10 golden rules for entering a new retail market
Avoiding the pitfalls of launching your retail brand in a new market
More than ever before, retailers are looking to take advantage of hot markets and growth opportunities around the world, developing their businesses by opening new stores and outlets. More often than not, however, we see retailers race for market share, attempting to beat the competition, but falling because they don’t have appropriate plans in place.
So why is this the case? Without a specific, thoroughly-planned approach, no amount of speed will lead to success when trying to crack a new retail market. The ability to mobilize quickly is important, but a high quality program needs to be in place to really be successful. So how can retailers mobilize both quickly and effectively?
To be successful in a new retail market, there are ten rules that should be followed:
1. Establish a strong concept retail store: If nobody knows who you are, why will they choose to buy from you, with so many other options available? It is critical to build awareness of your brand and create excitement around it in the new market. A concept store showcases your brand superbly yet also enables you to tell your brand story and create a dialogue with your potential customers. Investing not just in the concept but the ideal location is therefore crucial.
2. Location, location, location: It’s true that the best retail sites are often the most costly to secure, but not always. Make sure you do your homework and look beyond the sales pattern of those trying to get you to sign a lease. The right location could be anywhere so be well researched and able to move quickly.
3. Think local, act international: The benefits of being an international brand are clear, but adapting your approach to each individual market is vital. While maintaining your international business knowhow, be prepared to modify your approach locally and blend the best of both worlds. This will help you to integrate into the local market quicker and more effectively.
4. No shortcuts – be fully licensed and legal: Taking regulatory shortcuts and a general ignorance of local trading laws cost many retailers dearly. Compliance is king, so seeking proper advice, as early as possible, is fundamental.
5. Maintain independence: Two can sometimes be a crowd. Entering into a local partnership can end up costly in the long-run if the move to a new market is a success. Although slightly more risky, it’s better to be in complete control. If a local partner is your only option, make sure you can exit the arrangement easily.
6. Get your supply chain set up right: Failing to properly organize logistics costs businesses millions every year that can so easily be avoided. Sourcing the right local supply chain who deliver on time, have ethical standards and provide good quality is essential. This will resolve local import and licensing issues from the outset, meaning you’ll spend less in the long-run and provide your new customers with the goods they want, when they want them.
7. Protect your IP: Many retailers have fallen foul of not properly registering and protecting their intellectual property. There have been plenty of unsuccessful and costly legal battles against local companies registering well known trademarks and IP around the world. Make sure you get the paperwork done well in advance.
8. Take your time and plan ahead: As with any business decision, patience is key. Rushing to access a specific market means inevitable corners are cut, creating issues that are easily and best avoided if proper planning is in place.
9. Present your best sellers: If it’s popular in other markets, people are more likely to buy it in a new location. Retailers that go straight in with their entire range can over expose themselves. You will achieve better results and faster by introducing your flagship products into the market first and building your range from there.
10. Measure and adjust: As with any business, having a clear strategic business plan is important and constantly monitoring your goals against your objectives is key. All too many retailers enter new markets with a ‘hot and hope’ attitude which, inevitably, leads to problems. Once you are comfortably underway you can start to focus on driving efficiencies as you expand. Lastly, consider engaging an experienced professional to help guide you through the process and develop an approach that is right for your brand. The price of failure is simply too significant not just financially but a loss of local jobs that you had created and potentially negative publicity for your brand.
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