5Qs on global expansion for Brandon Famous
Real estate services giant CBRE recently formed a committee of the leaders of its worldwide retailer representation operations to ensure consistent decision-making for chains expanding globally. Named as chairman of the committee was Americas retail leader Brandon Famous, a 30-year veteran whose insights regularly inform Chain Store Age’s real estate coverage. Our five questions for Famous had to do with U.S. chains expanding abroad.
Visit Canada and you see popular retail chains that you never see in the States. What are the three chief reasons retail chains keep it close to home?
Familiarity, manageability, and cost. You’re familiar with who your customer is. You have the experience to capably manage a store. It’s no coincidence that many retailers’ best-performing locations are in the towns where their headquarters are located. And a lot of this is a function of cost. Once retailers venture outside of their comfort zones, things get complex. Try to enter Brazil. It has double taxation—for importing goods and then for selling them. Argentina has some of the stiffest laws against retailers coming into that country.
Why are more U.S. retailers now looking farther afield?
The big difference is the data that’s available. Retailers can use data to see who the customers are in a foreign city and know that they already have a following there. The digital world has no boundaries. That’s why you have so many e-tailers finding success with brick and mortar stores.
Name two traits retail brands must possess to make it abroad?
You need to stay true to who you are, true to your DNA. And you need to understand the consumer and the culture of the market you are entering. If you don’t understand the local customer and culture, it can be devastating.
Large, enclosed malls seem to still find favor in Asia. Can you explain the phenomenon?
I give Asia credit in that the malls there are much more experiential than the malls are here today. There, when people go to the mall, it’s an all-day event. Most malls in Asia have 35 to 45 percent food and beverage, movie theaters, bowling alleys, children’s play areas. People come from long distances and plan to stay a while.
What will be very different in some of the shopping centers they encounter abroad and what will be the same?
European and Australian malls are very similar to U.S. malls. Asian malls have significantly greater food and beverage components. You’re going to find more luxury brands in the larger Asian malls, whereas in Europe you’re going to find more luxury on high street locations and not in centers. We see more international brands coming into the U.S., though, than U.S. brands going out internationally. But there is great opportunity for American brands to do so, because there is a large demand for American brands abroad.
Visit Canada and you see popular retail chains that you never see in the States. What are the three chief reasons retail chains keep it close to home?
Familiarity, manageability, and cost. You’re familiar with who your customer is. You have the experience to capably manage a store. It’s no coincidence that many retailers’ best-performing locations are in the towns where their headquarters are located. And a lot of this is a function of cost. Once retailers venture outside of their comfort zones, things get complex. Try to enter Brazil. It has double taxation—for importing goods and then for selling them. Argentina has some of the stiffest laws against retailers coming into that country.
Why are more U.S. retailers now looking farther afield?
The big difference is the data that’s available. Retailers can use data to see who the customers are in a foreign city and know that they already have a following there. The digital world has no boundaries. That’s why you have so many e-tailers finding success with brick and mortar stores.
Name two traits retail brands must possess to make it abroad?
You need to stay true to who you are, true to your DNA. And you need to understand the consumer and the culture of the market you are entering. If you don’t understand the local customer and culture, it can be devastating.
Large, enclosed malls seem to still find favor in Asia. Can you explain the phenomenon?
I give Asia credit in that the malls there are much more experiential than the malls are here today. There, when people go to the mall, it’s an all-day event. Most malls in Asia have 35 to 45 percent food and beverage, movie theaters, bowling alleys, children’s play areas. People come from long distances and plan to stay a while.
What will be very different in some of the shopping centers they encounter abroad and what will be the same?
European and Australian malls are very similar to U.S. malls. Asian malls have significantly greater food and beverage components. You’re going to find more luxury brands in the larger Asian malls, whereas in Europe you’re going to find more luxury on high street locations and not in centers. We see more international brands coming into the U.S., though, than U.S. brands going out internationally. But there is great opportunity for American brands to do so, because there is a large demand for American brands abroad.