Monday, July 15, 2024
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Retail Insight – The Evolution of Outlets

In the Retail Insight for this issue, Paul McCann, Asset Manager at Lotus Property, highlights how the idea of outlets has changed over the years and how this evolution has resulted in the model becoming a key part of the modern retail industry.

Retail Insight - The Evolution of Outlets 1
Paul McCann, Asset Manager at Lotus Property

The evolution of outlet retail schemes reflects shifts in consumer behaviour, retail strategies and economic trends. The ‘Outlet Model’, initially conceived as a place where brands could sell surplus or outdated stock at discounted prices, has in more recent years transformed into a sophisticated retail offer – destinations that attract a diverse array of shoppers and brands.

From the first recorded factory outlet store in 1930’s America offering a no-frills shopping experience that focused solely on low prices, to the emergence of dedicated outlet centres across the US in the 1970s and 80s, the model then made its way to Europe and the UK, with Boundary outlets opening in Colne in 1983 and Clarks Village opening in GB in 1993.

Outlets have come a long way since those days however, one thing remains at the core of the offer – significant discounts that attract price conscious shoppers willing to travel outside of the city parameters to bag a bargain.

Fast forward 50 years and outlets are not only attracting people out of city centres and away from the high street with the promise of a bargain. They are now popular standalone destinations, attracting families and fashionistas alike – for discounts, but also for days out, with restaurants, cafes, bars, organic markets, entertainment, workshops and more now driving footfall and increasing dwell time.

The ‘outlet’ customer has also evolved during this time. The inclusion of a wider range of brands, from luxury labels to high-street names, has played a hand in broadening the appeal of outlets, now drawing in more affluent shoppers who are brand loyal and price conscious as well as those more traditional bargain hunters of old.

Changing consumer behaviour continues to influence how the outlet model has evolved. With Purpose and Social Value high on the agenda – especially for Gen Z and future spenders, Gen A – we’re seeing an increased level of interest in purpose-led retail. A preference for brands who are doing good in the world or the community.

Earlier this year, The Boulevard welcomed purpose-led retailer OutsideIn to the scheme as a winter pop-up. A local Northern Irish brand with a cult following, known for its trendy fleeces and beanie hats, this retailer has made a commitment to donate one fleece or beanie hat to the local homeless community for every one sold. The pop-up was a huge success, giving OutsideIn the chance to engage with a customer outside of their usual city centre shop. They stayed on the scheme for longer than originally intended with plans to return later this year. A sure fire endorsement in the power of the purpose purchase!

Pop-up shops like this and limited-time collaborations are now regular features of outlets, aimed at creating a dynamic and engaging shopping environment that encourages repeat visits and helps brands manage the peaks and troughs of trading.

Localism – the importance of buying local and supporting local businesses such as independent stores, content creators and suppliers – has encouraged schemes around the world to look at the community they serve, all while having national and international ambitions. Creating safe and welcoming places for people to meet and gather has become as important as driving sales, albeit it has been proved that getting the former right helps the latter objective.

Investing in Placemaking allows outlets to create a Sense of Place. This can be done through cultural activities, partnerships with local artists and traders and hosting workshops to drive footfall and increase dwell time on site.

Sustainability has become a crucial consideration, with many outlets and shopping destinations adopting eco-friendly practices, from green building designs to initiatives that promote recycling and reduce waste.

Caring about People and the Planet as well as Profit is vital to the new age of outlet schemes. Creating biodiversity initiatives, partnering with local wildlife bodies and enhancing green spaces by investing in plants and flowers are all achievable ways that outlets can do this.
The green agenda will continue to gain pace, with more emphasis and demand on our retail partners from a landlord point of view to commit to green practice and the transparent measurement of positive environmental impact.

We know too that for the younger shopper, green credentials are a huge purchasing factor and brands and centres who fly the green flag authentically are well placed to benefit.

The evolution of outlet retail schemes from simple factory stores to multifaceted shopping destinations illustrates the dynamic nature of the retail industry and the many faces of outlet shopping since the model was first conceptualised. By continuously adapting to economic conditions, technological advancements and shifting consumer preferences, outlets have remained relevant and appealing while staying strong to their unique and resilient proposition as a place customers can bag themselves quality, branded items at a significantly reduced price.

As the retail landscape continues to evolve, outlets will likely keep innovating, ensuring they meet the needs of future generations of shoppers and we’re excited to see where the journey takes us next.