This is a business that never met a border it not only didn’t respect, but wasn’t downright terrified of.
Think about it: Fashion stores like H&M and Zara have invaded the United States with a fervor and enthusiasm that would make George Patton jealous.
Likewise, American apparel stores like Gap, Abercrombie and Anthropology have moved into Europe and elsewhere in ever-increasing numbers.
And the big, high-falutin’ fashion houses like Louis Vuitton, Chanel and Hermes are all over the place, having conquered more countries than Napoleon.
But home stores are an entirely different matter. Sure, the American giant Bed Bath & Beyond has moved offshore, or at least crossed the border: It opened its first stores in Canada a few years ago and has a whopping two units in Mexico. (Even worse, the Mexican operation is a joint venture and hasn’t grown beyond those two stores since it launched last decade.) Europe or Asia? Way Beyond its horizon right now.
But that puts Bed Bath significantly ahead of most of the guys out there. Home Depot has six stores in China. The problem is that it entered the Chinese market in 2006 by buying a local operation that had 12 units. So, in just a few short years it had worked that down by half. Last summer it abandoned the Beijing market to focus on two other cities. Not exactly a ringing endorsement of a growth strategy.
Depot’s move came only months after Best Buy did pretty much the same thing, shutting its nine branded stores in China. Now at least Best Buy has a Plan B, having bought the local Five Star consumer electronics retailer years ago. Today Five Star is nearing 200 units and Best Buy has outlined an aggressive new store program for the future. But not under the Best Buy name.
This pattern basically repeats itself around the globe and while there are some valid reasons for the phenomenon, some of the excuses for why this is happening (or not happening, depending on your point of view) are just plain dumb.
People come in basically the same sizes around the world, even if those sizes are called by different names or numbers in different places, but for some reason, beds don’t. So if you’re trying to sell a product like sheets, every country has its own size beds, requiring suppliers to localize the assortment. That creates some enormous problems if you’re trying to take advantage of economies of scale.
There are also local peculiarities when it comes to cooking and food. Asians want rice cookers, a product you couldn’t give away in the Western world. Americans would barbecue salad if they could figure out a way to make it not stick to the grill, but many other cultures don’t adhere to the outdoor cooking principle once they put a roof over their heads.
There are different electronic systems, formats and giggawats all around the world so you can’t stock the same products at stores away from your homeland.
But it’s when you start talking about fashion and design that the conversation quickly bogs down. While there used to be wild disparities in preferences for color, pattern and motif in different parts of the world, they have largely being homogenized, thanks to a long process that began with MTV and Vogue, and is currently being Facebooked, Tweeted and YouTubed to infinity and beyond.
The assortments at stores like Zara take some local tastes into consideration, but they are remarkably the same whether you are shopping in Düsseldorf or Paramus.
The same thing is happening in home design. Paisleys are popular everywhere. If you like modern it’s clean and contemporary east, west and everywhere in between.
Pretty soon we’re going to see proof of that. Both H&M and Zara have launched home stores in Europe and at least the former says it will bring the format to the U.S. later this year, first online and conceivably in-store at some point afterwards.
H&M Home is the most unusual retailing format to come along in quite some time. The merchandise itself is true to form: young, contemporary and inexpensive as befits the store’s core customer. The soft home-dominated assortment has lots of neutrals punctuated by touches of pink, red and orange.
But it’s the merchandising that is different. At a store in Frankfurt I recently visited, merchandise is displayed on walls and vignettes much like a wholesale showroom. But there is no inventory on the floor. Instead there are small magnetic tiles arranged on hooks around the product displays. Shoppers grab a tile that has an image and details of the specific item they want and place it on a magnetic panel in the shape of a house. Once all the selections are made they are brought to the checkout desk where a clerk goes into the backroom and gets the goods.
Yes, those with long unhappy retailing memories may recall the late, unlamented catalog showroom, which had a somewhat similar convoluted checkout process. We know how well that went over with shoppers.
But this is a different time and a different customer. This consumer is used to dropping things in her Amazon basket and then checking out. Is the H&M experience any different? Maybe, maybe not.
What’s fascinating here is that somebody is trying something different, and trying it in a format that could work anywhere in the world.
So can home furnishings retailers succeed around the world? It’s a good question, the answer to which remains to be seen.
One last thing: Ignore everything you’ve just read. It’s all a bunch of crap. Ladies and gentlemen, I give you IKEA. The Swedish based company has over 300 stores around the world and does more than $20 billion a year in virtually every home furnishings classification. The 10,000 IKEA products are remarkably the same from Bayonne to Beijing. The layouts are the same. The prices are the same.
The meatballs are the same.
IKEA is the exception in that doesn’t prove the rule, it damn near blows it up. Home furnishings stores should be able to go global. Indeed they should be falling over themselves to do so.
There isn’t a reason in the world not to.