The relocalization of consumer goods like Weed Seeds Indoor is an increasingly common phenomenon, with many retailers and online companies looking for new ways to meet consumer demand. But relocalization and glocalization often fall into two different camps. While globalization benefits the large multinational corporations by driving down prices, it can hurt smaller local businesses by taking market share. In addition, the emergence of online retail has heightened competition among local businesses, which has led to higher prices.
VF relocalizes consumer goods in an online market
VF Corp has a commitment to people and the environment, and has taken the lead in implementing robotics at its warehouses. This program was launched in August, and VF is seeing improvements in worker productivity, health and safety, and ergonomics. The LocusBots have accelerated warehouse productivity by up to 63 percent. These robots help VF meet its goal of reducing environmental impact and increasing sales.
VF’s business model is built around a decentralized portfolio of 13 major brands. These brands are responsible for managing the front end of the business, including product development and marketing. The back end is corporately run and centralized, with a focus on cost and productivity synergies. The brand’s strategy is a great example of how to use e-commerce to re-localize consumer goods.
Getting the balance right in relocalization
Localization is becoming an increasingly critical component of successful business strategies for global companies. Today’s consumer markets are becoming increasingly diverse, with local character eroding as big-box stores invade neighborhoods. Smart consumer goods companies are adapting to this shift by tailoring their offerings to local markets and shifting from standardization to localization. However, there are certain issues that must be addressed before localization can be a success.
One of the key challenges of localization is overcoming the centralization/decentralization compromise. While early movers are bucking this trend, it is important to realize the ramifications and risks associated with the shift to localization. Large manufacturers are less likely to cooperate with highly decentralized retailers because they do not have the capacity to make the necessary decisions. By contrast, smaller, local businesses will face a difficult challenge in competing with giant corporations. The result: higher prices.
Impact of globalization on local businesses
Glocalization is the process of adjusting a product or service to the local culture and customs of a particular market. This adaptation on the local level creates greater interest among consumers, and it helps a company establish its relevance in the local market. In addition to localization, glocalization also pushes a product or service to a global market while simultaneously targeting local consumers.
However, glocalization may lead to mixed results, especially in larger economies. While larger corporations may benefit from globalization because it makes them more competitive, fewer local businesses will be able to compete. This means prices should rise, but competition should improve as a result. For some businesses, glocalization increases sales. But for others, the effect is less obvious. Some businesses may suffer as a result of glocalization, because their production costs are smaller.
Taking full advantage of technology
The globalization of consumer markets has created the challenges associated with localizing products and services. While it is often assumed that globalization leads to homogenization of business models, products and services, leading consumer goods companies have been adapting localization strategies in order to create a genuinely localized shopping experience. Successful business strategies are likely to be as diverse as the communities they serve.