PRLog (Press Release) –
Apr 28, 2008 – International shoppers took advantage of the weak dollar to travel to the United States to shop for Christmas presents late last year. At the same time, U.S. retailers were trying to determine how best to bring the merchandise to them. While international expansion is nothing new for some businesses, there are so many retailers opening overseas that it’s becoming hard to keep track.
Globalizing is a smart strategy that has already paid off handsomely for many companies. For example, despite soft same-store sales, Wal-Mart was able to appease analysts due to a strong showing from the international sector, where net sales grew 18.8 percent in the fourth quarter of 2007. And just last month, Tiffany & Co. reported that international sales soared 21 percent while same-store sales rose 6 percent.
The first overseas stop for many retailers has been London. Fashions at Abercrombie & Fitch, the first U.S. teen retailer to open in Europe, have been well-received by shoppers: Its London store is able to charge twice as much for merchandise as stateside stores, and company executives estimate that overseas sales could account for half their revenue in about a decade.
It’s no wonder that the company is expanding, adding four more locations in the U.K. this year and a Tokyo store in 2009.
Other retailers expanding into London include Whole Foods, which opened its first location there last year, and Banana Republic, which opened a flagship store last month.
Storefronts are only part of the equation, however. Within the last year, online jeweler Blue Nile launched websites in the U.K. and Canada; Timberland also launched a European website last October. Other online retailers, like Anthropologie, haven’t made the leap overseas but are testing the waters by shipping merchandise overseas and accepting payments in multiple currencies.
While the U.K. provides a natural transition for U.S. companies, retailers are expanding elsewhere, as well. Apple will open its first store in Australia this summer, Best Buy plans to open up to eight new stores in Shanghai within the next year and Dunkin Donuts is undergoing massive expansion in the UAE.
U.S. retailers aren’t the only ones looking outside their own borders. U.K. powerhouse Marks & Spencer expects 20 percent of its sales will come from overseas locations within five years and has plans to open 30 new stores in the Czech Republic and China. International retailers are also venturing into the States with the opening of Tesco’s Fresh & Easy concept and a Tommy Hilfiger flagship store set to open in New York this November.
Going global isn’t easy: In addition to potential hurdles with vendors, disparities in laws and differing customer priorities, retailers must identify a merchandise mix that appeals to a new demographic. While the transition may be a bit easier for online retailers, these companies face their own challenges — nuances in language, inventory control, even the selection of website colors and fonts. But, as Tiffany and Wal-Mart can attest, the move can be well worth it.
Courtesy of NRF Stores
By: Tracy Mullin, NRF President
