Recently in Chicago, Illinois the area’s newest outlet mall opened this past Tuesday becoming a new competitor for other area outlet malls with the premise of it being a newer, upscale outlet mall option. It features specially curated artwork, incorporating unique design and art in the mall’s layout. In the past few years, outlet malls’ reputation have changed. They are no longer where formerly-in season merchandise is marked down for all of us who couldn’t afford the item full-price. They’ve now become a shopper’s go-to destination for out-of-season items marked down as well as the latest trends. I did a little research.
A couple of years ago, when the economy took a dive, outlet mall sales were up, naturally. When surveyed, a group of stores like J. Crew and Casual Corner were found to have ownership of the outlet mall counterparts in addition to the primary retailers. Many of these companies with full ownership not only had some of the same items in primary retail locations as in the outlet stores at the same time, but it was found that the prices in primary retail locations were either the same or sometimes lower.
So that leads me to ask, what is the future of outlet malls? Being a Chicago native myself, I’m within 15 minutes of the 10 years old, Gurnee Mills (one of the largest outlet malls in the Midwest), the Prime Outlets 15 miles north in Wisconsin, and the new Fashion Outlets that opened in Rosemont. I’ve been to all three and each have a unique focus. Gurnee Mills is family oriented and focused on the idea of shopping and entertainment combined. Prime Outlets is all about pure shopping for the best prices (they only just opened a small food court a few years ago). Finally, the Fashion Outlets are about mixing upscale with art and targeting both high-end and low-end customers (there’s a Forever 21 and on the other side is Neiman Marcus). Each mall is unique but are starting to grow similar to their primary retail counterparts. Additionally, the mixture of primary retail stores and outlet stores has created this new hybrid breed of outlet mall which makes for the perfect money-making equation for mall owners.
Gurnee Mills recently did the same thing when the new Macy’s opened up (not an outlet version; completely full-priced). In the agreement, in order for Macy’s to move in, that wing of the mall had to contain only full-price retailers as well. I recently visited and walking through the mall it was like walking from the past to the present. So are these hybrid malls of discount and full-price the future? There is still a stigma on outlet malls but that view may be changing and the lines are quickly becoming blurred. As outlet stores become more upscale, their distinction from primary retailers will weaken, leading retailers to increase emphasis on private label or retail branded offerings.
What do you think about the growing similarity between outlet malls and primary retail locations? Is there really even a point any more to distinguish between the two? (Especially if prices and merchandise are not all that different.)
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