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Pocket Square is Australasia's only fashion focused digital agency. Read our blog for our take on the business of fashion.

Kiwi retailers brace for Internationals

New Zealand, brace yourself. We’re about to go through a disruptive time in the retail market with international heavy hitters such as Zara, David Jones, H&M and Tiffany & Co all reported to be touching down in New Zealand imminently. This is great for the customer, but what does this mean for New Zealand designers and retailers?

Physical retail will see a big shape up. Consumers will have a greater choice when they are out shopping, with the ability to pop in and out of local versus international stores. New Zealand brands will need to work hard to ensure they don’t lose too much market share when these large international players enter the market.

Having a physical presence drives traffic online. This is evident every time a retailer opens a store in a new area. The increased brand awareness from the retail footprint coupled with the implicit trust that comes with having a physical space, will help drive customers to your online store to complete the purchase or do further research about your brand.

Brands like Zara and H&M already have a strong retail presence in Australia, but their websites are non-transactional. You can’t shop online at all, so from a competition point of view, they aren’t going up against any other online retailers in that market.

So what happens when these competitors enter the market with strong physical retail and minimal online presence? We’ll definitely see a far more competitive retail landscape for physical stores. Brands will have to fight to maintain market share now they’re positioned right next to a Zara or a David Jones. The assumption will be that when these brands launch here, the same online restrictions will be in place, at least initially, giving our local brands another chance to make sure their ‘ducks are in a row’.

With that in mind, it’s hard to say exactly what’s going to happen. Just like physical driving online, the same can be said about online driving physical store traffic. Customers will look online to see what they like, then head to the store to complete the purchase. But if the new players’ stores are non-transactional, how much ‘webrooming’ activity will take place?

Webrooming or no webrooming, there’s going to be some changes in the way online shoppers shop. Brands like Zara & TopShop have a big pull with consumers, and instead of shopping online at a local retailer or brand, they’ll head in to check out these big international retail experiences, and probably spend.

What can brands do to prepare? Now would be a good time to review your marketing, physical and online strategies and make sure you’re putting your best foot forward to your customers. Increased competition in the market is great as it forces everyone to do better, so why not start now and be prepared before they arrive, rather than trying to play catch up when they get here?

Lance O'Grady