A New Frontier at Outlets

For many, plentiful bargains and a good variety of stores is enough of a draw to visit outlet shopping centers. But with today’s consumers seeking out fun experiences, unique encounters, and interactive activities, outlet shopping centers are aiming to fulfill their desires by offering a host of unusual services and attractions.

“Outlet shopping has always been more ‘destinational’ than just someplace you visit on a whim,” says Ann Ackerman, chief elevator of Elevate Branding and Marketing. Her Prospect, Pa., firm works with several outlets, including the Outlet Shops of Grand River in Birmingham, Ala. “They’re usually a short drive away, so people have traditionally come and spent the day shopping. But what’s happening now is that people still want to have that fun day, but their interests have turned more experiential.”

She credits the millennial generation for wanting more than just a bargain--they want good food, entertainment, and services that go beyond the expected.

The Experience Generation

At Outlets of Grand River, two amenities have filled this opportunity for experiences: a drive-in movie theatre, and a family fun center where guests can play knockerball, in which participants climb into a big inflatable suit (think a beach ball that can be worn), and bump into each other and the walls in a controlled environment.

One obvious benefit: “It’s increased our evening traffic,” said Ackerman, noting that this is typically a slow time period for outlet shopping centers. After the drive-in opened, traffic data showed that more than 43 percent of the drive-in customers also shopped the center. And weekend traffic, especially evenings, was stronger than most outlet centers: 13.2 percent compared to the national average of eight percent. The family fun center is also  doing well, and has become a local hotspot for birthday parties and a good option during bad weather. The mall is exploring more such experiential attractions, such as laser tag.

Elsewhere, similar activities are being added to the tenant mix of outlet shopping centers: Miromar Outlets in Estero, Fla., has added a climbing wall to its covered kids’ play area. A motion simulation ride, 5D Adventure, opened last fall at Outlets of Little Rock in Little Rock, Ark. And at Great Lakes Crossing Outlets in Auburn Hills, Mich., a bowling and amusement center was opened last year, adding even more of a draw to a center that already included a Legoland Discovery Center and a 35,000-square-foot aquarium.

While many of these amenities and attractions seem geared towards kids, the newest features at Settlers Green in North Conway, New Hampshire, are a little more grown-up. In January, the SoakingPot Infusion Spa opened its doors, offering scented foot soaks as well as foot and shoulder massages. The center is also working on adding other unconventional tenants in the coming months, including a boutique spinning gym and a location of one of the region’s most popular supermarkets. There’s already a nail salon on-site.

To further enhance the shopping experience at Settlers Green, which is located in a mountainous region known for its skiing and hiking, the developers have been working hard on offering more cultural and upscale features. Artwork by local artists is scattered throughout the property, and a new art café, The Met, also hosts installations from local artists. A cupcake bakery is expanding to accommodate a space for hosting birthday parties and cake design classes. And the food offerings have been skewing more upscale, including a higher-end restaurant, a taphouse, and a gourmet burger restaurant.

“We are always thinking, ‘What else can we do to enhance the shopping experience?’” explains Rob Barsamian, president of Settlers Green. “We’re in a different situation [from many other outlet centers]; we’re in a real gathering area for tourists, second homeowners, campers, and the outdoor activity world. In this region, 11 million people come and need a lot to do while they’re on vacation. Food is a big component, and they want more than a food court – they want a food experience. So we’re bringing in all these people for the food, and while shopping might not have been their first idea, they’ll stay after eating, and shop.”

Barsamian said the center is already seeing favorable results from the new tenants and attractions. “It’s bringing more people to experience our center,” he said. “They might not shop every time they come to eat, but we really do see more locals coming, more community spirit.”

Evolving for the Customers

In a time when there’s been a slowdown in retail growth nationwide, Barsamian says that getting creative with tenants can be beneficial. “It gives you the opportunity to say, ‘What other pieces can we add to the puzzle to make the experience better.

“In the big picture, as you continue to grow and change and address the needs [of the shopper], you have to evolve with what you believe the customer wants, and your market wants.”

Jeffrey Was, president of The Was Group, said that the evolution in adding attractions, upgraded dining options, and different type of retailers, is crucial for the survival of the industry. The Was Group, based in North Haledon, N.J., is the industry’s largest third-party leasing provider and currently works with about 12 outlet shopping centers.

“We’re losing business every day to online,” he said. “I’m not writing the obituary on brick-and-mortar, it’s certainly always going to have a place. But if you look ahead five years from now, the smaller, weaker centers will go by the wayside. The difference between today and the great recession of 2008-9, is that it’s not an economic issue today, it’s a societal issue: people are just shopping differently today, and everybody is trying to get their strategy straight as they look ahead. How do you incorporate and integrate brick-and-mortar with online?”

Was agrees that food is an essential draw for outlet shopping centers. “Gone are the days of the dinky old food court where you had a local pizza guy and a local hot dog guy. Restaurants are now a big amenity to a center.” Was has also seen more interactive culinary attractions, such as a wine tasting store, becoming a successful attraction.

“On a Thursday night, you might not go to the center to get the latest shirt or scarf,” said Was. “But maybe you’ll go for a wine tasting or to grab a bite to eat. It’s difficult to track, but there’s certainly a percentage of people who go to the restaurant, and then afterwards, run next door to the Banana outlet to see what they’ve got. It’s nothing but positive for the retailers.”

Another solution The Was Group is working on with its clients is to expand the types of retail options available. No longer is it just manufacturer’s outlet stores, but other complementary retailers signing leases: Kohl’s, ULTA cosmetics, Kirklands home décor stores and discounters like Homegoods, TJ Maxx, and Ross. These types of stores offer similar value pricing, but a broader, and sometimes faster changing, selection of brands and merchandise. “There seems to be a positive synergy to [a retailer like] Homegoods opening in an outlet center,” said Was. “We’re not seeing any detriment.”

With an influx of attractions for the whole family, coupled with expanded food offerings and a wider variety of retailers, the outlet shopping center industry is poised for a bright future of increased traffic and longer visit times from morning to night.

Case Study: Beef Jerky Outlet

Among the innovative and unexpected retailers that outlet shopping centers are attracting is Beef Jerky Outlet. This fast-growing company, which specializes in selling a variety of beef jerky, has opened locations in a variety of locations, from high-traffic tourist strips to traditional shopping centers, and outlet shopping centers are an instrumental part of their growth plan.

“Our store locations vary by market and property availability, but we do consider outlet shopping centers as a viable location option,” said Scott Parker, the chief executive for Beef Jerky Outlet. “Outlet shopping centers tend to draw large amounts of shoppers so the potential for customers is great. “

A typical Beef Jerky Outlet carries more than 100 varieties of jerky made with various seasonings or of various types of meat, including prime rib beef, kangaroo, and alligator.

With just over 100 locations, a portion are in outlet shopping centers, including Miromar Outlets, Arundel Mills, and Outlets of Little Rock.

“The Beef Jerky Outlet stores located in outlet shopping centers have typically done very well,” notes Parker. “We tend to see more foot traffic, which translates to higher sales day-to-day. Our stores are visually appealing, so if we can get customers to walk past the store, they are often drawn inside to sample some jerky and take a look at our products.”

Parker thinks that stores like Beef Jerky Outlet can help a shopping center draw a new demographic of customer. “Most people think of outlet shopping centers as a place to buy new clothing, shoes, and accessories,” says Parker. “But Beef Jerky Outlet appeals to a whole new demographic, including fans of the great outdoors and fitness enthusiasts. Those new customers will likely end up stopping by several other stores while they are there.”

He adds that outlet shopping centers that diversify the types of stores within their property will help appeal to a wider variety of customers, not just those interested in fashion or homeware products.

By: Jessica Harlan