ACROSS | The European Retail Real Estate Magazine

Factory Outlets | Opinion

Poland – Time for Advanced Outlet Ideas

Brendon O’Reilly, Managing Director of Fashion House Group Image: Fashion House Group

Without a doubt, the Polish outlet market is the biggest in CEE, which makes it very attractive for investors. Outlet centers operating there are a great example of meeting current market needs—both from tenants’ and customers’ perspective.

By Brendon O’Reilly

The next several years will be challenging for all market players, however, as new key trends shaping the outlet experience in Western Europe aggressively affect the country.

Whether the market is already saturated—with 14 outlet centers delivered in the country’s major agglomerations and five under development—is a matter of debate. I personally believe Poland still has the potential to absorb new investments, especially near the country’s eastern border.

Outlet centers already in operation may also be further developed, adding new phases and more units to their general schemes. Regardless of this capacity, schemes’ tenant mix and offer are much more important for the future of the Polish outlet market.

Trend 1: premium offer

There are two ways of building the proper tenant mix: Basing the offer on mass-market brands or offering a well-balanced combination of popular and luxury offers. Polish consumers’ requirements have constantly evolved.

More than a decade ago, when I started co-forming the outlet market in Poland, a typical center comprised mostly multi-brand distributors. Customers today can visit outlet centers more often and spend more money there. Schemes are also attractive assets from the point of view of luxury brands—premium labels are eager to open mono-brand boutiques.

This trend will continue and affect schemes’ development and management. In every shopping destination, luxury requires a unique setting—winning concepts offer original, attractive architecture and interior design.

Trend 2: food and leisure

Within mature markets, there is a strong focus on personal experience. Outlet centers are gaining new roles and services. They are becoming not only shopping venues, but lifestyle destinations for demanding customers, who are spending more and more time there. Poland is going in the same direction.

That is why we will observe further evolution of the foodservice and leisure offer in outlet centers. Schemes’ owners will be obliged to secure a wide choice of restaurant operators, offering different tastes, cuisines, style, and service. This also applies to outlets’ leisure functions.

For example, popular outlet centers in Poland already have playgrounds for children. Such additional features will become a must in coming years.

Trend 3: e-commerce

Last, but not least: This is the right moment to introduce market-dedicated omnichannel strategies for Poland. It is not enough to sell top-quality products at attractive prices in brick-and-mortar schemes.

Polish customers, like their Western counterparts, are simply used to buying in e-stores and outlets cannot be an exception. Companies must be ready to start with e-commerce platforms that will combine the most popular advantages of outlet shopping—the highest quality, genuine assortmen, and the best prices—with the speed and convenience of online shopping.

Building the optimal tenant mix is a huge challenge. Outlet owners need to have professionals on board who combine deep experience in the outlet industry with excellent know-how about online strategies.

 

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