Does where you’re from Matter? It Does for Retailers Expanding Globally.0 Comment
More than 30 years ago a man named Tommy Hilfiger changed men’s apparel by modernizing the standard button-down shirt and chino pant into fitted and designed apparel. It hallmarked the movement of bringing classic “American cool” to the world, and today Tommy Hilfiger ranks as the top global retailer with stores in 94 percent of the top 140 cities around the world, according to JLL’s Destination Retail 2016 report. The report analyzed the top 27 most expansive and connected brands globally, and found that the top retailers come from Europe or United States including:
- Levi Strauss & Co., another quintessential U.S. brand that pioneered the blue jean more than 100 years ago, now ranks as the second world retailer with 2,800 stores in 92 percent of the top cities.
- Named for the winged goddess of victory, Nike Inc., which has been revolutionizing sports shoe and apparel since 1964 ranked the third most prevalent retailer with two distinct store concepts: Niketown and Nike’s factory stores operating in 91 percent of the top global cities.
- German retailer, Hugo Boss and Spanish retailer, Zara round out the top five retailer with 91 and 89 percent of the top global cities, respectively.
The top three worldwide retailers country of origin is the United States, and the main driver of that is American pop culture says JLL’s Retail Brokerage and Capital Markets President Naveen Jaggi. “We’re the top exporter of popular culture around the world, so when a U.S. retailer enters a new city abroad they are selling a piece of that culture to an audience that already has an appetite for it,” he adds.
While the top global brands are U.S.-based, JLL found that more than half of the top 27 retailers worldwide are of European origin. “European retailers continue to dominate the global landscape because the market is a combination of so many smaller countries, in order to grow retailers must to operate outside their boundaries,” said James Brown, Director of Global Retail Research for JLL. “We also found that U.S. retailers tend to keep close to home despite their brand strength, but we expect that them to bring the next wave of international expansion in order to grow. It’s just a matter of time before their store presence will outpace European retailers.”
Retailers new and old, mainstream and luxury are embracing global expansion as a way to grow revenues but the objectives for new stores can go way beyond just sales generation according to the report. “A new store opening is no longer about racking up sales, it can support a wider wholesale, franchise or online business and can be an offensive move to safeguard market share. Increased brand awareness in a given city can also lead to an uptick in online purchasing in the market,” added Jaggi.
During the next 10 years, JLL expects a significant change in the global retail landscape due to a fast growing middle class, new economic powerhouses, rising tourism and maturing markets. These factors will attract new ambitious retail brands into emerging cities, where the search for space will accelerate. Retailers who succeed in acquiring the right space in the right place and at the right time will benefit from successful, profitable growth.
JLL’s new report, Destination Retail 2016, examines the presence of 240 international retail brands across 140 retail cities, giving insights for international retail expansion. The 140 cities make up 36 percent of the world’s GDP, 13 percent of the global population and 33 percent of total consumer spending. In today’s increasingly global retail market, international expansion is becoming a focus for JLL retail clients, as they seek sustainable growth. To learn more, register to receive JLL’s full Destination Global Report: http://bit.ly/DestinationGlobalLandingPage