A touch of American magic on Britain's high streets

Brits may be familiar with famous American exports including Hershey’s chocolate, Oreo cookies and supersized portions of food, but US brands are becoming more than a holiday treat brought back to the office.

After much anticipation and a number of delays, US lingerie retailer Victoria’s Secret launched its first UK store at Westfield’s Stratford shopping centre in London last week, a brand famous for its ‘Angel’ models who strut down the catwalk in wings and tutus as well as their underwear.

But behind the fluff and fairy costumes lies a serious business. Parent company Limited Brands made nearly $300m (£193m) profit in the first quarter of this year alone.

The underwear shop will be hoping Brits warm to its particular brand of smalls. And despite the rocky UK economy, US companies seem to have brought their brand of optimism with them. Latest GDP data shows that the UK economy has contracted by 0.7%, but many US exporters believe the global exposure of London 2012 will benefit their brands and enable them to reach further than British shoppers.

Matt Lopez, chief executive of EB Brands UK, a US firm that has just launched a range of brightly coloured silicone purses and wallets over here called Candy Store, says he was surprised at how quickly they sold out in Selfridges, a popular destination for British and overseas shoppers alike.

He believes British shoppers are keen to see new brands on the high street and are particularly quick to pick up trends from the States.

“There’s a faster turnover than a [similar] location in the US,” he says. “The UK consumer spends more discretionary income on these types of accessories [than in the US] and that’s why the UK market is going to be particularly strong.”

Lopez hopes the high-impulse, low-cost brand will sell well here, retailing at independent stores where its young target audience likes to flash their cash.

That can-do attitude has also contributed to a culture of innovation across the Atlantic. PepsiCo’s fruit smoothie drink Naked Juice is the biggest-selling brand over there

Linda Chang, marketing director at Forever 21, the perky and inexpensive American fashion chain that launched in the UK in 2010, agrees British consumers latch on to new brands quickly – something it has had to adapt to since its UK launch.

“The British consumer adopts trends much quicker than we had anticipated, so looking at how quickly we could bring things to the market was a challenge for us. Coming from LA, that was something we had to focus on as well as getting our timings correct, such as sales and launch periods.”

The brand has a turnover of about $3bn (£1.93m), in the US and only four shops in the UK so far. Speaking to Marketing Week at the opening of the Oxford Street store – which has expanded, swallowing up the old Desigual store next door – Chang says: “In the UK market there’s competition we don’t see in the US – there are a lot of fast fashion retailers that already have a really strong brand presence here, so we’re something new.

“We’ve been in the US for 28 years now and have made our place in the market, so it was a challenge to introduce ourselves here.”

Since launching the brand in the UK, stores in Austria, Spain and France have followed, but the original UK shop in Birmingham has reduced in size. Chang claims this is not due to a reduction in sales but rather finding that a different type of store was required in that location.

“We found the size was a little too big for us – we’re better able to display in a smaller [space],” she claims.

While that store has become smaller, a new one opened in Manchester’s Trafford Centre last month and others are planned for Bluewater and Lakeside.

But the store’s challenge will be to keep up with fierce competition from other low-cost retailers such as H&M and New Look. Chang claims that constant change will help it appeal to UK teens.

“We won’t just open a store and let it be, we’re always listening to what customers’ demands are,” she says. “When we launched in the US, we were an in-mall retailer targeted just to teens and now we have men’s, women’s, plus-size, lingerie and shoes.

“That all evolved from us listening to customers and trying to see where the holes in the market are – the fact that we’re constantly reinventing ourselves is something that stands apart.”

The US is proving to be a place teeming with ideas for British and European entrepreneurs to mimic. The German Samwer brothers, three entrepreneurs trading under the name of Rocket Internet, have been called the ‘copycat brothers’, well-known for borrowing the idea behind someone else’s American business model and replicating it. The brothers are famous for starting Lazada.com, which they call ‘the biggest online shopping mall in the world’, a South East Asian site that looks similar to Amazon.

The company recently hired ex-investment banker Kate Cornell as chief executive of Glossybox, its UK beauty subscription company, to make it profitable – something she has done successfully in the past couple of months.

Cornell explains that the original American concept was called Birchbox, started by two Harvard University graduates who realised sample-sized products could be sold rather than just be seen as freebies. Glossybox charges £10 a month for a selection of sample-sized high-end beauty products.

“The idea for Glossybox derived from Birchbox, but the concept is quite different,” says Cornell. “Glossybox is more niche, the products are more premium and we would never have supermarket brands in ours. We’ve taken it on a slightly different angle – one more suited to UK customers.”

As Forever 21 has had to adapt how it works to meet the demands of UK consumers, so Glossybox has had to make sure the products it offers are up to scratch.

“When it comes to beauty, UK customers are particularly demanding, they’re not going to spend £10 without really understanding what they’re going to receive,” she says. “US customers are less savvy, less demanding, will appreciate supermarket [beauty] brands and won’t have the same levels of questioning in terms of questioning what they’re getting.”

The underwear shop will be hoping Brits warm to its particular brand of smalls. And despite the rocky UK economy, US companies seem to have brought their brand of optimism with them

But Cornell knows there is a limit to how many samples a British beauty junkie will want to buy. Birchbox now sells men’s grooming products at $20 a month, as well as the $10 women’s subscription, so it remains to be seen whether the UK version will move this way too. Cornell confirms the UK brand is likely to expand.

While consumers across the pond may seem less demanding in some ways than the Brits, Cornell says the US breeds a certain type of entrepreneur that UK marketers could learn from.

“There’s a much more entrepreneurial sentiment [in the US] than we find in Europe,” says Cornell. “In the US, having been bankrupt twice and then setting up your own company is considered quite admirable, but in the UK it’s not – it’s considered unconventional and slightly eccentric.

“It is beginning to shift now, but in the UK we are used to people working in the larger corporates, and that’s how success is often measured. The US is a more open and liberal marketplace, so people are incentivised to start their own businesses – it’s something we should support.”

This is something that Alberto Perlman, the chief executive of US dance craze Zumba Fitness, has seen. He describes instructors Stateside as being entrepreneurs who teach at several clubs and says their British counterparts needed more encouragement when the brand launched over here (see box).

That can-do attitude has also contributed to a culture of innovation across the Atlantic. PepsiCo’s fruit smoothie drink Naked Juice is the biggest-selling brand over there, and includes flavours such as peach, mango and oat, and ‘protein zone double berry’ that Brits may find unusual. Indeed, the brand launched here in 2007 with just four flavours, compared with the 30-odd across the pond.

“The US is often so far ahead in terms of innovation there’s more stuff than we have capacity to [launch] really – it’s one step at a time,” says Ian Pate, senior brand manager of Naked in the UK (see box).

While this high level of innovation gives American brands lots of opportunities in the UK, being American can also be a hindrance, warns Pate.

“Bringing an American brand to Britain forces you not to rest on its Americanness alone to sell it,” he says. “Americana is not necessarily a draw – sometimes it can have the opposite effect.

“It forces you to think carefully about what it is about the brand and product that’s going to make it succeed here, there is no magic formula. It’s as simple as – the product has to be relevant.”

This is something high-end US leather goods company Coach found when it opened its first outlets in the UK last August. Allyson Stewart-Allen, author of Working with Americans, briefed store staff before the launch, pointing out that Brits don’t always warm to the ‘have a nice day’ approach their American cousins prefer. She adds that certain items that are ubiquitous in the States, such as a wallet with a strap called a ‘wristlet’, are met with confusion here.

But despite the differences in the US and UK consumers, it appears US brands believe they can bring confidence, innovation and novelty to a gloomy British high street. Perhaps an injection of sunny American confidence could help it shine again.