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Retail Business Environment

Notes 4. Favorable operating costs of labor, rents taxation etc.;
5. A geographical spread of trading risks;
6. The opportunity to innovate, in new market conditions.

3.3 Understanding International Retailing

International retailing is an essential ingredient for the global economy. International retailing
satisfies the increasingly complex and demanding needs of global consumers.
Global retailers are at the forefront of technology change to manage their operations and
consumer interface. Consumers are international in their outlook through traveling for business
through accessing the Internet, music, television and magazines, and so are looking for new
experiences and a global appeal when shopping. Progressive retailers have to meet this demand
through keeping abreast of global trends and working with suppliers to optimize the appropriate
product mix in store. Sustainability and ethical aspects of retailing are particularly apt when
working globally. This is a challenging area for retailers and is an aspect of their quality
management. Addressing the dynamics of the market for teenagers and youth market is another
demanding area. Young consumers have their own finance and make their own decisions about
what products they chose to buy and where from. They tend to be strongly influenced by
celebrities, brands and peer-group pressure. Retailers need to understand their shopping habits
and cater for the needs of this cohort. In general, consumers are increasingly brand aware and
want to have access to luxury products. Own brands, or private labels, have to offer premium
quality and a sense of uniqueness to attract and retain consumers’ loyalty.
Retailers have long operated on global basis, yet it is only since the last decade or so of the
twentieth century that they have done so on any significant scale. In the past, companies trading
outside their home market were rare by comparison with number of retailers operating solely
within the domestic market. Also global operation usually accounted for a much smaller part of
the business than domestic trade. However, the larger retail companies that have successfully
developed their marketing strategy and human resource base in the domestic market are well
suited to extend development into global markets. Other smaller players that have powerful
brand and a strong retail concept also have the ability to globalize successfully through using a
lower cost and risk strategy such as that of franchise.
Luxury goods retailers are among some of the earliest globalists, seeking to serve a similar
consumer niche in a number of cosmopolitan cities around the world. This is exemplified by
Harrods, which operated a store in Argentina in the early twentieth century in order to meet the
needs of colonial expatriates.
This is not to say that we have witnessed significant global expansion by many retailers. Even
today, it is noteworthy that many retailers remain essentially domestic operations. In addition,
many of those retailers we might perceive to be developed globalists, or indeed global operations,
receive only a minority of their turnover and profit from their operations outside the home
market.

Self Assessment

Fill in the blanks:
1. …………………. goods retailers are among some of the earliest globalists,

2. Sustainability and ethical aspects of retailing are particularly apt when working
………………...

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