Shop Till You Drop
Thursday, November 24, 2011
The holiday season is upon us, and that means, well, it means a lot of different things to a lot of different people, but there is one common denominator uniting this diverse nation: shopping.
We have a problem, however; the U.S. is suffering from a shopping deficit. Hard to believe, but true. Consumer demand is sluggish and nobody seems to know how to turn it around. You can only discount big-screen TVs so much, and open stores so early. A possible solution? Import shoppers.
The U.S. Department of Commerce, and entities such as the National Retail Federation, are well aware of the potential of foreign visitors to boost retail sales. One organization taking this goal seriously is Brand USA, a public private partnership whose goal is to promote international travel to the United States.
Five years ago, Europeans with their fancy Euros were flying to New York to shop for the weekend. Not too much activity on that front these days. Canadians are still pulling their weight, however, as a strong Canadian dollar and a relatively mild recession north of the border have been good news for U.S. retailers. Canadians on vacation, and on cross-border shopping trips, are hitting U.S. stores and gobbling up everything from wine to golf clubs to kids’ sneakers. But Canadians are singles and doubles hitters as consumers, it is the overseas tourists who are the real heavy hitters in the shopping department. Japanese and British visitors are veritable Santa Clauses for U.S. retailers.
Those changing yen and pounds for U.S. dollars are a big plus, but the growth areas, and potential growth areas, are China, India and Brazil. These countries have rising incomes, and, as outlined in last week’s Spotlight, send relatively few tourists to the U.S. Marketing is being stepped up to increase awareness in China of the U.S. as a travel destination, and the U.S. retail and hospitality industries are advocating making it easier and faster for Chinese, Indian and Brazilian nationals to obtain tourist visas.
An October article in the Washington Post recounts efforts now underway to woo Chinese visitors. Nevada, not Beijing or Shanghai, played host to the most recent Miss Chinese Cosmos pageant, a week-long event during which the 18 contestants cruised Lake Tahoe in a Mississippi River inspired paddle-wheeler, and attended a Wild West shootout. The event was broadcast to an audience of over 200 million viewers in China, providing plenty of publicity for Nevada, a state whose battered economy needs a major shot in the arm.
Visitors from China are retail gold as they typically don’t skimp, and will spend big money on upscale clothes and electronics. The prices in the U.S. are cheaper than those in China, and it’s fairly certain that the Manhattan-purchased Coach bag is the real thing, not a counterfeit. Not only do foreign tourists boost the coffers of U.S. retail establishments, restaurants, and hotels, such spending is counted under the export column, thus helping the U.S. balance of trade.
After jewelry, leather jackets and smart phones, what’s next? Houses. The foreign consumer as stimulus program is being taken to its logical extreme in a bipartisan bill which proposes extending residence visas to those purchasing U.S. real estate worth $500,000 or more. A Los Angeles Times article describes the beneficial effects this initiative would have, particularly in prime areas of Southern California much coveted by Chinese nationals.
The message from the U.S. to our friends abroad: have a happy holiday, and while you’re at it, visit the U.S. and buy jeans, iPads, and houses. Just get over here and go shopping.