The Rise of Out-of-Town Designer Discounters

Savvy shoppers know there is only one place to head to for designer goods that won’t break the bank and that’s designer village outlets. These out-of-town establishments boost price tags that are 30-70% cheaper than the high-street’s RRP which makes them a no-brainer for those who value designer swag with more accessible prices.

However, the designer outlet village as we know it wasn’t always as accepted and just 10 years ago they were considered a pretty risky investment. Then, of course, the recession came and shoppers were forced to be smarter with their money. Today, outlets boost greater growth than traditional designer shopping arcades. Not only this but outlet villages tend to offer much more flexible lease agreements than shopping malls. This means that retailers can ride through any volatile market conditions without feeling locked in. It also means that many retailers can ‘test’ a discount value proposition and see how it fairs – explaining why we see so many designer discount concepts ‘pop up’.

 

Although some designer houses like Louise Vuitton and Hermès have shunned outlet villages as devaluing their brand, it actually seems to prove very little threat to the brand image or value. In fact, Gucci, Prada, D&G, Michael Kors and Burberry are all part of the outlet revolution serving to make discount spaces shopping destinations. And destination is the word, given that shoppers actually have to drive to these locations. However, that doesn’t seem to be too much of a pain-point since such locations are even noted as one of the most popular locations for visiting tourists. In fact, Bicester Retail outlet in Oxfordshire reports that three out of every four Chinese visitors who come to the UK visit its retail park. In fact, Bicester Village is understood to have the highest sales density of any shopping centre in the world. Their success is attributed to their international marketing to affluent shoppers from all around the world and a wealth of brands include Hugo Boss and Alexander McQueen.

Of course, some retail reports highlight the success of the retail outlet as coming down to the shopping experience which is deliberately engineered to attract traffic as opposed to attract anyone passing. It’s this that might just make outlet shopping a different target for online retailers who have succeeded in effectively killing the high-street. Simply put, those who visit outlet villages tend to come for the whole experience. The destination is part of the pleasure.

With the commute to the destination comes the added pressure to “buy now”, after all – the bargain might not be available again and, so, retail villages report lower footfall than the typical high-street but a higher spend per person. In fact, the decision to spend is already made by the time the consumer is in the car – from that point, all retailers have to do is show them things they like and offer a clearly communicated discount against the RRP.

If you’re a brand considering a destination shopping experience, get in touch to discuss how we can support you in finding an outlet and opening a successful retail space.

 

 

 

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