Retail start-ups urged to think global

Start-ups can respond to the arrival of foreign retail giants by taking more of a global approach to their own operations, an industry expert says, in light of a new survey by CB Richard Ellis.

In its annual retailer survey, How Global is the Business of Retail?, CBRE mapped the global footprint of 326 of the world’s top retailers and their expansion activities across 73 countries.

In 2011, the report found six new international retailers entered the Australian market, including Spanish chain Zara – in Sydney, Melbourne and Adelaide – and Britain’s Topshop in Melbourne.

Luxury and business fashion retailers were the most global in nature, according to the report, with more than 80% having a presence in all three global regions (the Americas; Europe, the Middle East and Africa; and the Asia Pacific).

Australia ranked 30^th out of the 73 countries examined for international retailer presence, attracting 28.8% of all retailers included in the study.

This was slightly up from 27.3% the previous year. Melbourne leads the capitals with 25.6% of retailers present, followed by Sydney, Brisbane, Perth and Adelaide.

According to Joshua Loudoun, CBRE regional director of retail services, Australia is in the top 10 markets that North American retailers target.

“Although historically we rarely featured on the radar of the major international retailers, more recently they’ve seen strong sales in their Australian stores,” Loudoun says.

“[This is] providing encouragement to other retailers looking to expand.”

For example, Asian retailers are less well travelled but their footprint is slowly increasing.

When they do expand into a new region, Dubai, Melbourne and Sydney are the top targets, with 22% having a presence in each of these cities.

Brian Walker, managing director of The Retail Doctor Group, believes the wave of foreign retailers descending on Australian shores is a good thing.

“It will increase the overall retail sales in the country. I think it will do it through physical and online channels,” Walker says.

“Consumers are becoming more global and Australia is still a good market relative to other markets in the world. It’s all part of the globalisation of Australia.”

Walker believes the trend provides opportunities and challenges for a lot of local retailers.

“If they’ve done [the same] display for 50,000 years and nothing changes, then certainly they’ll lose business,” he says.

“The challenge will be if they can’t reinvent or reposition themselves… Australian retailers have to start seeing Australia as a base from which to grow.”

“It depends on the sector, but bringing in products from overseas, creating categories and talking about the origin and heritage of the products [are ways in which to globalise your business].”

“Retailers can be more global in their product range and their in-store layout.”

“Also, offer different pages on your website for different customers and different products. Have multiple pages and formats that speak to a broader audience.”