Opinion Piece by Andrew Buxton, CEO eStar
Major expansion in retail means acquiring new customers. In simple terms that is done either through the expansion of products, services, or brands offered, or by expanding into new markets. Traditional market expansion has been through adding more physical retail stores.
Traditional store growth for retail chains in New Zealand, with our small population of 4.5 million, usually reaches saturation at about 50-70 stores for most brands. For successful retail brands the next step is to look overseas. While there are many retail examples of international store expansion, such as Pumpkin Patch, Kathmandu or Rodd & Gunn, many have struggled to make such international expansion a financial success. Expansion through physical stores has a large commitment – store leases, fit-out costs, people costs, stock holding and distribution costs in market, not to mention market entry and store promotion. It’s a big commitment with high risks.