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British Retailers Can’t Crack U.S Markets

British retailers struggle to find success across the pond. Read all about it here.

Primark New Campaign

Source: Primark

In April, British retailer Primark had announced its plans of opening stores in the U.S, most of which was received with mixed feelings from retail analysts and industry observers. With the events of Rana Plaza still of a concern, it was more questionable whether or not the high street retailer would actually be successful in the U.S markets as compared to some of its neighbours.

With Tesco‘s Fresh & Easy chain stores that appeared in California, Arizona and Nevada during the recession, only to be sold to billionaire Ron Burkle‘s Yucaipa Companies at the end of 2013 after losing billions of dollars, and not forgetting Sainsbury which sold their Shaw grocery stores in 2004, it can be concluded that many of the British chains haven’t had much luck.

However success seems faithful to the more fashion-specific British retailers. Reiss, which is a favourite of the Duchess of Cambridge Kate Middleton, had first landed in New York back in 2005, and has since been able to open five stand alone stores and multiple concessions in Bloomingdale‘s locations all over the U.S. Another popular retailer, Karen Millen, opened its first New York flagship store in 2008 and now boasts stores from Chicago to San Francisco – according to the company, 65 percent of sales now come from outside Britain.

Topshop seems to be the exception, as owner Sir Philip Green will be seeing a total of a billion dollars in U.S sales come 2018; despite its slow expansion plans as compared to fast-fashion, non-British competitors H&M and Zara.

The big question is; why is it so hard to be successful in the U.S? The chairman of Douglas Elliman‘s retail group, Faith Hope Consolo said; “The U.S is a huge market by any measurement, and to get traction and a national name, generally you have to open a lot of stores.” 

The retail group is has been responsible for helping bring stores such as Jimmy Choo, Paul Smith and Burberry from the U.K to the U.S, as well as other overseas retailer. “It’s not financially viable otherwise for any but the top luxury retailers, or those with a cool factor like Topshop,” said Consolo.

In the U.S each city has its own vibe and feel to it which has made catering for each city very difficult. Whereas, in the U.K the weather is same all over. Despite weather having a lot of influence over the retailers, tastes and style differ, just as they do amongst the European countries.

Consolo has said; “A lot of it comes down to not doing enough detailed research. Some British retailers think that the UK and U.S are more similar than they really are. Measurements are different in the U.S. We like packages bigger, beverages colder. We shop for groceries weekly rather than daily because we have big cars/ We have set seasons for shopping based around national holidays; Black Friday, Memorial Day sales, etc. Yet  market research doesn’t seem to take that into account.”

An important factor is pricing, and often becomes much of challenge. Creative director for menswear and lifestyle at Fashion Snoops, Michael Fisher said; “Many UK-based retailers come with a hefty mark-up because of the cost of importing goods. Fashion Snoops which is a New York-based trend forecasting and advisory firm have also stated that this problem was also faced by Topshop, and even J.Crew and Forever 21 when they launched in the UK.

“When Topshop first entered the country, the virtual doubling of the price from what a garment would have retailed back in the UK could have easily taken the brand from fast-fashion value to a slightly more expensive contemporary level. I think that’s still an issue for them to this day.”

However it seems the biggest problem that retailers are facing is actually weak messaging. E-commerce sites like Net-a-Porter and ASOS which are both based in London; have come out triumphant in the U.S. It resonates here, that these companies spend a lot of money on both online and offline marketing – which gives it a competitive edge. Consolo said; “Social media is more important than ever before to build brand awareness, that’s key if you’re appealing to a young demographic, as Topshop does.” 

Fisher also states that; “American consumers, more than any others, are very set on routine when it comes to their shopping habits. While urban consumers are more likely to try out a new shop, many of the other markets around the country are hesitant to try new things.”

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