GLOCALIZATION in retail is all the buzz these days. But what it means and how to do it isn’t always clear.
A combination of ‘global’ and ‘localization,’ glocalization is a portmanteau word used to describe a product or service offering that is distributed globally, but that is tailored to the culture and tastes of a local market.
Why the need for this cool new word? And what does it mean for the world of retail?
Back in the day, a simple retail chain often meant booming business. Roll out a template across stores in a number of different locations, and retailers reaped the benefits of brand equity, standardization, and economies of scale. For consumers, these efficiencies meant wide product selection, consistency of offering, and decent prices. It was win-win!
But in recent years, the chain format reached a tipping point.
As chains expanded, they replaced independent neighbourhood stores, making the retail landscape more homogeneous. Consistency went from being reassuring and comforting to indistinguishable and alienating. And it became apparent that there is such a thing as too much choice!
Today’s customers want stores to be more localized, to reflect and support the community. They crave personalized, unique and relevant experiences. They want to feel reassured that someone is paying attention to them, that products on offer have been curated with their needs and desires in mind. Customers know retailers can do this because, after all, as we’ve outlined in previous posts, retailers have access to more information on their shoppers than ever before. In exchange, they expect retailers to observe customers’ individual shopping patterns and adjust their offering accordingly. That’s the win-win deal today.
The challenge for global retailers is how to retain the efficiencies of consistency of offering, but create personalized experiences and tailor each store to the local community. Simply put, these stores need to offer products and services that are adjusted to accommodate the consumer in the local market. And even go beyond that to figure out in what way the experience will happen, what is most important to the customer, and where and how it will happen.
This is where customer-centric, strategy-led design comes in. Before starting to make changes to a store, retailers need to do their research in order to uncover which local market characteristics need to be considered, and how to effectively analyze and integrate those findings to create a ‘glocal’ store.
In recent years, we have seen multiple examples of ways global brands can go local. We will focus on the following three approaches:
Curated Offering
The first store that comes to mind is McDonald’s as it is a massive conglomerate with locations almost everywhere on the planet. Even though it is a fast food chain whose flagship burgers are well known (e.g., The Big Mac, The Quarter Pounder), McDonald’s actually caters to different traditions, tastes and even religions in each country or market it has locations. Local favourites range from the Maharaja Mac in India (read: no beef) to the McLobster in eastern Canada.
There are even brands that go deeper by hyperlocalizing their offering. Price Chopper, for example, is a supermarket chain with over 130 stores in the northeastern US. Each store reaches out to local farmers and small businesses in order to feature homegrown offerings, from fresh-from-the-farm produce to locally sourced delights ranging from beer and granola to marinades and maple syrup. Each store caters to the specific community they operate in and although the brand is still consistent and apparent when entering any of their stores, the local product variations are more representative of the community on the doorstep.
Community Support
Canadian Tire operates 450+ stores across Canada, and each one runs a ‘Jumpstart’ program – an organized sports program for kids in the neighbourhood the Canadian Tire store serves. It is a national charity with a local commitment. Each store can partner with local community initiatives of their choice and support organized sports of their choice, and the money raised goes directly to the local Jumpstart program.
Local Market Characteristics
VIPs, a Mexican restaurant chain with over 250 locations across Mexico, has taken a different approach with their glocal strategy. The store’s physical design is meant to reflect the neighbourhood. They bring local community accents to each store by using construction materials available nearby. Local stone is used for each site’s façade, tying the brand’s ‘community’ commitment to the design, which varies between coastal Mexico and more central communities. And each store displays photos of the neighbourhood, including historical imagery that triggers feelings of nostalgia.
These are just a few examples in a sea of innovative initiatives by global retailers to put what they know about their customers to use and design stores strategically to show customers they understand them, and thereby increase customer satisfaction and loyalty. As retailers continue to learn more about their local markets, glocalization will continue to evolve to suit the needs of today’s locally minded customer.