Evolution of the outlet

Published:  26 March, 2014

The ninth annual ICSC European Outlet Conference was held in London this year, with delegates coming together from all over the world for a one-day event aimed to help the industry meet the needs of the outlet consumer.

Taking place adjacent to the recently opened London Designer Outlet in Wembley, five expert presentations and four panel debates looked into the requirement of increasingly demanding customers, including international perspectives on how retailers and developers can take advantage of global trends, and ways to expand and improve on the services offered to the outlet customer.

Conference chair, Giles Membrey, managing director at Rioja Developments reminded the audience that outlet retailing has been one of the few successes of the post-crash retail world and that there was significant demand for outlet shopping, both from consumers, brands and investors. But he said: “Tomorrow’s consumers aren’t going to be the same as today, and we need to respond to that.”

Linda Humphers, editor in chief at Value Retail News and the International Outlet Journal at ICSC, opened the conference describing outlet retailing as a “red hot” sector. She said 25 outlet malls opened in 2013, including 11 in the US and seven in the EU. And a further 99 are planned to open by 2016, including 55 in the US and 25 in Europe. Worldwide there are a total of 410 outlet centres in 39 countries, covering over 12m sq m.

“Outlet retailing has evolved in the last 30 years but it’s stayed true to its objective,” said Humphers. “And it is continuing to create an important retail platform; value should be kept alive.”

She pointed out that while the definition of an outlet centre is a retail destination where at least 50 per cent are outlet tenants, moving towards a metric whereby at least 75 per cent of the GLA is reserved for outlet tenants would be favourable to avoid landlords filling in gaps with full price retailers. And she warned that while many landlords impose a radius to protect tenants from competition and it works for some, it can be bad move for other schemes.

Humphers gave new formats, joint ventures, large expansions and multichannel retailing as key trends, a sentiment mirrored by keynote speaker Barbara Topolska, chief operations officer at Neinver, who spoke about new consumer behaviours and transforming threats into opportunities.

She said a renewed interest in bargain shopping and the expansion strategies of international retail chains had combined to make outlets an ever more attractive proposition.

While the UK, Italy and Spain are the mature markets – there are 37 in the UK - she identified Germany as the ‘rising star’ with 25 outlets forecast to join its current six by 2025, and there is demand for growth in central and eastern Europe, where Poland has the highest saturation with 10 centres and three in the pipeline.

She said consumer behaviour had changed dramatically, and explained: “People expect the process of purchase to be part of the experience; it isn’t just about the products but about the environment. And young people have never seen the world without computers or the internet so find solutions that suit them; people want instant access to brands and they want relevant and personalised communications.”

Land Securities’ Ailish Christian sat on the one of the day’s panels and spoke about the need for greater collaboration with retailers, research and a seamless experience. “We gather information not just through on-site surveys but also conduct research with people who are not yet visiting the site,” she said. “Outlets tend to be more resilient than shopping centres but they share themes. It’s about building the destination to more than just the retail side; you want to provide theatre, a day out, an experience.”

Going forward, Land Securities is keeping a close eye on the tourist market to benefit Gunwharf Quays which has led the team ’to produce communications in several more languages.

“We need to learn more about consumers and what they want, recognise modern expectations and actively participate to find solutions in existing centres. We need to meet the expectations of brands and most importantly the customers to make them feel like guests rather than visitors,” concluded Topolska.

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