International Retail Design Strategy
Whether your businesses are in different neighborhoods or countries, each environment often has local tastes and unique surroundings. An original store is usually designed to fit within its environment, but future locations may not have the same style. So, when expanding into new markets, should your store designs vary according to location or stay the same? The answer to this question depends on each brand, since some benefit from maintaining a consistent identity while others are better received by adapting to their local setting and building on a sense of place. Some stores use a hybrid approach too, maintaining a core identity but changing small details, or may transition from a local feel to a more global one as they become more established. The two strategies of adapting to different markets and maintaining a strong identity will be discussed below using international brands as case studies to gain insights.
Adapting Brand Identity to Suit Different Markets
While Starbucks ensures that it is recognizable everywhere, small adaptations to its retail design are usually made in different markets so that each coffeehouse fits in with its neighborhood and reflects the local surroundings. According to the store design page on starbucks.ca, their new and renovated stores use one of four themes: Heritage, Artisan, Regional Modern, or Concept. Heritage and Artisan stores retain more of the Starbucks history, expressing its “mercantile roots” or an urban market feel respectively. Concept stores allow the brand to explore new ideas, while its Regional Modern coffeehouses offer an opportunity to express the local community, with “regionally inspired furniture and culturally relevant fabrics”. These options give Starbucks a framework to adapt their stores to match with different neighborhoods and regions.
Internationally, there has been a lot of expansion by Starbucks into China recently. It is the brand’s second largest and fastest growing market, with more than 3000 stores currently in China and another 2000 expected to open by 2021. And yet, even with this growth, there still seems to be a commitment to recognizing local communities. In December 2017, Starbucks opened a 30,000 square foot Reserve Roastery store in Shanghai, about twice as large as the original in Seattle. This unique Starbucks was designed specifically for the Chinese market and will not be repeated in other locations. The concept store aims to be a destination to visit, with small batch roasts, coffee experience bars, unique beverages, a Teavana bar, Princi bakery, and even augmented reality integration.
“We open 500-plus stores a year, but to us, it’s not about 500. It’s about opening a store 500 different times because you’re in a different neighborhood and we’ve got to build that relationship with our customer.”
– Starbucks China CEO, Belinda Wong
Not adapting to local customs can be the difference between success and failure in different markets. In 2000, Starbucks quickly opened 85 locations in Australia and was not welcomed. The majority of stores were closed by 2002. Australia already had a well-established coffee culture, refined tastes, enjoyed independent cafés, and had many competitors such as Gloria Jeans and Coffee Club. The more expensive Starbucks products did not match customer expectations and the rapid expansion was seen as arrogant and invasive. Starbucks seems to have tried again in Australia starting in 2016, although this time more slowly and thoughtfully. Speaking to Australian news, Starbucks representatives said that the limited new cafés would be located where customers wanted them to be, including shopping and tourist areas. Some of these store designs show a reflection of their Australian environments with nautical themes, which show the brand’s effort into better integrating with its surroundings.
Maintaining a Unified Brand Identity
As discussed above, maintaining a strong identity regardless of location does not always work, so each market must be well-understood before expansion. Not understanding each market can result in expansion failure, as was the case for Home Depot in China where the brand’s DIY position of “You can do it. We can help.” did not match up with the Chinese culture of hiring cheap-labor contractors to do handiwork; or for Walmart in Germany, where the inefficient shopping experience annoyed German customers and smiling staff were perceived to be flirting.
If navigated carefully however, a unique identity can help attract international attention. For example, IKEA has built its brand on its Swedish origins and has had global success. While products may be slightly different to reflect local needs and customs, its store generally is not. The same big box stores with blue and yellow branding, restaurants, showrooms, floor arrows, and warehouses are nearly identical from the U.S. to Russia and China— except for language differences. Other brands such as H&M, MUJI, and Nike have had international success without changing much about their store experience.
In conclusion, each brand and market must be carefully considered on a case-by-case basis when entering a new market to ensure success. Some designs and strategies will require adaptation, while others may fit seamlessly into a new environment “as is.” This learning can be viewed positively: it shows that the world is still very diverse and is resisting total globalization but is also open to embracing international influences.