High-end fashion retailers are now using outlet centres for very different reasons.

Once considered a necessary evil, where brands could dispose of excess stock far away from their full price stores, outlets now present an attractive opportunity for brands to grow sales, without necessarily damaging their brand.

This change has been driven by the steady increase in attractive outlet space. With the rise of centres such as Gunwharf Quays alongside long established successes like Bicester Village, they can now be very desirable high-end retail locations.

Here are three reasons why outlets might be a relevant channel for your brand:

Luxury Perception
More and more premium fashion brands are now visible with best in class outlets including fashion brands such as BOSS, Gucci and Prada. Outlets have invested heavily in their facilities to attract these brands and their customers, often with extensive F&B offers and premium customer services such as luxury coaches taking shoppers directly to and from hotels.

New Customers
Outlets also allow premium brands to reach consumers who are unlikely to be shopping their full price stores – either due to distance, affordability or the potentially intimidating full price retail environment. These consumers, who aspire towards being able to afford the full price offering, are hungry for affordable luxury experiences and, having allocated their outlet budget prior to arrival, are keen to spend. Top outlets also attract coveted Chinese and other international tourists, whose spending power makes them a desirable target customer. The average Chinese tourist reportedly spends $5,900 on a trip to the UK and an astonishing 80% of Chinese tourists visiting London make a trip to Bicester Village.

Better Margins
With lower staff, rental and fit out costs, outlets are a profitable channel for brands. Many now have a dedicated offer specific for the channel, supplementing their offer with distinct Made For Outlet ranges, created at lower costs, with higher margins. These products offer an entry point for aspiring consumers, whilst remaining distinct from full price lines. This, alongside the fact that full price and outlet attract different customer segments, helps to mitigate brand risk.

Above and beyond being a way to deal with excess stock, outlet stores are now an opportunity for premium fashion brands to create a separate revenue stream, targeting a new consumer segment. Not only are retailers able to avoid damaging their brands or cannibalising full price sales, they are also able to actively build their brand by bringing new aspirational consumers into the fold.

Alex Cook