Full Price vs Outlet: challange to the last promotion?

Full Price vs Outlet: challange to the last promotion?

📅02 Febbraio 2024, 15:59
TESTO ITALIANO

Never as in this particular historical period, it becomes crucial to carefully examine the retail sector, comparing the current opportunities available to end consumers. A series of international events have heavily impacted a sector already characterized by a very broad offering.

It is not easy for both industry operators and consumers themselves to determine whether it is better to visit a full-price store or an outlet.

The assortment in outlets has become so comprehensive and affordable that, effectively, there seem to be no valid reasons to purchase items that we know can be found at more advantageous prices after 6/9 months. However, even the full-price market is adapting to the economic needs of customers and, above all, to the increasing competition. Promotions are commonplace, clearance sale, and other opportunities (or perhaps excuses) to attract customers are becoming more frequent.

Full Price vs Outlet: challange to the last promotion

Why go to a full price store?

It arises spontaneously to wonder if it still makes sense to distinguish between sales periods in the retail sector, considering that they are often characterized by fake discounts or promotions. So, why would a consumer, with the convenience of online shopping, still choose to visit a full-price store?

This reflection arises after recent visits to some outlets and the new Merlata Bloom shopping center in the north-western outskirts of Milan, prompting us to explore a topic that we believe is of common interest.

And so, the question that arises among customers and especially within the retail sector operators is the following: Is there still room to open new retail spaces? And if the answer is yes, who will be able to survive in this tough competition between full-price stores and outlets? To tackle this dilemma you need to ask yourself some crucial questions.

Merlata Bloom in Milano
Merlata Bloom Milano

Do you still consider yourself a “fashion victim”? Are you still attracted by the latest news? Can’t resist the idea of having an exclusive brand or product available in just a few shops? If so, then the world of full price stores is the one for you, and right now you can find stores on the market capable of satisfying every product need for your most diverse desires. You can find sneakers that exceed €500, bags worth €5,000 or even jewelry that exceed €10,000.

If your budget is more limited, in the expansive world of denim you have a wide range of options, being able to purchase jeans ranging from €29 to €299. If your focus is on the brand, quality, and above all, the shopping experience at exclusive high-end stores or international chains, at this moment, you truly have an abundance of choices.

Otherwise…

The outlet world

Is the brand important but not fundamental to you? Are you always looking for a deal? Do you care little about wearing clothes or buying products that have been on the market for six months?  Then your world is certainly that of the outlet which now, due to sales and offering dynamics, has nothing to fear compared to full-price stores.

We visited the new Merlata Bloom shopping center in Milan, expecting to find something new compared to the numerous shopping centers already present in Italy. Despite being very clean, with a wide range of merchandise and an adequate catering business, we were impressed and at the same time perplexed by some critical issues. In particular, we encountered parking difficulties (the visit took place on a Wednesday morning before Black Friday) and an inconvenience caused by inadequate signage regarding the entrance and exit of the shopping center. Additionally, in some areas the only way to access the shopping center is through a single lift, without the aid of stairs, which naturally means that the famous shopping experience was not unforgettable. Certainly, these issues will have been brought to the attention of the shopping center management, who will likely take measures in the coming weeks.

In addition to these considerations, which however have their weight, we have found stores of limited size but a very extensive merchandise offering, and the presence of the main players in each sector. Generally, there are no particularly interesting or original insights; the retail chains tend to be the same on average.

An extremely positive aspect was the notable influx of people, considering that the visit took place on a midweek morning in November, just before Black Friday. Will this new facility be able to keep consumers’ interest high over time? Considering the catchment area, from whom will it take away turnover in order to maintain its commercial expectations?

Mantova and Vicolungo outlets

At the same time we had the opportunity to visit the outlets in Mantova and Vicolungo and on this occasion we asked some questions to Marco Cicchetti, Center Manager of Vicolungo The Style Outlet, part of the Neinver Group.

Marco Cicchetti - Center manager Vicolungo The Style Outlets
Marco Cicchetti – Center manager Vicolungo The Style Outlets

Can you briefly describe the reality of your outlets?”

Vicolungo The Style Outlets is one of the two Italian outlets owned by NEINVER, a Spanish-origin multinational real estate company and a leading player in the outlet sector in Europe. The company operates in Italy with locations in Vicolungo, in the province of Novara, and Castel Guelfo, in the province of Bologna. Currently, NEINVER manages 17 outlet centers, 4 retail parks, and over 800 brands across six European countries: France, Germany, Italy, Poland, Spain, and the Netherlands. The Vicolungo outlet was inaugurated nearly twenty years ago, in 2004, and has undergone two expansions and renovations over time. Today, it spans over an area of more than 34,000 square meters and hosts 150 stores offering men’s, women’s, and children’s clothing, sportswear, footwear, household items, and beauty products, along with an excellent Food experience. The outlet is characterized by an offering that combines top brands, low prices, and a comprehensive shopping experience. This is achieved through various provided services, pleasant environments, spacious areas, and a rich calendar of events.

What are the results for the comparable season of 2023 vs. 2022 to date, and what closing forecasts do you have for 2023?

In the first half of 2023, Vicolungo The Style Outlets experienced double-digit growth compared to 2022, both in terms of sales and foot traffic, demonstrating that, despite the adversities of recent years, the outlet sector is resilient. It is important to highlight the significant contribution to this positive momentum from Vicolungo’s value proposition, allowing customers to combine top brands with the most competitive prices, along with a wide selection of dining and entertainment options and numerous services. Additionally, the crucial factor of ‘experience’ has been emphasized. In this regard, we have successfully adapted our offerings and developed new value propositions through a mix of intelligent entertainment, particularly focused on families. For instance, the outlet hosts the Kinder Joy of moving Park, a unique play area for children aged 5 to 12, born from the collaboration between the Municipality of Vicolungo, Kinder, and Vicolungo The Style Outlets. This area places a strong emphasis on children and families, promoting the joy of movement. Furthermore, we have curated a high-quality, diverse food & beverage offering with various dining options throughout the center, including ‘Antonino, Il Banco di Cannavacciuolo’ by the renowned Neapolitan chef. We also organize events throughout the year and on special promotions such as the Jungle Night, an exclusive evening of wild shopping at discounted prices. Very positive results were also recorded in all other NEINVER European centres, confirming the success of its now consolidated strategy, based on management aimed at maximizing retailers’ performance and offering excellent growth opportunities. This upward trend, which is continuing at a sustained pace, allows us to anticipate a highly satisfactory year-end closing for 2023.

Vicolungo The Style Outlets
Vicolungo The Style Outlets

Which product categories are performing well, and which ones are suffering?

Our varied and constantly renewed offer allows us to always satisfy different tastes and targets. All product categories are growing at double digits, with Sport, Mixed fashion and Denim at the top of the table in terms of turnover. Alongside top Italian and international brands, one of the distinctive features of Vicolungo The Style Outlets is activewear. In the center’s boutiques, guests can find a wide selection of technical clothing and footwear from prestigious sports brands, such as Adidas, Arena, Asics, Colmar, Freddy, Napapijri, New Balance, Nike, Salomon, The North Face, Timberland, Under Armour. A complete proposal capable of satisfying both sportswear lovers and athletes (or aspiring athletes) across various disciplines: including running, fitness, through trekking, swimming and golf, up to skiing and outdoor activities. Thanks to the last rainy period and the sudden drop in temperatures, in recent weeks we have been recording a significant increase in sales of winter garments. Additionally, this year we have witnessed a strong growth in classic and elegant men’s and women’s clothing and formal dresses to show off on special occasions and during parties.

What will be the new features in the outlets in 2024, and what is anticipated for the future?

We have just announced several recent and upcoming openings in anticipation of Christmas, from the Dutch beauty brand Rituals, to Villeroy & Boch, up to Bassetti Home Innovation where you can find collections by renowned textile brands Bassetti and Zucchi. Even in food & beverage sector we have recently expanded the offer with the opening of the first location born from the collaboration between Autogrill, Rossopomodoro and Lino’s Coffee. In the future we will continue to work to increasingly improve the shopping experience of our visitors, also through the introduction of new services, and to try to better understand their evolving needs. We will also continue to prioritize sustainability, the cornerstone of NEINVER’s management strategy. In our center, sustainability is reflected not only in everyday management practices, such as the use of predominantly renewable energy, recycled water for fountains, and the enhancement of local flora in flowerbeds, but also in the services offered to our users. This includes the presence of electric vehicle charging stations to promote more sustainable mobility solutions and recurring awareness-raising activities. Finally, we will continue our efforts to integrate the physical world, characteristic of our industry, with the digital world to leverage all the positive aspects that these two realities can offer and to meet the needs of our retailers, supporting them in the best possible way.

Mantova Outlet
Mantova Outlet

We thank Marco Cicchetti for his contribution, which confirms what we had anticipated, namely the current positioning of the outlet world, increasingly focused on providing an exclusive experience and meeting the business needs of both end consumers and, above all, retailers. The latter often balance the less stellar performances of full-price stores with the good results achieved through the outlet channel.

Our visit to the outlets in Mantova and Vicolungo confirms that the sector has the fundamental goal of creating a high-level impact on the end consumer.

Considering that the first Outlet Center opened in Italy was the Serravalle Village in September 2000 (while the Fox Town in Mendrisio, Switzerland, was already operational in 1995), the development of this retail channel has led to the presence of over 20 Villages in Italy, with a completely renewed image. It’s undeniable that the word ‘outlet’ – which over time has lost the preceding term ‘factory’ that referred to company stores – is used excessively, to the point where we see outlet signs in many contexts (there is even the funeral outlet!!). It’s undeniable that practically all companies, with their respective brands, are now present in various outlet villages offering customers, in addition to the collections of previous seasons, also products for the outlet collection, Special Make-Up which guarantee a continuous product assortment. It’s undeniable that the word ‘outlet’ – which over time has lost the preceding term ‘factory’ that referred to company stores – is used excessively, to the point where we see outlet signs in many contexts (there is even the funeral outlet!!)

The outlet channel, therefore, proves to be competitive even compared to online commerce. In addition to the advantage of enjoying savings starting from -30% compared to the original list price, customers appreciate the opportunity offered by the villages to spend time in a context that also provides entertainment.

In conclusion, if in the past full-price stores, thanks to their promotional calendar, were the main reference channel for shopping, today, with the growing popularity of outlets, the promotional system has been completely redefined. A mechanism has been triggered that implies a continuous offering of selling and discounts. We look forward with interest to discovering how these two commercial channels will evolve in the future.

by Paolo Zanardi and Simona Fiore XT, in collaboration with Roberto Cucco

by AN shopfitting magazine no.178 ©

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