Outlet Upgrade: How Full-Price Brands Are Redefining Retail
Outlet Upgrade: How Full-Price Brands Are Redefining Retail
Forget dusty outlet malls! Retail is getting a glow-up. Discover how big players are blending full-price brands and experience-rich centers to attract new shoppers and drive growth.
The retail landscape is constantly shifting, but lately, we’re witnessing a seismic transformation in a place you might least expect: outlet shopping. It's no longer just about discounted goods; the game is rapidly changing to embrace a full-price, lifestyle-centric approach, making these destinations far more appealing to modern consumers.
Leading this charge is a company known for its outlet centers, now strategically pivoting to integrate full-price retail. This isn't just a minor tweak; it's a fundamental reimagining of their identity. They’re actively acquiring open-air lifestyle centers, like the Town Center at Levis Commons outside Toledo, OH, marking a significant expansion beyond their traditional premium outlet model. In fact, this is the fourth such open-air center purchased since late 2023, signaling a clear direction for growth.
But why the pivot? The numbers tell a compelling story. Open-air centers are simply where the traffic is heading. Through May, these centers saw an average traffic growth of 4.8%, while traditional outlet malls lagged, picking up only 2% more visitors. Placer.ai attributes this difference to the broader array of experiences offered by open-air centers—think restaurants, fitness studios, and entertainment venues—which draw in a more diverse and local affluent shopper base, unlike outlets’ historical reliance on tourists.
What’s truly fascinating is how this shift isn’t limited to new acquisitions. Full-priced brands are now increasingly popping up inside existing outlet centers. Imagine shopping at a Sephora, Ulta, Victoria’s Secret, Lego, or Bath & Body Works within what was once a purely discount-focused environment. This integration of sought-after brands alongside traditional outlet fare is creating a hybrid model that caters to a wider audience.
Stephen Yalof, CEO of one of these pioneering companies, emphasizes the strategic replacement of underperforming retailers with these in-demand brands. He describes this as creating a “flywheel” for growth, where increased variety and quality attract more shoppers, which in turn attracts even more desirable tenants. The results are already tangible: the portfolio has expanded, non-apparel/footwear tenants are growing, and sales per square foot are on an upward trajectory.
This evolution is also a smart move to address key demographic and geographic shifts. It caters to growing populations in secondary markets and is perfectly positioned to attract Gen Z consumers, who value experiences and convenience. By transforming into destinations that offer a mix of shopping, dining, and entertainment, these reimagined centers are becoming relevant hubs for both local communities and the occasional tourist. The era of the single-purpose outlet mall is fading; say hello to the dynamic, full-spectrum retail lifestyle center.
