marked *

Let's Become Friends!

We'd love to add a bit of inspiration to your inbox! Once a month our email friends receive our latests blog posts, along with insightful articles and motivational quotes. 

 

Finally a newsletter you look forward to!

You're Awesome!

Check your inbox to confirm the subscription and you're all set!