For international retailers looking to expand, the U.S.A. is a prime target.
A Barclay’s survey of British retailers found that 45.9% cite the US the “hardest to enter of all overseas retail markets”, but 40.2% say it is the “top current country in terms of sales growth.”(1) So why invest in US expansion? Americans love luxury foreign products—Americans premium consumers are drawn to the authenticity and the glamour of products coming from the old continent.
Why invest in digital?
Social media platforms in the US can now target and reach a huge audience of active, engaged consumers—and that valuable audience is only growing. In 2015, the Pew research center confirmed “65% of [American] adults now use social networking sites – a nearly tenfold jump in the past decade.” (2) 62% of the entire US adult population (322 million) are active Facebook users. E-marketer projects that by 2019, the Instagram audience will reach 111.6 million Americans, more than one-third of the population, and over four in 10 internet users. (3) This huge audience, made accessible by precision targeting, represents an incredible opportunity for brands.
American consumers are primed to be responsive on digital—studies have shown digital advertising directly impacts purchasing behavior and sales.
76% of shoppers interact with brands online before stepping into actual stores.
78% of people said that social media posts of companies influence their buying decisions.
Digital marketing facts from (4), (5)
Digital campaigns have many competitive advantages, especially for brands in the early stages of an international expansion. It takes far less resources and time to organize and launch a digital brand awareness campaign than a traditional media campaign, which represents strong added value to brands and start-ups that want to move fast to establish their digital footprint. Since everything is measurable on digital, campaigns provide valuable real-time customer feedback, giving brands essential consumer behavior knowledge and saving money on market research and focus groups.
Leading American food, wine, and luxury brands are massively shifting their media spends to digital, but this is only the beginning of the process. The social media advertising sphere is still in its earlier stages, so even for the leading social media platforms, the cost for a significant reach is still very competitive compared to the traditional medias: press, out-of-home advertising, and TV.
While American luxury and lifestyle brands are ramping up their digital presence, there is still an incredible opportunity for European brands to build a strong presence in the US digital landscape, with little to no competition. But this unique chance to create a major digital footprint won’t last long, and soon the market will be far more competitive and saturated. The sooner international brands invest on digital media, the greater the ROI will be. Results from digital advertising campaigns are really spectacular when the strategy is right—invest today to increase brand awareness, grow your consumer base, and drive sales.
About the Author
Tristan is the Founder of TDT. A savvy strategist with 15+ years experience driving digital innovation and brand awareness for luxury, lifestyle, and culture clients, Tristan expertly melds his marketing expertise with a creative, artistic eye to craft unique strategic insights that transform brands.