With rising store closures, inflation and growing unemployment, consumer spending is under watch. Yet, despite these economic challenges, retail consumer spending—adjusted for inflation—increased 2.4% in the first half of the year, and Coresight Research forecasts that retail sales will remain strong over the next 12 months.
Amidst this volatility and a tight real estate market, retail shopping destinations need fresh concepts and innovative product offerings to drive traffic, extend duration of stay and encourage repeat visits. Landlords are increasingly turning to international brands to add the spice and sizzle needed to transform the U.S. retail landscape, creating a new atmosphere that complements the offerings of existing U.S. retailers.
International brands, with their cutting-edge designs, products and concepts are not only differentiating retail spaces, but also offering a gateway to explore and experience new cultures. For landlords, introducing these brands differentiates their assets from the competition and builds compelling co-tenancies with existing U.S. retailers. For the international brands themselves, entering the U.S. market can drive tremendous growth and balance economic challenges by opening doors to a diverse consumer base in one of the largest retail markets in the world. This expansion can also create new economies of scale, influencing production and supply chain efficiencies.
While international brands are not new to the U.S. market, their significance has grown in recent years. From urban corridors to traditional malls and outdoor centers, a diverse range of brands are expanding their portfolios and injecting excitement into retail real estate. Iconic brands such as Prada and Kering are making bold moves by acquiring permanent locations on Fifth Avenue, while Diptyque, Swarovski and Hoka have introduced flagship stores. Unexpected names like Miniso, GU and H&M are reaching new consumers on the vibrant streets of Soho. Rodeo Drive features some of the most exciting international brands with impressive flagship locations from CHANEL, Balenciaga, Kith and Valmont.
Traditional malls are also benefiting, thanks to an influx of international brands lighting up the corridors of these tried-and-true shopping venues, such as Zara, Aritzia, Khaadi, Lululemon, Primark and Uniqlo. Sephora has more than 700 stores in the U.S. and, according to Forbes, Mango has set its sights on making the U.S. one of its top markets. Triple Five’s American Dream, located in Northern New Jersey, is a great example of combining American retailers and new international brands to create a unique shopping destination.
Sandi Danick, American Dream’s Senior Vice President, Head of Leasing, shares, “With visitors from 150 countries and all 50 states each year, our retail collection offers something for everyone.” The breadth of retail spans from Zara and H&M to renowned European luxury brands like Balenciaga, Gucci and Hermès, and extends to Asian brands such as HMart, Miniso and Bandai Namco. American Dream has become home to flagship locations, engaging global stores and exclusive boutiques.
International restaurant brands are also playing a critical role in elevating shopping destinations. Brands including Beefbar, Matsuhisa and Zuma provide memorable dining experiences that encourage longer stays, repeat visits and increased revenue. Elevated food halls featuring international cuisine, such as Korean and Peruvian, are reinvigorating traditional malls. These food halls create vibrant hubs that seamlessly blend shopping and dining to captivate visitors.
Entering the U.S. market, however, is complex and new brands must navigate competitive landscapes, rising construction and labor costs, and the nuances of market entry strategies. Success requires a well-planned approach, including considerations for market entry and expansion, store size, co-tenancy, competitor insights and infrastructure to support a seamless e-commerce integration. Landlords and brands must partner together to engage U.S. consumers and capitalize on shopping habits and patterns. Leveraging local market expertise, along with data and analytics, provides critical insights into customer demographics, trade areas and consumer preferences. Offering pop-up spaces can help brands test assumptions before committing to a permanent space, ensuring a successful launch.
The infusion of international brands into the U.S. market is more than just a trend—it’s a transformation. These brands are bringing new spark to urban corridors and establishing new reasons for visiting traditional malls. Embracing these brands allows for the creation of retail spaces that attract and retain consumers while driving sales and positioning for long-term and success in an ever-evolving industry.