Shopping Center Business

MAY 2016

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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Page 198 of 358

OUTLETS 194 • SHOPPING CENTER BUSINESS • May 2016 O utlet retail has long represented the epitome of value for real estate developers, retailers and consumers, but times are changing — and fast. In recent years, retailers and develop- ers have begun finding creative ways to expand value concepts beyond the tra- ditional formulas. Longstanding barriers between outlets and conventional retail shopping centers are being torn down in the quest to meet consumers' ongoing appetite for value. Consumer preferences are always changing, but what has not changed is their desire to experience a collection of nationally — and internationally — recog- nized brands, all priced to allow aspira- tional shopping. Traditional perceptions about what outlets are, what they should look like and where they should be locat- ed have begun to break down quickly. It is becoming more common to see new outlet development happening in urban settings, mixed-use settings and within a once hands-off radius of 50 miles from ex- isting retail. Additionally, an evolving com- mercial development landscape presents plenty of opportunities for outlets to suc- cessfully move into these environments. All of these factors, including new con- cepts, locations, ideas and perspectives are helping to create profitable opportu- nities for all stakeholders. Today, outlets remain the fastest-growing retail sector in the real estate industry. These emerging opportunities continue to present them- selves in meaningful ways for retail and real estate professionals who are willing to be creative, bold and capitalize on out- let momentum while embracing a market- place that continues to evolve. New developments and redevelop- ments have begun to blur the lines be- tween outlets and traditional retail shop- ping experiences. At the same time, they have inspired a growing range of new development trends and promising pos- sibilities for outlets in retail and mixed-use destinations. CONSUMER PREFERENCES PLAY KEY ROLE While real estate development dynam- ics continue to have an impact on the rapidly expanding and diversifying outlet sector, changing consumer preferences have also played an important role. In the wake of the recession in the late 2000s, the continuing emergence of a wide range of successful value-priced re- tailers and new value-based concepts has reinforced the notion that shoppers are demanding value and convenience levels that rival online shopping. Today's outlet shopper expects more out of the shop- ping experience than ever before. Outlet consumers prioritize and celebrate value, and outlet centers represent an opportu- nity to experience a massive collection of brands, all with accessible pricing, in one convenient setting. Far from a compro- mise, outlets are now seen as a priority, and outlet shoppers reflect some interest- ing demographic shifts. So the demand is there. But what about the supply? BLURRED LINES OFFER NEW OPPORTUNITIES At the same time that consumer pref- erences are changing, traditional percep- tions about what defines an outlet are starting to shift. Simultaneously, an evolv- ing commercial development landscape is redefining merchandising mixes in strip centers, mixed-use developments, outlets and enclosed malls. Outlet retailers and developers are open to experimenting with ways to integrate a value proposition with traditional retail. Together, changing consumer pref- erences and outlet retailers' willingness to integrate with traditional malls are driving some intriguing changes across the industry. The traditional notion of a The Convergence Of Outlet And Conventional Retail Centers As new centers are built, many developers are combining traditional retail with outlet retail. Here's how to successfully adapt these formats. Tonya Creekmore Connecticut's Steelpointe Harbor will feature a mix of traditional retail with outlet retail. (See related article on p. 98)

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