Whether it's American companies landing in Brazil or Latin America or companies from those countries, and others, launching in the U.S., more retailers than ever before are going global. It's a move that just makes business sense in these trying economic times, said Jose Gomez, SVP of business development for MANGO, a clothing brand that spans 2,500 stores in 110 countries.
"It's smart to diversify your risk and not concentrate on only one market; the economy might be bad in Europe, but other markets, like the Middle East and Africa, are growing," said Gomez, who spoke about what it takes for retailers to thrive in a global arena at a keynote Sunday at NRF's BIG Show in New York City. The session also featured Neil Stern, a senior partner at retail consultants McMillanDoolittle, Ebeltoft USA, and Denis Knoops, a SVP for Delhaize, a company that owns several grocery chains around the world.
Although they had a variety of experiences, all three men agreed that there are a few key strategies to follow when operating outside your home base. They include three key points:
Have a clear reason for being where you are
It may sound simple, Stern said, but a retailer must have a clear understanding of what it's adding to the market. For example, Ikea has been able to differentiate itself from competitors with its trendy and affordable products and designs. Ikea brought the market something new, and customers know what to expect from it.
Partner with local talent
Doing business in another country means learning new laws and cutting through more red tape, so it's best to partner with someone to help you understand those trials. It's also a good idea to partner with a local brand to help provide your brand with credibility. For example, when Tesco launched in Korea it partnered with Samsung.
Listen to your customers
Again, this may sound like another no brainer, but chains must listen to customers and respond to their specific needs — and that may require a retailer to adjust marketing strategies or product offerings. When Starbucks opened in China, for example, it made sure to add more seating, because it studied the market and learned that most of their customers linger longer in the coffe shops than most westerners. Best Buy UK, on the other hand, failed because it opened huge stores, without taking into consideration that the big-box store had already run its course there.
Although successful global retailers take a country's culture into consideration, they also stay true to their own brand identities. Finding that balance is key.
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Before joining Networld Media Group as director of Editorial, where she oversees Networld Media Group's nine B2B publications, Cherryh Cansler served as Content Specialist at Barkley ad agency in Kansas City. Throughout her 17-year career as a journalist, she's written about a variety of topics, ranging from the restaurant industry and technology to health and fitness. Her byline has appeared in a number of newspapers, magazines and websites, including Forbes, The Kansas City Star and American Fitness magazine. She also serves as the managing editor for FastCasual.com.