Conventional wisdom holds that a great retail brand must present one face to the world—a consistent image that defines the product wherever consumers find it. But retail chains have found that although they can hang out their signs anywhere, consumers respond differently in every country. Understanding those differences is the key to building a successful retail brand across borders.

Our survey of 40 retail grocery and clothing brands in France, Germany, and the United Kingdom¹ shows the importance of tailoring a product’s image to each national market. As retailers such as Aldi, Tesco, and Zara move into new territory, they may have to define themselves not once but many times over. Retailers that rely on a single brand formula can find themselves forced out of some markets, as Eddie Bauer, Marks & Spencer, and Wal-Mart can attest.

By comparing more than 1,500 consumers’ ratings of how well the stores performed with the store choices these consumers actually made, we found that what they say and what they do are not always identical. Customers tend, for example, to say that they don’t shop in particular stores because their friends do, but their friends’ shopping choices turn out to be powerful motivators. Customers also overstate the importance of certain issues. In choosing grocery stores, for example, German shoppers are less influenced by the range of products stocked than they claim to be, so retailers that spend heavily to offer a wide product range might achieve better results by investing, for example, in more targeted marketing to boost a store’s attractions for affinity customers (described below).

British, French, and German shoppers differ in certain broad ways. We found that consumers for both groceries and apparel fall into one of three segments:

• Service/quality customers care most about the variety and performance of products in stores as well as the service they provide.
   
• Price/value customers are most concerned about spending their money wisely.
   
• Affinity customers primarily seek stores that suit people like themselves or the members of groups they aspire to join. In fact, our research shows that affinity in this sense—the social associations of stores—is a more important consideration for all groups than marketers have traditionally recognized.

In both the clothing and the grocery segments, customers in France emphasize service and quality; in the United Kingdom, affinity. In Germany, price and value are more important than elsewhere (exhibit). These differences do not mean that a value retailer can succeed only in Germany, but they do suggest that the size of the value-oriented market differs from country to country: in Germany the discount-food market accounts for around 32 percent of grocery sales, compared with 9 percent in the United Kingdom and 8 percent in France. Understanding what drives customer loyalty in each geographic market can have enormous financial benefits; customers in our survey spent twice as much at their favorite shops in each product category as they spent at competing stores.

Retailers must improve their chances by finding ways to convert prospective shoppers into active buyers. Targeted research can show the point in the purchase process when customers turn away from a brand, and why (see "Revving up auto branding"). Retailers can then adjust their product offerings, pricing, brand image, or service levels to appeal to customers at those turning points. One apparel retailer expanding its operations in France found that less than half as many consumers there were familiar with its brand as with the brands of its competitors. More advertising had little effect; people who hadn’t visited the stores of this retailer perceived its brand as dowdy, so a greater sense of fun and fashion was needed. Likewise, research pointed to a group that rarely bought anything in these stores; for these people, the retailer needed to improve service and pricing.

In another case, a German department store chain had a 30 percent higher familiarity level than did its competitors, yet many customers who had made a purchase in its stores felt little affinity with its brand and didn’t go on making purchases there. Some customers who did return nevertheless didn’t make the chain’s stores their main shopping outlet, since they felt that the stores rarely carried new or unusual items. By addressing these two issues, the chain could substantially increase its sales.

As retail chains attempt to go global, they will have to pay greater attention to such market nuances. Large advertising expenditures and a global brand are not enough. In presenting one face to the world, a company risks presenting the wrong face to entire nations.