Last week’s post ended with a note about the apparent incidence of British brands in the US, and vice-versa. Any transatlantic traveller with experience of both countries will be able to tell you that the balance isn’t in the UK’s favour. Observing this set SwelledHead thinking about why this should be and, more importantly, what can be done about it.
Transatlantic brands
You might well say that it’s only to be expected that the US will have more international brands than the UK; the population is greater by 235 million after all. Fair point, but in a nation as subliminally anglophile as the US (and it’s my American colleagues that say this is so) one might expect UK brands to gain a higher profile than those of other foreign nations. My unscientific evidence is that they don’t.
Why is this the case? Well consider the size of the US market - it's enormous, not just in terms of population but also in spending power. The scope for growth within the US means that by the time it becomes necessary to look beyond, the business is likely to be large and well-resourced. That lowers the hurdles for trying things out in another country. Take the recent opening of Brooks Brothers in London. If for some reason things don’t work out, the $1.4 billion parent company (Retail Brand Alliance) can stand the loss of a few million.
For European companies entering foreign markets, the hurdles are set much higher. Home markets are smaller, so although the need to expand overseas comes sooner, the company has fewer resources available to accomplish this. The loss of a few million will be felt much more keenly, perhaps so much so that it’s not worth the risk. Get it wrong and it could damage the whole business.
Friends at the New York office of UK Trade & Investment, the British Government’s agency to promote international commerce, confirmed that the picture painted here is generally the case. So, what can SwelledHead do about it?
Anglophile
Imagine a showcase store featuring six to eight brands of distinctive British goods. It could be all manner of items, such as clothing, shoes and accessories, fine or speciality foods, technology, or toys and games. The brands would each have a share of the floor and wall space in the store and assistance would be provided by well-trained staff that work across all the brands, though individual brands could install a specialist if they wished.
Sited in a busy, upscale shopping location, Anglophile would enable each brand to gain a US presence that tests the reaction of American consumers to its products in a way that no amount of surveys could ever reveal. However, and this is the important bit, the cost of the presence would be massively less than attempting to go it alone.
Could such a scheme lower the hurdles enough to enable British brands with ambition but limited resources to have a crack at the US market? I think it could, though it would be best for brands taking part to regard it as the acid test in market research, rather than a revenue raiser. Breaking even on such a venture should be the only financial goal. The real prize is gaining the proof that the brand will sell to US consumers – that knowledge is worth a fortune.
