Franck Verschelle, CEO of Advantail in Paris. Credit: Advantail
Feature | Opinion

Outlet stores as an effective lever for brand retailers to clear their stock

“The economic model of the outlet store is ideal in this period of uncertainty, as it is based on balanced and virtuous relations between brand retailers and property companies, by indexing income to results achieved by the points of sale.”

By Franck Verschelle

In recent years, the climate emergency and new consumer demands have put the question of managing stocks of unsold goods in the spotlight. The current health crisis reinforces the need to study ways to recover the value of these residual stocks, which are found across all sectors. This situation leads brand retailers, whatever their sector of activity—textile, furniture, food—to meet a major challenge—that of redesigning their distribution channels in order to manage the selling of these products effectively. By “effectively”, we mean without distorting their brand image while ensuring that sales teams still get high-quality advice and sales are profitable. Since emerging in the 1990s, the outlet channel has constituted the ideal solution for meeting this challenge by offering brands the possibility of marketing their production surplus and unsold goods.

First, because this physical distribution channel responds perfectly to the aspirations of consumers, who for years have been seeking meaning and striving to keep their budget under control, thereby proving the rightness of this model. More recently, the anti-waste law1 adopted in France in late January 2020, has also accentuated this tendency. The new law bans companies from destroying unsold goods, urging brands to find new outlets and to inform consumers more fully. This transparency with consumers is something we have been applying in our outlet centers and villages since they were first created.

And second of all, because the economic model of the outlet store is ideal in this period of uncertainty, as it is based on balanced and virtuous relations between brand retailers and property companies, by indexing income to results achieved by the points of sale.

At Advantail, our mission is to help brand retailers sell their production surplus while guaranteeing profits and the preservation of their image capital. To do so, we adapt to the needs of each brand retailer by proposing bespoke solutions such as the possibility of setting up business quickly in pre-fitted out shops, or temporary formats such as pop-up stores, clearance sales or flash retailing, which are also popular with visitors. We are convinced that the challenge we face as managers of shopping sites is to continue to build a transition towards a model of sustainable, balanced trade between stakeholders with the end consumer at its heart.

We have already been reflecting on these issues for several years, but our thinking has been accelerated by the situation of recent months. We continue to propose our commitments and solutions for ever more responsibleconsumption. This contributes to making outlets places of thoughtful consumption and to offering consumers new opportunities to find bargains.

The emerging and already essential markets of second-hand and reconditioned goods are complementary to the outlet offering. They will be the next sectors to be included in these shopping centers that are not quite like other commercial complexes.


1 https://www.gouvernement.fr/adoption-du-projet-de-loi-anti-gaspillage-ce-qui-va-changer

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