Why do some brands thrive in new markets while others fall flat?
Shopping the Globe
What We Did
We brought together retail experts from Gensler’s São Paulo, Bangalore, and Shanghai offices to gather and interpret market research in each of these cities and identify the best growth opportunities for retailers. We paired these local experts with leaders of our global retail design practice to help uncover broad insights into what makes a successful brand expansion. Our investigation focused on the automotive, banking, apparel, technology, hypermarket, and luxury retail sectors, but allowed us to document findings that could apply to all industry sectors.
Teams in each city gathered market research; investigated local consumer trends, retail prototypes, preferences, and business practices; documented common partnership models; and conducted photo surveys and interviews. Each team then presented their findings in a live, online webinar, as well as during a face-to-face client event attended by retail and retail centers clients. We also documented our work in a series of GenslerOn blog posts.
We are currently in the midst of a massive global brand migration. The shopping experiences that were once exclusive to London, Paris, New York, and Tokyo are now emerging in numerous cities around the world. The fuel of this growth lies in an expanding global middle class nearing one billion people, with the most dramatic growth concentrated in Latin America, Eastern Europe, and, in Asia alone, the middle class grew by 600% from 2000 to 2014.
The increased buying power and desire for a global class of products and experiences present significant opportunities for existing and established brands looking to expand into new markets—but growth does not come easy. As retail brands go global, they face unique opportunities and challenges in each market they enter.
Be local and contextual, but don't forget your roots. Our research underscores three basic guidelines for successful entry into any new market.
Know your audience. Formulaic store designs and merchandise strategies from a brand’s native home don’t always fly in increasingly savvy global urban markets. Understand your core customer—their preferences, behaviors, and cultural customs—and have a strategy to address those local tastes. Research-based design solutions are a must, and ensure an informed approach tailored to the products and experiences local consumers crave.
Find the right partners. In an experienced-based economy, consumers seek out the new and different, and brick-and-mortar retail stores increasingly resemble innovation labs. Brands have to be bold and address the consumer in a way that meets their unique needs, habits, and desires. This means accepting an interpretive approach, having an open dialogue with core customers, and being willing to express a global brand through a local lens.
Embrace personality and experimentation. Tackle the most fundamental of urban spaces and seek to reconsider a space defined by infrastructure and engineering requirements. Streets, parking lots, and highways are redefined as human spaces that perform on multiple levels. The goal of these teams is to encourage social, cultural, and community activities to coexist with our urban movement requirements.
What This Means
You can’t be successful in new markets if you’re not successful back at home, but that doesn’t mean delivering the same thing in every city. In the three global cities that we studied, we found unique characteristics that underscore specific opportunities in each market:
In São Paulo: Consider luxury on all levels. The young population of Brazil’s cultural capital seeks a lifestyle of wealth and wellness. Retailers should focus on delivering luxury, top-notch service, and unique social experiences with design at the core. Local business partners also prove particularly crucial to successful navigation of São Paulo’s financial and legal structure. Many global brands partner with mall operators to enter the city’s retail landscape, joining spaces that are especially popular with women for the convenience, comfort, and the security they provide.
In Shanghai: Experience and global cachet reign. Shanghai’s roots as a world-class financial hub are firmly planted thanks to more than 25 years of rapid growth. Sophisticated residents gravitate toward global brands, and seek unique and compelling experiences. Shoppers are also well-equipped and tech savvy—online shopping is skyrocketing, and stores that integrate the online world with the in-store experience, and offer opportunities to learn about new brands or products in immersive environments, are well-poised for success.
In Bangalore: Embrace the diversity of a growing consumer base. India’s rapid urbanization and changing government regulations open doors for global retailers to invest in Bangalore’s growth, and deliver new products and experiences. The social fabric of India is tightly woven and shopping is often a family activity, centered on a special event. A deep understanding of this market’s diversity— from young, tech-savvy urbanites to aspirational rural consumers—is critical to success.
Global consumer trends and hot markets continue to evolve and expand as new cities and countries enter the global retail stage and attract interest and investment. Continuing to document the unique perspectives and needs of each of these markets is imperative as brands seek to stay relevant in order to deliver both globally and locally.
We continue to gather consumer research about our clients’ customers and target markets as our project teams gain more on-the-ground experience. This knowledge infuses every client interaction and project, and informs the market and context-specific insights we deliver to clients every day.
Barry Bourbon, Virginia Sertich, Marsha Getto-Aikens, Meredith Ludlow, Smita Gupta, Diwakar Chintala, Sruthi Girish, Craig Lobo, Maureen Boyer, Thais Rosa, Richard Chang, Shawn Gong, Sahana Rajagopal, Yamini Mahajan