Thomas Reichenauer is Co-founder and Managing Director, ROS Retail Outlet Shopping Image: ROS
Opinion

The European Outlet Market is under pressure for innovation

Outlet Centers are still a niche market in the international retail real estate business and an asset class of its own. Today, there are more than 200 outlet centers spread over Europe but there are significant differences regarding the degree of saturation and maturity levels.

By Thomas Reichenauer

As a young, innovative, and growing European outlet operator ROS Retail Outlet Shopping delivers a strong ‘Think global, act local’ approach in 9 different countries during changing market conditions.

While Germany was more in the focus of developers and operators over the last ten years due to purchasing power and less market penetration, it is now the UK, France and Spain–the mature markets– that are coming into the limelight again.

To find out the reasons for this, you have to go back in concept history. Outlet Centers are regional shopping destination starting from a minimum of 6,000 sqm and are always aiming to become regional shopping destinations with the unique concept of great brands at great discounts, which are contractual fixed, in a great, outstanding shopping experience. Some did this good, some did it better and the majority did it just OK, which is not good enough anymore today, based on the achieved sales densities.

Those outlet projects, showing excellent performance always have the same set-up where a professional, specialized outlet operator works closely together with the investor and is fully aligned regarding their long-term strategy and goals.

However, market conditions have changed, but growing e-commerce is only one of these changes.  Due to the victory march of the outlet concept over the last twenty years many well-known retailers and brands and new private sale platforms jumped on the outlet bandwagon, copied and integrated the fashion off-price and discount approach successfully into their business models.

On the other hand, there was always a qualitative distance between regular shopping centers and outlet centers regarding shopping experience in regards to architecture, brand partner management, customer services, retail standards, marketing, and center entertainment. This gap became smaller in the last years because shopping centers also had to react to changing market conditions and customer needs.

In the current discussion there are a lot of buzz-words and general solutions like lifestyle hubs, integration of food destinations, health services, digital cross-linking, sustainability and co-working spaces, which reflects a little bit the confusion. 

Even if some elements are reasonable, ROS Retail Outlet Shopping, as a European outlet operator founded by Gerhard Graf and myself, is pursuing a strong ‘think global, act local’ approach since its foundation in 2011.

We adhere to the original outlet concept with the affiliated retail and marketing functions, considering the needs of all regional stakeholders while focusing on the changing demands of customers and tourists. The truth is that you have to reflect and think about the power of the original outlet concept that caters to customers. Work consistently and sustainably on excellent services in retail, marketing, and for facilities. Avoid “pain points”, deliver “surprises” and “the unexpected”. Customers, investors and stakeholders will reward you accordingly.

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