MARKET INSIGHTS

Three Reasons International Brands Are Launching in the US with Leap

August 24, 2021
Three Reasons International Brands Are Launching in the US with Leap

There is no shortage of international brands making the jump into the US market. From Ganni, Byredo, Muji, Veja and Gymshark, brands and retailers from abroad are looking to grow their businesses in the US. By launching US-based ecommerce and opening up their first stores, these brands are entering the US market with a full omnichannel strategy.

Canadian brand Frank And Oak is taking advantage of the Leap Platform to open retail locations in the US market. They are launching on the Platform with a SoHo storefront. This is one of the busiest retail corridors on the planet, and these two stores mark our first foray into the neighborhood at the heart of NYC fashion.

The Leap Platform lowers the barrier to entry into US markets for international brands with turnkey opportunities. With brands like Radley London, Charlie Holiday, and mint & rose having already used Leap to open their first stores in the States, we’ve seen that there is a huge value proposition for brands looking to expand into the US market. Let’s take a look into why these brands are breaking in to this new market, and how they’re doing it with Leap.

Why Are International Brands Launching in the US?

The clearest reason for international brands’ interest in opening in the United States is scale. The US retail market represents a $4.85 trillion opportunity for retailers, which is nearly 10x the size of the Canadian market, for example. That prospect alone is enough to encourage brands to gain a foothold in the US. But there are more motives for opening a US store than market size.

If you want to be a global brand, you need to open a store in the United States. Can you name a successful, international brand that doesn’t have at least one location in the lower 48? Even if it is just a single storefront, that presence is necessary to validate their brand and capitalize on that wider awareness afforded by opening a store in this major market. When you open a store in the US, it’s one of the indisputable signs that you’ve “made it” as a brand.

What is Unique About the US Retail Market?

The US as a country is culturally unique and highly diverse. International brands will need to immerse themselves in its cultural moments to understand what resonates, from holidays to sporting events, and use their creativity to leverage these moments to build community and increase customer loyalty when entering new markets.

However, even if they can understand the US culturally, international brands quickly realize that competition is fierce and CACs are higher in the US, plus the costs to ship and return continues to rise.

One of the biggest but most subtle challenges of opening a store stateside is the difference in shopping preference and retail culture in the United States. Americans have a higher than average disposable income than the majority of shoppers from other countries, as well as a discerning eye for retail experiences.

American shoppers are service-focused, with 90% citing poor customer service as a top retail turnoff. They are also early adopters of omnichannel retail. For example, ecommerce only represents about 4.5% of total retail sales for Canadian brands, compared to 7.7% of shoppers in the US. In 2020, 20% of US shoppers tried a new digital shopping method, and 80% intend to continue. 96% of Americans shop online, but 65% of American’s shopping budget is spent in-stores.

American shoppers don’t just buy across physical and ecommerce channels out of convenience—they have a marked preference for the omnichannel shopping experience. 56% of shoppers visit a store before buying online, meaning that even if US shoppers buy on ecommerce, there’s more than a 50% chance that they are checking out those products in-store beforehand. Similarly, 55% of online shoppers prefer to buy from retailers with a brick-and-mortar presence. For brands launching in the United States, customers have come to expect and demand a unified customer journey that switches seamlessly from physical to digital channels.

Why Are Brands Opening in the US with Leap?

From establishing credibility, to creating a US based logistics hub, to lowering the customer acquisition costs, brick-and-mortar retail gives international brands a marked advantage. As these brands build their US business, the first-hand insights they gain by operating stores become even more essential.

Leap is well-suited to deploy international brands and launch omnichannel stores in the unique US market. Opening a store anywhere in the world has inherent risk, but this is doubly true for brands opening internationally. With Leap’s platform approach, international brands can enter into the US market faster and with less risk than doing so on their own.

On-the-Ground Support: Brands on the Leap Platform don’t need to rely on their own team on the ground or expensive back-and-forth flights to open a store in the US. For international brands, traveling thousands of miles, navigating different time zones, and managing cultural and language barriers poses a high barrier to entry when entering the US market. The Leap Platform gives you direct contact with teams working to find the perfect location, design your store, hire staff, build out the space—several international brands have been able to open a new store while totally remote.

Local Infrastructure: Because we have deep knowledge of and resources in every market where we operate stores, it is easier to find locations, build retail storefronts, hire staff, and reach shoppers than brands on their own. This is especially valuable for international brands, but is useful for any brand entering a new market on our platform. With a network of employees and contacts across the entire country and in key markets, international brands gain a distinct advantage when they open in the US with Leap.

Specialist Knowledge: Leap has in-market knowledge of US taxes, employment laws, payroll systems, and other specifics that normally require on-hand guidance for those who aren’t familiar with them. All of these factors make opening a US store a slow and difficult process for international brands, but are alleviated or remediated by the inherent benefits of the Leap Platform. More speed means more sales, faster, and with less investment.

Opening Your First US Store

Every brand on the Leap Platform enters their market with a beautiful, omnichannel store designed with 100% of their brand DNA. Due to our aforementioned network of shared efficiencies, we can open that retail store for 25% less than a brand doing so on their own—and for international brands, the difference is even greater. Because we take out the inherent risk of opening a new omnichannel-enabled retail store in a new market, international brands face less cost and drive higher revenue in this new, major market.

Interested in opening your first Leap-powered store in the US? Sign up for our Platform here.

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