Hello
World,
Welcome to my blog Sun,
Sand and Retail: An Island Girl's Perspective on the Retail Industry in Latin
America and the Caribbean. This blog will discuss and analyze the current
state of the retail industry in Latin America and the Caribbean, as well as
expose growth opportunities within the sector. Sun, Sand and Retail will
provide readers with stories, interviews and updates on the industry. I
decided to create this blog as a personal solution to my inner conflict of
wanting to aid in the growth of my homeland but being hindered by the lack of a
true fashion industry.
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| H&M in Santiago,Chile |
As a child of the Bahamas and a student receiving my
MBA in Fashion Management, I am personally interested and invested in health of
the retail market in this geographical area. Although there is a strong
presence within the luxury retail market; there is a gaping hole when it comes to
fast fashion companies such as Forever 21, H&M and Zara; who are quickly
expanding throughout the US. Forever 21 has 2 stores within the region
(Costa Rica and Puerto Rico) and H&M has 2 stores as well (Chile and
Mexico) . Zara is the most visible within the area with 15 stores but they are
predominately located in Latin America (3 in Dominican Republic, 2 in Costa
Rica, 2 in El Salvador, 2 in Guatemala, 2 in Honduras, 2 in Panama and 2 in
Puerto Rico). The Zara brand has been the lead fast fashion retailer with profit margins far surpassing its rivals.It’s clear that the company is staying true to its Spanish roots
by only targeting Spanish speaking countries. However, I believe that Zara’s
brand would translate throughout the entire region. There are 80,000,000 tourists visiting the Caribbean
Islands per year and most of these visitors are coming from North America and
Europe. Even though the amount of tourist are increasing, the amount of
money they're spending is decreasing. In 2010 tourist spent $22.3 billion compared with the record $27 billion in 2007.The IMF has encourage the Caribbean
to diversify its tourism market especially in Latin America, who have recently
been targeting sports tourism with great success.
Due to the economic crisis,Tourists are becoming more vigilant of their spending when
on vacation and I believe that the poor retail options available play a part.
This disconnect could provide a huge opportunity for fast fashion retailers in
this region. I foresee Latin America and the Caribbean as the next frontier for
expansion due to a crossover in target consumers and lack of competitors. Other
than high end retailers, the fashion industry in some of these areas is almost
non-existent. The market is currently flooded with high prices, poor quality
and sub-par retail experience. The tourism areas such as Bay Street in the
Bahamas, Time Square Mall in Jamaica and Av Las Heras in Argentina; have high
traffic and tourist eager to shop. However, these tourists tend to be quickly
disappointed when they see the monotony, high prices and quality of the
merchandise. Even if the merchandise is of
high quality, these outlets tend to lack a trendy and versatile product mix. Imagine
the impact a few lower-end retailers could make in these areas by diversifying
the product offering with more competitive pricing for not only tourist but the
locals as well. Numerous locals tend to wait until they travel to the U.S at
the end of the summer, in what I like to call "The Exodus", rather
than shopping at their local retailers. The lack of merchandise causes them to
come to America and purchase in bulk even with the additional duty taxes they will
receive when they re-enter their home country.
I believe that fast fashion companies have a great
opportunity to spread within this region where both locals and visitors are
highly familiar with their brands. We also have to consider what impact this
can have on local businesses such as cultural vendors and boutiques. This may
cause a reduction in locally owned business but will increase employment and overall revenues within the retail sector.
Authour: Tara Robinson
Authour: Tara Robinson
