Canada is First Step to International Growth for US Retailers

Category: International Business

U.S. retailers are heading to Canada for growth, the Wall Street Journal reported today. Among those planning to open more stores and outlets north of the border are J. Crew, Limited Brands (Victoria’s Secret, Bath & Body Works), and Gap.

The move is described as a cautious “baby-step” towards broader international plans — Canada being both literally and figuratively close to home. (Many Americans think of Canada as the same as the U.S., but colder. Most Canadians I know can reel off a longer list of differences…).

Regardless, most would agree that Canada is the most similar market to the U.S., sharing many demographic and cultural traits. Thus it’s a natural first step for American companies, who might be scared off by the idea of different labor laws, shopping habits, body sizes, and fashion tastes in markets like Europe and Asia.

This keep-it-close-and-easy approach is a trend that we as a localization company has seen firsthand with our retail clients. We’ve seen much more volume and demand for translations into French-Canadian and Latin American Spanish, to support their efforts with the Quebecois and Spanish-speakers in North America.

Other interesting takeaways from the article:

  • Big retail companies have so saturated the U.S. market that the incremental gain from additional domestic locations is diminishing. The article mentions that the Bath & Body Works stores in Canada are generating 2.5x the sales per square foot that the average U.S. store.
  • Within many companies, there’s a strong perception that international growth is a “distraction” from domestic business. I think this mentality is outdated in the globalized economy. There are many options for your international market strategy; ignoring them all will enable copycats and competitors to fill quickly the void.