Bricks and mortar vs. the Internet has profoundly impacted the retail world. The statistics say one thing: “In the fourth quarter total e-commerce sales grew year over year 15.8% to $71.60 billion from $61.83 billion in the prior year, according to the U.S. Commerce Department. U.S. consumers spent $42.28 billion online in November and December, a 13.7% increase compared to $37.17 billion during the holiday shopping season in 2011, according to web measurement firm comScore Inc.” InternetRetailer.com, April 1st. But over half, maybe even more, of all sales are at least influenced by online searches and marketing.
Brick and mortar isn’t sitting idly by. Grocery stores are having delis and bakeries insert warm enticing smells to the stores, with aisles that invite a light stroll. Larger shopping carts produce larger aggregate purchases, some say as much a 40% more. Loyalty programs and traffic/ eyesight cameras track consumer behavior in extreme detail. Savvy clothing retailers organize visual lures to bring folks down critical aisles. Sales are everywhere, all the time. High-end stores try to generate full prices, but except for the top of the food chain, everyone’s waiting for a mark-down. But even the bricks and mortar trends are changing with this massive online competition.
One of the most interesting modern shopping phenomena that has exploded of late is the outlet mall. I see lots of one-off stores who try to lure shoppers with that name, but the mega-venue is a trend that seems to fit these economically impaired times. “The outlet business is growing at a faster pace than the larger apparel market. Outlets posted sales of $12.3 billion over the last 12 months ending in March, nearly 14 percent higher than the $10.8 billion they posted the previous year, according to data from the NPD Group, a market research firm. The apparel market, with sales of $200 billion, grew less than 3 percent over the $195 billion it posted a year earlier…
“Over the last 10 to 15 years, the outlet business has changed considerably, market experts said...‘It used to be that outlets were a clearinghouse, a place where consumers could get overruns, or extras that never sold,’ said Marshal Cohen, a chief industry analyst at the NPD Group. ‘Now, 86 percent of merchandise that is sold in outlets is specifically made for them. While they may have fewer design elements than their premium brands, the consumer is getting a set of standards that is still higher than what are used by more affordable brands.’…
“[Mall developer Simon Property Group] has put such effort [$170 million renovation] into the redesign of the [Woodbury Commons, built in 1985] center because of its importance in the company’s overall portfolio. ‘Today, if a brand doesn’t have an outlet store, you can bet they are looking at potentially opening one,’ said Michele Rothstein, a senior vice president in marketing at Simon.” New York Times, May 21st.
Some are chi chi with lots of super-high-end stores, like the malls in Cabazon, California or Woodbury Commons, New York (above aerial view). Others are flailing attempts by local communities to get highway travelers to stop and take a look, often struggling with unrented space. But for those mega-outlet centers, they often become travel destinations in and of themselves. And those who travel there intend to shop! Admit it, you’ve been lure in to one of these malls? Think this is just an American practice? Try the lovely outlet mall about 30 minutes outside for Florence, Italy: Via Europa 8, Leccio - Reggello (Florence). Monday to Sunday from 10am to 7pm. Yeah, I’ve been there!
I’m Peter Dekom, and harsh economic times create opportunities right and left.
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