We asked four in-market experts for their take on the prospects for local versus global brands in Australia.
- Lachlan Brahe, VP Australia, ComScore
- Justin Graham, chief strategy officer, M&C Saatchi Group, Australia
- Sam Hegg, chief strategy officer, Carat
- Marcel Wijnen, creative director, Marque Branding Consultants
How much growth opportunity is there still for global brands in Australia?
Brahe: Plenty! I feel that we’re only on the verge of embracing global brands that don’t originate from the usual suspects in Europe and the U.S. As Australia’s cultural diversity grows, so too does the opportunity for international brands. We’ve seen this in culinary markets for many years, increasingly in the automotive area and more recently in fashion.
Graham: It seems like everyone has caught on when it comes to shipping their brands Down Under.
We’ve followed Aldi’s challenging of the supermarket duopoly and welcomed the deployment of mini majors, fast-fashion alternatives and online retailers into our browsing repertoire, most notably H&M, Zara, Sephora and soon to land on our shores – Alibaba, Amazon and TJ Maxx.
The dismantling of the once predictable Australian retail experience by the big kids has created a new retail landscape, where Aussie shoppers are now empowered purchasers spoilt for choice, luxuriating in seamless customer service and expecting instant gratification of their whims with weekly fashion lines.
The traditional, clean segmented market has been thrown into disarray as the ‘middle market’ is being redefined and carved up by cross-category entrants like TJ Maxx and Japanese brand Daiso, offering unique homewares at reasonable prices.
Australians are smart shoppers, open to new business models. In fact, they are obsessed by the new and will seek out what they believe to be the best experiences globally and embrace them locally. Netflix is a prime example of this with its phenomenal uptake since launching in the last few years.
With solid consumer sentiment and a market where just 39 of the 250 world’s largest retail brands reside on our shores (a figure from Deloitte’s annual report ‘The Global Powers of Retailing’), there is still ample opportunity for global brands to carve out their section of the Australian consumer market.
Smart shoppers aside, global bands are also realizing their presence in Australia is a strategic foothold into the wider APAC region. The sustained comparative weakness of the Australian dollar is set to see an influx of Asian (in particular, Chinese) tourists for leisure, business and education purposes, over the next few years. A substantial opportunity for Asian brands in particular looking to provide familiarity and ubiquity to their core market in Australia, as well as create a stepping stone into Asia.
Confident shoppers are embracing new retail experiences and big brands are providing unrivalled infrastructure and logistics. Australia is a market ripe with opportunity for brands who can identify their particular market opportunity and execute against a clear strategy.
How are local brands trying to take on big brands in this country and what are the key rules / best practices for those trying to do so?
Hegg: The local brands that are winning are not relying on the goodwill of Australians to support local brands. They are improving their product, communications and customer experience as expectations of consumers continue to rise.
Brahe: I’d sum it up as ‘authenticity without parochialism’. Brands that thrive in Australia are able to establish some degree of iconic “Australian-ness” without resorting to any kind of myopic or small-town type of positioning. The better brands exhibit empathy and passion for Australian culture and adapt themselves to Australian conditions, be that weather, language, love of sport, or distance from their origin.
Graham: Global brands, both big and smaller, have been muscling in on the Australian retail market for a while now, via the online retail revolution, forcing local brands have to change tact to protect their market share.
The upside for local brands is that 90% of Australian retail sales are still made within a bricks and mortar environment. A physical intimacy is still paramount to purchase and at the end of the day, consumers trust and enjoy the physical shopping experience.
Local brands traditionally based in bricks and mortar are now not just providing complimentary online services, but investing in a seamless online-to-store experience, such as click and collect services and streamlining payment and delivery processes.
There has also been a focus on overhauling physical stores to provide not only efficient service, but also intimate and unique experiences, such as In-store navigational tools, in-store entertainment and emphasizing the browsing experience by combining shopping with hospitality, making the shopping experiences more fulfilling.
Investments into customer service both in-store and online beyond traditional efficiency measures, to instead create meaningful connections beyond transactions through upscaling loyalty programs and using social media to offer insightful, curated experiences for customers.
In a retail environment where big global brands win hands down on range and logistics efficiencies, it’s important local brands become laser sharp on who they are and what they offer; by identifying where their unique point of difference lies and then overinvesting in brand and product strategies.
We also can’t underestimate the cultural ‘mood of the moment.’ The current global climate is a scary and uncertain one and is translating into protectionist local attitudes and a renewed focus on our identity and love for our way of life. Smart brands will continue to take advantage of this mindset, actively playing on the ‘Australian,’ ‘support local’ rhetoric we see in politics, as well as focus on the nuances and contextual interactions that reflect of the Australian way of life and Australian psyche, to build a trust and invaluable connections unable to be achieved by local brands.
What can global brands learn from local brand marketing?
Graham: Beyond range and scale, consider the personal, not just personalized, experience you offer. As local brands have the advantage of being ‘local first,’ genuine, personal service is paramount to building trust and winning over their dollar.
Don’t forget who you’re talking to, not just what you’re selling them. For too long, Australians have had shouty ads that don’t treat consumers like the smart and sophisticated shoppers that they are. Provide brand experience that goes beyond selling product and stands for something interesting and important.
Virgin Australia is an example of a successful translation of a global brand into a local point of view. The challenger airline has created a connection with Australians. Taking advantage of the natural global exploration inherent with Australians, Virgin has challenged the incumbent Qantas with a global perspective that is inherently part of the Australian DNA.
On that note, be fiercely yourselves. As the market becomes more commoditized and logistics and efficiencies become parity, it will be individuality and personalization that will win out.
Remaining competitive is about more than increasing scale. A sustained increase in market share will come from a nuanced understanding of Australian consumers. Just like the rest of the world, Australians are making more conscious decisions with the brands and businesses we are aligning ourselves with.
Continue to work hard to earn the respect of your customers, remain as transparent as possible, offer intimacy throughout the entire retail buying process – from online search to bricks and mortar browsing—and have a little fun in the process.
Wijnen: I think working on your localisation is really important. If you go in with all guns blazing you might have a big spike but you won’t survive: the local brands will eventually win the hearts of the consumers. Think of a brand like Aldi who have come in and done it quite well. They have maintained their internationalism—they are obviously a German-originated global retailer—but they’ve actually done a lot of hard work on the foundations and set up all their local supply lines, all that sort of thing, properly. They’ve been phenomenally successful with really very little marketing.
Hegg: It’s not enough to just repurpose a global asset with a voiceover, based on the fact it may have resonated with other markets. The strength of localised marketing relies on the fact it is just that – unique and personalised to the individual market. A global asset would need to be exceptionally strong to resonate as is, given content cut-through is harder than ever in an ad-avoidance world.