The top cities for retail worldwide are…
Cross-border expansion is on the rise and an extensive new study from JLL identifies the top 50 major cities worldwide that offer the top growth prospects.
JLL’s new Destination Retail report looks at the top cities worldwide for mainstream, premium and luxury retailers’ expansion plans. While the list is dominated by cities in Asia Pacific, those in the Middle East are coming on strong, propelled by an ever-increasing array of international retailers. In a battle between historic, established markets versus modern newcomers, JLL indexed the global cross-border retailer activity and attractiveness of the top 50 cities after examining 240 international retail brands and 140 cities.
“Structural change is sweeping the retail industry as technology and e-commerce platforms become more sophisticated; however, demand for the right physical space, in the right location, is stronger than ever,” said James Brown, Director of Global Retail Research for JLL, a professional services and investment management firm. “Borders are becoming less of an issue for retailers pursuing opportunities overseas and we’re seeing the global retail landscape shifting fast to accommodate the change.”
Among the key findings were:
U.S: While the Americas region only captures one-quarter of the top 50 cities for attractiveness, 15 out of the 16 cities identified are located in one country, the United States. The U.S. has more retail space than any other country with 12.8 billion square feet, and presents retailers with several options for entry, either in malls, shopping centers, power centers or general retail space. While the U.S. remains one of the most advanced retail markets globally, with significant amounts of retail spend, the market overall is daunting to international retailers. The portal cities of New York, San Francisco, Miami, Chicago and Los Angeles remain robust with global brands, but the 137 remaining key markets are largely untapped by international retailers, according to JLL.
“Expansion into new markets is catching on quicker than ever, but not without risk. International retailers that are focused on measured and balanced growth will find that the world’s mega-retail cities are a productive opportunity,” said David Zoba, chairman of JLL’s Global Retail Leasing Board.
Europe: London has the highest presence of international retailers compared to its global peers, and edges out Hong Kong in terms of international luxury brand presence. London continues to be a magnet for new brands thanks to its unique blend of market size, maturity and high degree of transparency. The U.K. capital has a long history of success, driven by a diverse base of locals and tourists, and many retailers regard London as the entry point to Europe, including recent entrants J.Crew, Arc'teryx, Club Monaco, Kit and Ace, and John Varvatos.
The Middle East: The Middle East’s top cities, including Dubai, Kuwait City, Abu Dhabi, Jeddah and Riyadh are emerging as business and travel hubs, and are increasingly catching the eye of global retail brands. The cities’ strong in-place tourism plays an important role in increasing the flow of foreign money, a key driver for retail spend. The markets each have large quantities of affordable retail space, supported by franchise structures, which present viable options for international retailers and reduce their operational risk at entry. Additionally, the domestic retail market in the Middle East is not as mature as other regions, allowing international brands to enter without too much competition from domestic brands. JLL’s report found that pent up shopping demand across the region has spurred some of the highest sales volumes for retailers.
Asia Pacific: With its leading cities’ sheer market size, Asia Pacific is one of the most compelling drivers for retailers’ expansion into the region. Many Asian markets benefit from a burgeoning middle class and growing levels of affluence, which are attractive in particular to a wide-range of retailers. The cities also benefit from large amounts of new, fit-for-purpose modern retail space. Hong Kong remains Asia’s leading shopping destination, with top brands from luxury to fast fashion competing for prime locations. Across the region, cities are catching up to modern retail markets in Europe and the United States. China is the second largest economy in the world, and its key cities, Shanghai and Beijing, have undergone a transformation in the last two decades driven by a swelling middle class and high concentration of high-net-worth individuals. Both are now firmly on international retailers’ maps as key locales for tremendous brand exposure and test markets. Key cities outside of Greater China that are also gaining attention from international retailers include Tokyo, Singapore, Seoul, Osaka and Bangkok.
To learn more, register to receive JLL’s full Destination Global Report by clicking here.
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Report: Lowe’s visualizes success with younger consumers
As more members of the millennial generation reach the age where they start settling down and buying homes, Lowe’s wants to be sure it reaches them in a format they find relevant.
According to the Wall Street Journal, Lowe’s is partnering with both Snapchat and Facebook to launch a social media campaign that relies on video to deliver the message that the home improvement retailer is there to serve new young homeowners. Working with the advertising agency BBDO (a division of Omnicom), Lowe’s has created a new series of Snapchat videos called “In-a-Snap.”
In-a-Snap features short interactive videos that allow consumers to follow along with home improvement projects and tap the screen to complete specific tasks, such as hammering a nail. Lowe’s is also releasing mobile videos on Facebook and Instagram that enable users to switch between two versions of live-action re-enactments of projects. The “Flipside” videos show one version going correctly and one running into trouble, and link back to the retailer’s e-commerce site.
Lowe’s has previously launched social campaigns based on video, including a series of Vine videos launched in 2013 and also videos deployed on Instagram in 2014. However, its latest video-based social promotions are another sign the retailer is seriously targeting a younger, tech-savvy demographic with leading-edge interactive technology.
The retailer, which operates a proprietary innovation lab, is partnering with Microsoft to let shoppers use Microsoft HoloLens augmented reality headsets to view 3-D representations of kitchen remodel design elements in store showrooms. In January, the company announced it was developing an app for the new Project Tango virtual reality (VR) mobile platform.
And in October 2015, Lowe’s released an upgraded version of its Holoroom VR design and visualization tool that leverages Oculus Rift optic technology in stores and Google Cardboard viewers that consumers can take home.
Lowe’s may not have the most hip brand image, but clearly is trying to change its reputation while also giving customers a better view of how their projects will proceed and look when completed.