MAPIC: The key to succeeding in the US as an overseas retailer is to understand the American consumer but not “Americanise” your business.
That was the key message from This Land is your Land: Expanding into the USA, a panel debate held at the MAPIC conference in Cannes today.
The panel, which included Ryan Patel, vice president of global business and real estate development at Pinkberry; Alan Shaw, vice president of real estate leasing and development at Sears Holdings; and David Scurlock, principal at Callison, debated the key points of entry to the US market for overseas retailers.
They suggested that a flagship store in New York city was not always the best point of entry.
Shaw singled out Primark, which has cut a deal with Sears to lease space across seven of its sites, as an example of an international retailer choosing not to debut in New York.
He said: “Primark is going straight into the malls as that is where Americans shop. Uniqlo spent a lot of money opening in New York but it may never be profitable in that store. Could it have taken that capital and opened up lots of stores across the US?”
He added: “If you want to appeal to the US shopper, open in the malls.”
Top level rents in New York have more than doubled over the past few years from $2,000 (£1,275) per sq ft pa for the top space in 2012 to a high of more than $4,000 per sq ft pa this year.
Others in the panel claimed that from a marketing perspective New York was the place to debut as it offered more than just a store. It provided a billboard effect that could not be discounted, despite the physical cost of leasing a store.
Wherever new entrants chose to open in America, the panel said it was vital that they did their homework.
“There have been many failed European retailers that have come to the US thinking they understand the US consumer, but they don’t,” said Shaw.
Scurlock agreed: “You have to understand the consumer and translate your brand to a highly evolved consumer. Make sure you have a clear strategy about how you are going to enter and expand in the market.”
But with every mall across the US having 90% of the same tenant mix, the panellists said there was plenty of opportunity for diversification and urged any newcomer to maintain their brand and not to become “Americanised”.
