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David Birnbrey, The Shopping Center Group
David Firestein, The Shopping Center GroupWith so much discussion this election year about whether international trade is good or bad, from a retail perspective it’s been a win/win for decades—American companies going overseas for growth, international brands eyeing the U.S. market for access. Consumers everywhere are enjoying the opportunity to buy products from around the world, and we don’t think that changes with Trump as president.
That’s a key reason why we at The Shopping Center Group have been retooling how we support our clients—retailers, restauranteurs, landlords, and developers. We realized that thinking globally by acting locally now means knowing the retail streets in London as well as we know the neighborhoods in our home towns of New York (where our Urban Street Division, SCG-Retail is located), or Atlanta, where the parent company, The Shopping Center Group is headquartered.
We have recently launched The Global Retail Group with Nash Bond, one of the UK’s leading brokerages, toward our continued effort to better serve our clients who are telling us that they must look to international markets, as much for future growth, as to keep abreast of global trends.
To put this in context, it’s helpful to look back at how we got here. Back in the ‘70s, European retailers operating in the U.S. were predominately luxury brand names like Chanel, Prada and Gucci, each who thrived here. In the ‘80s, international discount brands made their move to the U.S. Swedish furniture retailer Ikea and Spanish apparel discounter Zara are just two examples of companies who entered the U.S. with a great deal of fanfare and success.
In the 21st Century, we’ve seen steady flow of international brand entries into the U.S., from luxury down through to the value end of the spectrum. Most have chosen to locate their flagship locations in gateway U.S. cities such as New York Washington, D.C., Miami, and Los Angeles, with subsequent expansion into the country’s other largest cities. Examples include the UK’s Top Shop, Germany’s Addidas, Sweden’s H&M, Korea’s Samsung and Japan’s Uniqlo. American shoppers simply can’t get enough of these unique retail experiences.
The international market has provided ample opportunity for American brands too. Fast food stalwarts like KFC and McDonald’s have done incredibly well overseas for many years, including success in China. Iconic American brands such as Levi’s and Nike, do great almost everywhere they open. In addition, discounters such as Wal-Mart and TK Maxx (the European brand operated by U.S. based T.J. Maxx) have operated successfully in Europe for years. Today, Starbucks is in 70 countries and Apple is probably the most sought after retail store in the world, operating in 39 countries online, 18 of which have physical stores.
This two-way flow: American expansion overseas and international retailers coming here, benefits consumers everywhere. It also creates opportunity for the entire real estate eco-system from construction to the downstream suppliers, bankers, lawyers, brokers, and of course the millions of people who work in the stores.
But there’s something fundamentally different these days driving international expansion–the Internet. Through the “world wide” web, brands such as Warby Parker can become global before they even open a single store. In this age of big data, retailers know more about an area before they enter than ever before. As such, it is no surprise to see Amazon opening a handful of bricks and mortar stores with deep knowledge of their customer’s buying habits before a store even makes their first sale.
As brokers, we need to be better at our game as well.
The flow of information is also affecting consumer behavior and shopping habits. With more pricing and product transparency available through the Internet, people know more about brands before a store opens than ever before. The brands’ website is only one source of information, and often not the most influential. Today millennials are finding out about brands from their friends via social media. Facebook, Twitter, and SnapChat are global platforms propelling brands across borders in ways we’ve never seen before. Millennials watch YouTube videos, respond favorably to celebrity endorsements. Even ad sponsored content, if relevant and credible, garners huge numbers of ‘likes’ in social feeds, not to mention a great deal of purchasing too.
These are the compelling reasons driving The Shopping Center Group’s investment in improved information technology capabilities. We are diligently working on better ways to blend big data with our “boots on the ground” intelligence.
That’s what drove us to co-found The Global Retail Group with Nash Bond, a first step toward creating a global network of privately held commercial real estate services firms to better meet the demands and expectations of brands that must think strategically at being global, but acting locally with the highest level of street intelligence possible.
Let’s face it, retail concepts are more fluid than ever. They can crop up anywhere in the world, and be in our backyard at speeds never thought possible even ten years ago. U.S. brands like Starbucks are looking toward overseas acquisitions to introduce here at home, partly to continue to grow, but also as a preemptive move to counter a similar international concept from coming here. The Italian boutique bakery and café Princi, for example, was acquired by Starbucks earlier this year as both an offensive and defensive move.
We have no doubt that as our newly founded Global Retail Group grows, we will need to continue to adapt to how these trends evolve. The only thing we know for sure is that brands will continue their global reach, which means we will keep expanding our world-wide capabilities too.
David Birnbrey is chairman and co-CEO and David Firestein is a director and managing partner, The Shopping Center Group, New York, N.Y.
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