Going Global – Understanding the American Shopper

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Inside the Instagram mirrored tunnel at Samsung 837 in Manhattan.

“Customers may forget what you said but they’ll never forget how you made them feel.”

The political outlook may be uncertain, but there’s no doubting that America holds a broad range of the most innovative and exciting retail concepts in the world. New York City for example, with a population the size of Sydney and Melbourne put together at 8.4 million, has endless different neighbourhoods, communities and consequently retail markets, allowing individual retailers to find their niche and offer unique and tailored retail offerings.

Yes, Fifth Avenue is renowned as the iconic shopping destination, but for the retail enthusiasts among us it’s the smaller neighbourhoods of Greenwich Village, Soho and Bowery where the real retail gems are found.

Next January we are excited to be taking some of our clients and colleagues to the NRF Big Show in New York, which will include exclusive retail tours with our American partners around ‘the big apple’ to gain some detailed insights into the American market.

Many clients approach us to discuss international expansion, with the UK and USA as obvious markets for expansion due to our commonalities, however our London partners recently highlighted some of the challenges their clients have faced in adapting to local consumer demands when expanding to America, which we thought we’d share with you in this week’s column.

So, what are some of the key characteristics of American shoppers that we should be aware of?

Addicted to discounts: During the 2008 financial crisis, American retailers miscalculated the length of the recession. Consequently, inventory levels were not adjusted to what became “new normal” spending, leading to intense and continuous discounting across the sector. Americans are now trained to buy on discount and feel proud when they secure a bargain, as opposed to British or Australian consumers who may devalue a discounted brand. Widespread discounting has become the norm in the US, as opposed to limited but deep discounting in Australia at end of season discount cycles. Last month, J. Crew offered 40 per cent off across its entire store.

American consumers also like to be rewarded for their loyalty through the usage of coupons and retailer branded credit cards. Macy’s department store is perpetually decorated in a sea of red discount signs, not only offering a general percentage discount, but an additional 20 per cent off to loyal customers using their Macy’s branded credit card.

Top-notch customer service: Americans are used to interacting with cheerful and helpful sales staff and expect to be waited on hand and foot. In comparison, Australian consumers may shy away from such intense interaction with sales staff. Furthermore, consumers in the US require lengthy return periods, with some retailers offering up to six month return policies.

Wide-spread diversity: The size of the US means style preferences and weather differ by area, requiring regional inventory management. While seasonal promotions are run on a national basis, such as Labor Day or July 4th Black Friday, the launching of seasonal collections differs according to local weather. Even sizing offerings are taken into consideration, according to local demographics. For example, in Florida, stores in areas with greater densities of retirees tend to carry larger sizes to cater to the older generation.

The US is one of the most important markets to succeed in, not only because of its sheer size but also because the stamp of approval from American consumers can be leveraged to convince other markets of the quality of a brand.

Brian Walker is founder and CEO of Retail Doctor Group and can be contacted on (02) 9460 2882 or brian@retaildoctor.com.auVikki Weston, co-author of this column, is part of Retail Doctor Group’s Retail Insights team and can be contacted via email at vikki@retaildoctor.com.au.

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