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Unformatted text preview: 13 Deloitte Research Revisiting retail globalization Revisiting retail globalization A Deloitte Research Global Retail Study 1 Deloitte Research Revisiting retail globalization Revisiting retail globalization In the year 1298, the Venetian navy was defeated in battle by the navy of Genoa. One of the Venetian commanders committed suicide in disgrace. He is long forgotten. Another surrendered calmly and lived to write about his experience and much else. His name was Marco Polo. The importance of Polo was his ability to observe and learn from experience the experience of defeat, and especially the experience of entirely alien cultures. This is a lesson of importance to retailers interested in being global companies. For if we know anything about this topic, it is that much is to be learned from failure and much is to be learned from observing the unfamiliar. Plenty of retailers have failed in globalizing, and many have succeeded. In the spirit of Marco Polo, this essay offers some lessons learned from both experiences. Why think about this now? At a time when the global economy faces unprecedented uncertainty, when U.S. retail sales are falling, when Europes economy is on the verge of recession, and when the big emerging markets are showing signs of signifi cant slowdown and fi nancial risk, now does not seem the best time to discuss retail globalization. Yet, whatever economic doldrums retailers fi nd themselves in, the reality is that economic growth will eventually return and surviving retailers will need to seek new arenas for expanding. Home markets for developed country retailers are going to be slow growing, saturated, and prone to excessive regulatory interference. To achieve rapid growth, successful retailers will be wise to seek out new territories. What better time to think about the dawn than when things are darkest? Of course, weve been down this road before. Indeed, Deloitte itself wrote about the imminent globalization of retailing several years ago. And while many retailers have taken their stores on the road, the industry remains far less global than many comparable consumer-oriented businesses. Think about the leading companies in consumer products, hospitality, food service, telecommunications, and entertainment. These industries are far more global than retailing, with the leading players achieving a much higher share of revenue and profi ts from outside their home markets than is true of retailing. What went wrong? Why have so many retailers failed to go, much less succeed, outside their home markets? The answer is that retailing is a uniquely complicated business. It is the industry that maintains the closest and most personal relationship with consumers, often intersecting their lives on a weekly and even daily basis....
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This note was uploaded on 04/05/2011 for the course BUSINESS 404 taught by Professor Kast during the Spring '11 term at Wilfred Laurier University .
- Spring '11