Based on headlines about the changing landscape of U.S. retail during 2017, it would be easy to reach the conclusion that Amazon has created chaos and the days of brick and mortar stores are over. The reality is that chaos creates opportunity and there are many (big) retailers that are not only surviving – they’re thriving. As such, the first strategic move brands need to make in order to see growth in 2018 is “pick a winning partner and get behind them.”
Sporting goods giant, Dick’s will open 150 stores by 2018 and general merchandise retailer Burlington has seen positive same-store sales growth since 2012; most recently with 4.5% YoY comps in 2016.
Growth for One Does Not Mean Growth for All
This is not to say that all brick and mortar retailers should (and will) be seeing growth this year. Some retail giants have made questionable decisions and overextended themselves in a difficult time (i.e. Toys “R” Us bankruptcy), but clearly Dick’s and Burlington have found a winning formula. They are proving that the strong – and smart – horses will win the race and stand the test of time in a chaotic and changing landscape.
Yes, Amazon is huge. Yes, Amazon will keep getting bigger. But the reality is that online retail accounts for only 10% of total sales in the U.S. According to a 2017 study by eMarketer, consumers still prefer to shop in-store vs. online in most categories.
Find a retail partner that has positioned itself to weather the storm, by creating a unique experience for its consumers that cannot be replicated online. Pick a winning partner and get behind them in 2018.
Think Bigger Than Your Backyard
The second strategic move brands need to make in order to see growth in 2018 is “think globally.”
For many years the U.S. has been the leading market for consumerism. We have been the single largest retail market in the world, while 95% of the population lives outside our borders. But that is about to change. The Diplomat recently reported that China is forecasted to become the largest consumer market in the world from now, until at least 2030.
China’s driving force for this growth is their sheer volume of buyers. It is estimated that by 2020 China will have 400 million “mainstream consumers”. That’s more people than the entire U.S. population - with disposable money and looking for ways to spend it.
But China isn’t the only market where brands should be focused. Increased wealth, growing eCommerce, and improved logistics networks will make markets like Europe, the Middle East, India, and South America more accessible and more enticing to U.S. brands.
Yes, you should be focused on “winning at home” with a strong strategy for the U.S., market, but there is massive opportunity outside our borders. This year, think globally and you’ll stand a better chance to see long-term growth, as well as short-term gains.
For more advice on how to design the right strategic sales plan or build your business outside the U.S., contact Castus via email (email@example.com) or contact us via our website: http://castusglobal.com/contact/