Incomers – The Rise of International Brands in Australia

Australia has always attracted incomers – since the first settlers arrived, Australia’s population has been boosted by migration of those born outside our borders. Until recently though, this attraction did not extend to retailers. The geographic distance, the well-established local retail brands, and high costs formed a daunting barrier to entry.

The last three years have seen a dramatic shift in this landscape, with US, European and Japanese retailers opening flagship stores that have become shopping meccas.

H&M, Uniqlo, Forever 21, and Sephora have all opened stores in our capital cities since 2014. Marks and Spencer and Next have Australian virtual stores, with their offer of free shipping in 5 days to Australia. Check this

What is driving the change?

In part, the economic downturn in formerly buoyant markets has led to retailers having to re-assess their consumer base. The barriers to entry into Australia may appear less daunting than the reluctance or inability to spend that they are experiencing in their established markets.

I also think we can’t underestimate the effect of online shopping on the presence and awareness of overseas brands in the ANZ market. Before the explosion in online shopping, brands like Uniqlo, H&M, and Marks and Spencer were either unknown/unheard of, or were exotic stores to visit on holiday. Now that we can order form these stores online, and have the goods within days, the risk of opening a store in a ‘new’ country is vastly reduced.

Why do shoppers love these overseas brands?

Maybe it is partly the novelty of the new, but of course the thing about novelty is that it doesn’t last long, and it certainly can’t sustain a shopper’s loyalty if the rest of the offer isn’t strong.

So, it is clearly more than the appeal of the new – and in no small measure, I believe it is that many overseas retailers are further down the omnichannel path than Australian and NZ retailers. They have sophisticated and personalised cross-channel marketing strategies – shoppers love this approach and are buying big in response.

ANZ has one of the world’s highest take ups of technology, and our shoppers are very savvy, and yet ANZ retailers have lagged behind the US and Europe in terms of delivering digital shopping experiences. Meanwhile, global retailers are attracting Australian shoppers with fast shipping and tailored loyalty promotions.

How should Australian retailers respond?

What does this mean for local retailers? Is the game over – should they shut their doors and succumb to the invasion? Or is there an upside, can they take on the incomers at their own game?

There is absolutely no reason why Australian and NZ retailers can’t take on the overseas competition and be every bit as good at omnichannel engagement as they are.

With the right strategy and tools, they too can offer a seamless shopping experience in-store and online; they too can offer intimate personalisation; they too can offer loyalty programs that make their customers fall in love with them and never want to leave.

The upside of course is that if overseas retailers can sell to Australian and NZ customers online and even open stores here, then local retailers do the same and implement strategies to enter markets outside our shores. With strategies around single stock pools and centralised customer information, the miles between markets melt away.

This view is shared by Brian Walker, CEO and Founder of Retail Doctor Group, Australia’s leading retail consultancy, who says; “Moving from multi-channel to omnichannel strategies is essential for ANZ retailers who want to embrace the digitisation of the retail industry, and create strong relationships with their consumers. It is vital in order to be able to compete with the rising competition of international entrants who are gaining market share in ANZ.”

There are already success stories of Australian retailers, who are leading the charge and taking their products and brands to new markets, and plenty of opportunity for more to follow their lead.

Who knows, maybe the invasion of overseas brands will be just the push needed to take omnichannel to the next level and beat the incomers at their own game !

To discuss read more about the impact of international retailers on the ANZ market, and how to implement your Omnichannel strategy and implementation, read our research on ANZ shoppers’ omnichannel expectations here