Outlet malls feature stores of manufacturers offering well-known and desirable consumer product brands, with the promise of favorable pricing compared to traditional retail stores. The nature of outlet malls have evolved since their first introduction, based on changing economic conditions, consumer demand, the response of manufacturers to the outlet opportunity, and developer experimentation with the format.
Outlet malls have become a popular shopping experience for consumers around the world, and a desirable distribution channel for manufacturer's and retailers.
The outlet mall concept has evolved since their first introduction in the U.S. Initially, outlet malls were truly "factory outlets" where stores operated by manufacturers or their representatives primarily sold factory overruns, seconds, and season-ends. As factory outlet stores succeeded, some manufacturers expanded as chain stores located in multiple locations featuring their products. More recently, some manufacturers have customized their offerings so that some also carry specific "value proposition" products manufactured just for their outlet stores.
Factory outlet centers were one of the fastest growing segments of the shopping center industry in the 1990s. In 1990, there were 183 outlet centers. Today, there are over approximately 312 outlet centers in the United States. Outlet malls are tenanted by manufacturers selling their own goods at discounted prices. Some large projects combine outlet stores with traditional off-price stores like Marshalls.
Outlet malls are in part simply a response to consumer demand. Consumers accept the notion of the desirability of select consumer product brands and designer labels, so most stores at outlet malls are named for and feature well-known consumer brands.
The merchandise mix at outlet malls is primarily apparel and accessories, shoes, health and beauty products, luggage and accessories, housewares, and specialty products. Soft good offerings are sometimes presented in just one, or one or more of categories such as women's, men's and unisex wear. Items sold at outlet malls are typically small enough to be carried away by any family member.
During the current economic recession, well-located outlet malls have thrived and in many cases have outperformed traditional retail centers. Outlet malls have continually had the largest increases in shoppers, while most retail formats have registered steep declines over the past four years, according to research firm Kantar Retail. A number of brands, most notably Nordstrom and Neiman Marcus, have moved during the current downturn to opening more discount concepts than traditional stores.
Manufacturers have expanded into their own outlets for defensive and strategic reasons. Getting goods to the consumer is sometimes difficult in today's rapidly-and unpredictable retailing industry. And in most markets in which outlet malls now operate, brands have numerous distribution options for reaching consumers. The outlet mall is simply one of in a series of selling platforms available to retailers.
1974 - Vanity Fair Outlet Mall opens in Reading (Pennsylvania). Although manufacturer's outlet stores are operating as early as 1936, Vanity Fair Outlet Mall is the first multi-store outlet mall.
1979 - Belz Enterprises opens the first enclosed factory outlet mall in Lakeland (Tennessee), a suburb of Memphis.
1985 - The Mills Corp. introduces the first "value mega-mall" the Potomac Mills in Woodbridge (Virginia).
