Retail Forecast: The Influx of Foreign Brands

The Retail Forecast blog series is an exercise in prognostication. Gensler’s retail designers from across the country explain the trends currently affecting how people shop and predict how these trends will play out in the near future.

For the past half-century, America has exported its most iconic brands overseas. Thanks to this trend Parisians can enjoy a quarter pounder with cheese (or Royale with Cheese) at the local McDonalds and Singaporeans can purchase 1969 jeans from the Gap. By opening physical stores in cities around the world, American brands grabbed market share and cultivated loyalty with new customer bases. Such arrangements benefitted all involved parties, and because of this success American companies continue to look for new markets where further expansion is possible.

Now, the reverse is also taking place. Foreign brands, recognizing the strength and sheer size of the U.S. retail market, are coming to America. And they are not coming quietly. Brands such as Uniqlo and Topshop have opened flagships in recent years amidst splashy marketing campaigns. The companies have spared no expense in getting the word out to domestic customers. When Uniqlo came to San Francisco, for example, the company covered buses and metro cars with advertisements and even hired an airship to hover over the cities for days. The idea “Go big or go home” apparently translates across all languages.

Why open stores in America? For starters, the U.S. retail market is by far the largest in the world and potential for growth remains enormous. Secondly, America’s strong economy, insured by a federal government unafraid to help goose markets when necessary, significantly mitigates the risk inherent to opening a store in an unfamiliar territory.

So expanding your retail presence by opening a store in the U.S. seems like a surefire investment for any brand with the requisite capital, right? Not so fast. The one complicating factor which threatens to throw a monkey wrench in any foreign brands expansion plans is the stark differences of the United States’ local markets. Because America is a country defined by demographic and geographic diversity, consumer preferences in disparate regions vary significantly. From a retail standpoint, the U.S. is a collection of unique and autonomous local markets. Each features its own predilections and trends. The key to finding success in any one market is to understand the local culture better than your competitors and to cater to that specific market’s consumers in new and inventive ways.

This all ties in to the idea that for a retail brand to find success in the 21st century it must be global and local. A smart brand seeks to expand into new markets and prioritizes understanding the mindsets of local consumers. This way it can tailor its store design and product selection to the specific needs of local customer bases. A retailer that accomplishes these steps stands a very good change at finding success through expansion. And that’s one reason why I expect the trend of foreign brands coming to the U.S. to proliferate, and look forward to working with such brands as they open new stores in American cities as distinct as New York and San Francisco and everywhere in between.

British retailer Topshop's store at The Grove in Los Angeles, Calif. Image © Gensler

Barry Bourbon AIA, LEED® AP, is a leader of Gensler’s global retail practice and a principal in the San Francisco office. With a constant eye on the latest tools and technologies that connect consumers and retailers, Barry inspires colleagues to stay focused on the rapidly evolving issues facing clients, and to design for the holistic experience of a brand. Never one to shy from a challenge, Barry is an expert problem solver who excels at leading multi-location, multi-disciplinary teams with the tightest schedules and budgets. Contact him at barry_bourbon@gensler.com.

Comments

[telebrands]

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