Outlets Will Add $42 Billion to Retail Sales in 2015
December 21, 2014 | Retail
What's the difference between malls and outlets? The answer is 40. Traditional malls have seen their growth diminish year after year, but discount outlet centers are opening up at a rapid pace. That pace is 40 outlet centers for every 1 traditional mall, with 55 total centers opening through 2016.
While the "same product, different price" strategy is the key benefit for customers, they also require more from their time spent shopping. They want a fully branded experience and outlet retailers will need to strike just the right tone in order to signal ‘value’ without sending a ‘cheap’ message. With this in mind, over 60 new brands entered the outlet space in 2014. While household names such as J. Crew, IZOD, and Adidas continue to open discount stores, 2014 also brought in a good number of premium brands such as Alexander McQueen, Jimmy Choo, and Prada just to name a few.
With $42 billion up for grabs, department stores aren’t just sitting on the sidelines either. A recent article in Forbes reported that Nordstrom plans to open another 27 Rack outlet stores in the coming year. A record 60% of Saks Fifth Avenue stores are now Off 5th outlets with another 13 planned over the next two years. It's no longer a question of "if" brands will sign up for outlet space, it's a matter of "when."
And with all the B2C brands anxious to get a piece of the pie, it was only a matter of time before property groups saw and acted on the demand. For instance, Simon Property Group, the largest commercial real estate company in the US, is opening 6.4 million square feet of outlet space in 2015. At 95%, the occupancy rate of outlets is staggering and provides a lot of incentive for developing more real estate.
We believe outlets are the future of retail and there's a lot of facts that led us to there. In our latest retail report, you'll learn more about why outlets are hot right now and how you can take advantage of them.
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Posted by Kristy Elisano | Request as a Speaker
Caffeine dependent Jersey girl. Northeast powder hound. Inspired by creative risk takers and underdogs. VP Marketing, Doodle owner and cocreator of my daughter.