of Multi-Realm
In this month’s Retail Insight, Dan Mason, Managing Director of Multi-Realm offers up his view on the new normal in the outlet industry, highlighting how the outlook of the sector has changed in recent times and what this could mean moving forward.
Outlet shopping is now the playground for a new brand-literate younger generation.
Twenty years ago, the perception of outlet shopping was very much an acquired taste. Not for everyone, this niche outpost of retail lacked mass appeal but, to the converted, the consistent cost savings, easy parking and a great day out in a comfortable, outdoor setting, kept outlet footfall and sales compellingly high. Outlets may well have sold fashion stock, but they were not seen as particularly fashionable as price was a stronger pull than trends. The first and second generation outlet schemes serviced an older demographic of shoppers, young families, especially those with cars.
Over the past two decades, however, outlet retailing evolved dramatically as swathes of brands backed the outlet concept and rode the wave of premiumisation in the off-price retail channel. The role of digital in this exponential growth cannot be under-estimated as advertising and promotion naturally slipped into social media as an effective vehicle to publicise the long list of new arrivals. Today, outlet has become a relevant and attractive addition to omni-channel retailing and the marketing effort to support it has become far more precise and controlled – two words that resonate with a key strategic objective – the acquisition of new customers.
“Today, outlet has become a relevant and attractive addition to omni-channel retailing and the marketing effort to support it has become far more precise and controlled – two words that resonate with a key strategic objective – the acquisition of new customers.”
An obvious biproduct of using social media to promote outlets has been the natural self-fulfilling exposure the concept has garnered with younger and highly brand-literate shoppers. At Lakeside Village in Doncaster, for example, the number of shoppers in the under-34 age group has increased by a third during the past four years alone, with most Google reviewers for this outlet scheme coming from the 25-34 age bracket. The digital revolution is further endorsed by the volume of videos posted on YouTube about outlet shopping doubling to 8.8 million in the last 12 months, while on TikTok the number of outlet-related videos tripled in 2023 versus 2022. The numbers tell a story.
Why are younger shoppers now flocking to outlets they previously avoided?
This demographic is drawn by quality, value and appetite for an experience that can generate content on personal feeds, stories or a source of snaps for their camera roll. Outlets are now increasingly very photogenic and ‘Instagrammable’ whilst also appealing to the price conscious consumer; an ICSC survey of Gen Z shoppers in 2023 showed that 48 per cent prefer discount and off-price retailers. This generation actively embraces the hunt for deals and experiences – as a legacy of growing up using Groupon and voucher codes where “saving whilst spending” has become a prized skillset.
On a practical level the under-30s like being able to ‘trade up’ by shopping outlet; it makes certain brands much more accessible and ‘within reach’ by virtue of pricing and available product line-up. Gen Z shoppers are even driving demand for new categories often under-represented in outlets, particularly from beauty brands and pop-ups selling pre-loved and vintage fashion.
How are operators and brands meeting the needs of this new shopper demographic?
Outlet stores have rapidly evolved into sophisticated and fully serviced retail platforms where the risk of disappointment upon visiting has been diminishing in recent years. Quality of fit-out, integration of technology, better stock provision and ever-changing stream of Instagram content has made them fashionable and appealing to younger customers for the first time.
Meanwhile, outlet operators now work in partnership with their brands to run very high-quality social feeds where they previously might have relied on traditional outdoor and print media. Instagram, TikTok and YouTube are all being deployed while reviewers and influencers are key to generating more engaging and long-form messaging.
Using a social-led marketing strategy for outlets has focused on making ‘sharing’ a key part of the experience and recently we have seen more operators incorporate LinkedIn into their planning with interviews with store managers, good cause partnerships, job adverts and reviews all contributing to dispel myths and hammer home the advantages of outlets whether finding ‘hidden treasures’, re-enforcing ‘authenticity’ or simply presenting a more dynamic image, this is so much more than selling ‘discounted’ goods.
Travelling economically is a key behaviour of the under 30s which is spiking a rise in public transport usage when visiting those outlets that have bus or train links. Younger shoppers are also being lured away from their historic online exclusivity to reconnect with in-person shopping and outlets are now adapting their events strategy to target the under-25s. Promotions are supporting ‘Back to Uni’, prom nights and graduation related spend while some events offer free gym classes. Pop-ups with local artisans and independent fashion brands (often featuring live music) are now commonplace.
Real estate investors have maintained their interest in outlets over time as a valued asset class with a data-rich and transparent operational model. To see the sector actively invite and engage with younger consumers is a prime example how reactive and responsive the channel has become. Intrinsically, outlet shopping has transcended into a ‘lifestyle expression’ so it makes perfect sense that it is growing favour with those most interested in living out their brand lifestyles (whether young or old) as prudently as possible.
