UK fashion brands and retailers are eager to establish British style Stateside, and with the world’s number one economy and a vast population of 304 million where the appetite for shopping is voracious, it’s hardly a surprise.
Every American spent an average of $910 (£597) on clothes in 2011 - 62 garments per head - according to the American Apparel and Footwear Association (AAFA), and compared with emerging economies, exporting here is relatively straightforward. The World Bank’s Doing Business guide ranks the US as number three in the world for ease of business.
The US has a strong infrastructure of government agencies and non-profit organisations that can help international businesses get started in exporting, notes DHL Express direct sales director Sue Perry Whitehead. “The vast number of bilateral chambers of commerce and other business organisations can give help, insight and region-specific contacts. Trade regulations are not onerous, making market entry
The US certainly isn’t a high growth market but the economy is performing better than the UK at present, says Jonathan Coates, relationship director for fashion, retail and wholesale at Natwest/RBS. “British apparel brands really appeal to consumers in the US, and we are advising fashion SMEs to enter the market, particularly those that have concessions in London department stores, already popular with American tourists. We recommend entering in a controlled, sensible way. Don’t try too much at once.”
Mintel’s figures show that clothing value growth in the US was down 3.9% in 2011 but managed a healthy 4.9% growth last year. For 2013, the value growth is predicted to be 0.4%, followed by 3.6% in 2014. It’s a mature market - newcomers will be up against homegrown brands such as Gap, Ralph Lauren, Tommy Hilfiger, Calvin
Klein and Abercrombie & Fitch.
However, international brands are making headway. Opening flagship stores, backed up with an online offering, is proving to be a winning formula in the US for Zara, which now has about 50 US stores. “H&M has also been steadily opening stores, but its lack of a robust online operation has hampered its growth,” says Isabel Cavill, senior retail analyst at Planet Retail.
From the UK, Burberry, Ted Baker, Net-a-Porter and Asos are already star performers. Topshop/Topman has standalone stores in New York, Chicago, Las Vegas and LA.
With a big PR push, Sir Philip Green opened the 30,000 sq ft LA flagship in a prestigious site this February, hoping to replicate the Brit buzz seen in New York.
Younger, affluent US customers are warming to Jack Wills, and premium retailers that represent Britishness have made inroads in the 30-plus age bracket - for instance, Thomas Pink took the department store route, and Jigsaw has four standalone stores in California, and recently began to manufacture its Green Label collection locally.
Concessions in the big department stores provide a low-cost, low-risk market entry strategy, says Cavill, who notes that upmarket store groups Bloomingdale’s, Saks, Macy’s and Neiman Marcus are performing well, despite the recession. British names can get in on the act too - Karen Millen has concessions in Bloomingdale’s in New York, and Topshop is represented in 14 Nordstrom stores with plans to extend the partnership further.
However, directly-owned stores are preferred by UK brands planning a big presence and wanting firm control of merchandising and marketing. The likes of Ted Baker, Topshop, SuperGroup and All Saints have all benefited from opening high-impact flagships in New York and LA, which include a multichannel proposition.
The US has about 250 million internet users, and service expectations are high.
Asos had a 54% year-on-year increase in US sales for the first half of 2012/13. Jon Kamaluddin, international director at Asos, says it has worked hard to improve the outbound shipping proposition for US customers. “For example, we have reduced our delivery lead times in the US by two days on our standard service and by one day on our Express service, and enhanced our customer experience through offering fully tracked delivery services,” he says. “A key part of retaining customers is ensuring the returns process is as smooth as possible. We process returns locally in the US - one of our biggest markets outside of the UK - to ensure customers receive their refund as quickly as possible and the service is as cheap as possible.”
When it comes to delivering online purchases, many European retailers forget the tremendous distance between two of the most populous areas in the US - New York on the east coast and Los Angeles and San Francisco on the west coast. “This distance adds many layers of complexity to providing competitively fast delivery speeds without breaking the bank,” says Al Sambar, retail strategist at Kurt Salmon.
When it comes to bricks and mortar, not every international retailer sails effortlessly into the US, says Cavill.
“US consumers can be conservative in their taste for clothing, so location is very important,” she says. “For instance, Uniqlo failed to make a go of it initially because the brand opened in lesser malls, where there is often
real caution around new styles. Now Uniqlo is taking a different approach - building up a presence in the big cities - which is working better.”
With a flagship in SoHo and stores in the contrasting East and West Villages, Odin has its fashion fingers in many pies. It offers a mix of menswear labels, from Thom Browne to Common Projects via Canada Goose, Junya Watanabe and Master-Piece.
Exclusive products, top-notch service, smart but welcoming interiors and innovative brand collaborations make this retailer one not to miss.