Earlier this year I gave a guest lecture for marketing students at Copenhagen Business School in Denmark. The subject was International Retailing.

I would like to share some of my key points also with you. I started the lecture by showing this clip by Hans Rosling:

The world is catching up. I can’t tell how many times I got the question from people living in the western world – Why are you going to open in that under developed country? At the same time I meet a lot of people from emerging countries – when are finally you coming to my country?

So who are the international retailers and where do they come from?

Top 10

1. Wal-Mart  USA    405.046   Food 16 countries

2. Carrefour  FRA    119.887  Food 36 countries

3 .Metro  GER    90.850  Food 33 countries

4. Tesco  UK    90.435  Food 13 countries

5. Schwarz  GER    77.221  Food 25 countries

6. Kroger  USA    76.733  Food 1 country

7 .Costco  USA    69.889  Food 9 countries

8. Aldi  GER    67.709  Food 18 countries

9. Home Depot  USA    66.716  DIY 5 countries

10. Target  USA    63.435  Dep 1 country

Turnover is in millions of US Dollars.

Retailers from the US continues to dominate the retail, both in number of companies and total retail sales volume. They stand for more than 40% of the total sales. After US comes Germany with 12% and France with 10%. Food retailers dominate and 8 /10 are in that segment.

As you can see Walmart is by far the biggest retailer in the world. They are in fact the biggest company in the world. Walmart is also a leading developer of new ways of working within retailing.

Some globalisation trends:

• The average TOP 250 retailer sells in 7.7 countries (2000 4,5).
• Many US retailers are able to be big without expanding beyond US.
• More than half of US retailers (of 84) operate only in their domestic market.
• Only 20% of the big Europeans (of 92) are single country operators.
• European retailers have more international experience because of the proximity of several neighbourhood countries.
• Spain’s Inditex has stores in 74 countries, French Carrefour 36 countries and Swedish IKEA 38 countries.

Why do so many retailers go global?

Some reasons are based on:

• Restrictions in their domestic markets
• Stagnation at home market
• Low hanging fruits in emerging countries
• Growth!

In e.g. France and Spain it is difficult to obtain retail permits to operate a big box retail store. The recession has also lead to less retail spending in Europe and US. In search of growth many retailers go to emerging countries and try to be competitive with their sophisticated retail methods in less mature markets.

What are the challenges?

• Currency fluctuations
• Reporting and tax rules
• Poor infrastructure
• Potential for sudden political change
• Uneven economic growth
• Low to medium GDP / capita
• Long distance sales and distribution processes
• Local consumer trends needs to be considered
• Barriers to entry need to be overcome
• Corruption

3 other things to consider:

1. Consumer are not playing their part

• Make conflict demands such as convenience, quality, low price and speed
• Young consumers quickly shift from one format to another

2. The competition is no longer easy to identify ez inflatables sugar shack

• Today retailers come in many diverse formats and face many non traditional competitors
• Many retailers increasingly sell large amounts of merchandise outside their core segments, thus placing themselves in a new competitive environment

3. The economic and political environment is not cooperating

• Small retailers are seeking opportunities to flex their political muscle to restrain the growth of larger more efficient retailers

The current recession has made the business environment for retailers more uncertain than before.

In this environment retailers must:

• Focus on market share.
• Add value!
• Keep costs under control.

Who is your favorite retailer? What makes them successful? Are they innovative? How is the customer experience? Let us know!