Brendon O’Reilly, Managing Director of Fashion House Group. Credit: Fashion House Group
Feature | Retail

Outlet Retailing’s Strong Emerge

“Outlets benefit due to their out-of-town locations. As a consumer, you are able to park outside and quickly walk to your store of choice in a relaxed, open environment.”

By Brendon O’Reilly

The impacts of the Covid-19 pandemic on retail markets worldwide have been well documented. Retailers have been forced into accelerating e-commerce strategies while managing the logistics of Covid-19-safe shopping in-store. However, while many segments of the retail market are still grappling with how to operate in a post-Covid-19 world, the outlook for outlet retailing is positive.

Over the past year, consumer shopping patterns have witnessed many changes. In a pandemic-impacted world, the customer either wants their apparel delivered or they want to visit the store in person. In the short-term, that is not good news for city center shopping centers, which struggle to meet social distancing requirements. Outlets, however, benefit due to their out-of-town locations. As a consumer, you are able to park outside and quickly walk to your store of choice in a relaxed, open environment.

Brand and value have always been the major selling points for outlet retailing, but those benefits have been accentuated over the past year. As the world locked down, we all either decided to get fit and invest in our health at home, or we went the other way and over-indulged. Either way, the demand for suitable sporting equipment and apparel to either fuel those lifestyles or meet our changing body shapes resulted in a boom for leisure and sportswear. What exactly are consumers looking for when shopping for such items? Brand and value are paramount, which leads them directly to outlet centers.

Changing consumer behavior is not the only thing that has reinforced a strong outlook for the outlet market. We are seeing huge demand from tenants for outlet space in Europe to help distribute and liquidate their stock. Outlet strategies are now an established part of distribution models for big clothing brands, acting as a safety net in mitigating the impacts of another crisis. However, the core benefit for these brands remains the ability to liquidate products efficiently and profitably – in an environment in which other brands are doing the same.

The other area in which we are witnessing an evolution in the big brand outlet model is the stock they choose to sell at outlets. Where formerly, brands would use outlets as destinations for old-season stock, we are now seeing brands producing stock specifically for outlets as a way of introducing consumers to their brands at a lower price point.

Many advocates for online retailing will point to the massive growth in e-commerce numbers over the past year to suggest that physical retailing is on the wane. However, I do not buy into that philosophy one bit. First, we are already beginning to see governments worldwide starting to clamp down on online retailers through the introduction of measures, such as the big tech tax. Second, the convenience of online retailing and, in particular, fast fashion online, is leading to a huge, impending environmental disaster as people order increasing volumes of clothes only to be returned and sent to waste. Therefore, I am confident that the real-world benefit of outlet retailing will always have a key role to play in a brand’s distribution strategy.

That is not to say that we cannot and should not keep looking to improve the outlet experience for consumers by, for example, adopting new technologies, such as Click & Collect. However, our focus in outlet retailing should always remain true to brand and value. That is what consumers want, and that is what we are best placed to provide.

Sign up for our ACROSS Newsletter. Subscribe to ACROSS Magazine.

Retail MORE

ACROSS Retail Talks on „New Concepts from around the globe”

The recurring online event on all things retail welcomed four topnotch panelists who discussed current and future developments in the retail landscape and the necessary futuristic and innovative thinking to stay ahead.

Recently Opened

The Outlet City in Metzingen in the German state of Baden-Württemberg has added another attraction: the L’Osteria restaurant at the Enzian Höfe. In its role as the general contractor, umdasch The Store Makers led the project through the turbulent period of the pandemic, thereby allowing the restaurateurs to focus on their favorite task – providing hospitality.

Decentralization and the future of retail in German city centers

As if retailers in German city centers have not had enough to contend with in recent years–primarily driven by growing competition from online retailers–now they are also confronted with even bigger economic problems due to the Corona pandemic and the associated restrictions and closures. A continuous analysis of visitor development by GfK shows what has actually happened since the start of the pandemic, who the losers and even bigger losers of the pandemic are, and what the future holds.

Going Forward! Europe’s food retail sector in the corona-year 2020: the storm of the century

Europe's food retailers are being put to the test by the eco- nomic consequences of the natural disaster Covid-19. This is a very special kind of weather situation. While non-food retailers and the food service industry are in sheer despair in the face of the calm caused by government-imposed lockdowns, the "system-relevant" food retail sector has been confronted with a veritable storm tide since the sec- ond quarter of 2020.

Food retailers in their own words

Industry leaders told us about the sales impact Corona had on their business in 2020. They also explain what fundamental changes in location, sales, and marketing strategy they are planning for 2021/2022 in response to the widespread economic impact of the pandemic.

Allowing young talents to completely rethink retail

Union Investment and Sierra Germany launched their latest edition of First Store by Alexa–a campaign by Berlin’s well-known shopping center Alexa. Ralf Schaffuss, Head of Retail Asset Management of owner Union Investment Real Estate, and Jens Horeis, General Manager of Center Management company Sierra Germany, talk about their latest innovation of the competition.