WRC 2012: Local knowledge key to international growth
The degree to which retailers tailor their offer to local markets emerged as a key theme at the Wold Retail Congress yesterday (19 September) - and it seems there are as many different strategies as there are retailers.
Abercrombie & Fitch, for instance, runs all of its operations from its headquarters in Ohio in the US, with minimal changes from market to market, according to its CFO Jonathan Ramsden.
The teen retailer believes that having a consistent offer around the world is key to its success, with the main difference in the sizing curves implemented across each country.
The company works to leverage the "iconic nature of the brand" when it enters new markets says Ramsden, ensuring that consumers in Tokyo or New York have exactly the same experience in its stores.
This strategy has seen international sales grow to account for some 30% of the total, compared to 10% just four years ago.
Ramsden said the company's approach to market entries is that "if the model doesn't work, move on". That said, to eliminate as many risks as possible it can take two years to set up operations before stepping in to a new country.
Abercrombie & Fitch's strategy is unusual, with the general consensus being for retailers to tailor their offers to the markets they are entering.
Jose Gomez, VP of business development at Spanish fashion retailer Mango, said it "never takes things for granted" when it enters new markets.
He explained the brand will customise the experience for new markets, but not "too much" to ensure it maintains its DNA.
This idea of maintaining your DNA abroad is echoed by Dow Famulak, president of LF Europe. He says that the sourcing group's branded business adapts its offer across markets, but ensures that it understands what is important to the celebrities and brands it works with and stays close to that when it enters new markets.
Henry Stupp, the CEO of Cherokee, which sells licensed products to retailers across the world, including Target Stores, Tesco, emphasises that "bilingualism is not bi-culturalism" and part of its service is to offer its retailers support and tailored local knowledge in the markets they operate in.
One thing that most retailers agree on is that the first steps into a new country have to be good, because any early missteps are hard to come back from.
"Poor localisation results not just in abandoned customers but in vanished customer loyalty, corporate reputations, disengaged distributed channels and a low chance of recovery," said Allyson Stewart-Allen, the chief executive of International Marketing Partners.
She warns retailers against underestimating the importance of applying local knowledge.
Speaking to just-style, she said executives responsible for a market need to spend at least six months living there to ensure they understand the nuances of the local culture.
Stewart-Allen says one of the main mistakes that companies make is assuming that consumers are the same everywhere, and not accounting for variations in taste and needs within a country.
"One assumption they make is that weather or regional differences aren't significant, and they really are," she sais.
Indeed, Dieter Holzer, the CEO of German retailer Tom Tailor, emphasised that there needs to be a culture of support for retailers' international operations - for instance, ensuring that if territories ask for items in different colourways that they receive them.
"You can't wait for countries to grow to give them what they need. If countries don't get what they need, they won't grow," he said.
Opportunities the apparel industry should focus on this year include developing strategic relationships to improve flexibility across the supply chain; a focus on adding value through design, innovati...
Vietnam's leading textile and garment manufacturer, Thanh Cong textile Garment Investment Trading JSC (TCM), has begun construction of new knitting plant in a bid to supply material for its own produc...
Fashion retail business French Connection Group slid to an expected full-year loss in the financial year ended 31 January, thanks to an 8% decline in revenues....
Spanish clothing retailer Mango has revealed plans to enter the children's wear and women's activewear channels. ...
Global brand management business Cherokee Inc has appointed Jason Boling as its new chief financial officer, replacing Mark DiSiena who has resigned to pursue other career opportunities....
UK retail giant Tesco has revealed plans to reshuffle its distribution network, putting up to 2,000 jobs at risk....
- Marks & Spencer to extend mobile phone monitoring
- China tightens on corporate social responsibility
- Outdoor industry's future must be more inclusive
- Factoring: a lifeline for apparel suppliers?
- Who has signed the Bangladesh safety accord?
- Adidas "Reebok sale" would be admittance of defeat
- Cambodia clothing factory collapse injures eight
- H&M and The North Face commit to responsible down
- Bangladesh taps factory inspectors ahead of review
- Coats to open new zip factory in Bangladesh
- Ethiopia – the emerging textile and clothing industry
- Apparel Market in China to 2018 - Market Size, Trends, and Forecasts
- Global market review of denim and jeanswear – forecasts to 2020
- Wool in the 21st Century: new prospects for a familiar fibre
- Prospects for the Textile and Clothing Industry in Vietnam