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Is There Room for Small Brands at the Outlet Table?

Is There Room for Small Brands at the Outlet Table?

15 January 2021
Author: Jasmine Waters

Surprisingly, physical retail hasn’t entirely been a sob story over the last ten months. As it currently stands, outlet stores are more likely to outperforming staple stores on the high street and other areas of the market. Combined with this, the strategy has now found the flexibility to migrate to a digital means, firmly establishing itself as integral to UK and Irish retail. Why should brands consider extending their reach to outlet stores – and can small and independent businesses get a piece of the action? 

Can small brands source to outlets?

The answer in short, is absolutely – albeit making sure the correct approach is taken. Many brands have been left with huge amounts of ‘unsellable’ stock after the colossal fallout of 2020, leading to a wave of business turning to outlet stores. This move has allowed brands to sell end-of-line items at discounted prices, creating a (hopefully) more profitable extension of the existing retail strategy. One of the first things small brands should bear in mind is that introducing such an outlet extension doesn’t have to look traditional. Digital outlet strategies are providing a vital outlet source of income, with brands using third party sites such as eBay to find homes for unsold stock at up to 70% off. This ties in to the already successful omnichannel approach, with larger names opting for various virtual features to partner it, including virtual shipping, real-time virtual queues and store-to-door delivery.

What is the right approach to take?

If considering a outsource to outlets, a key decision lies in partnering an established operator or going it alone. There’s no doubt that in the quieter, unsure years of high street retail, outlet stores have made sure they are no longer the underdog. With many offering attractive benefits such as free parking, open space and considerable discounts, it’s not a surprise that outlet shopping has become a much-preferred day out. In the physical sense, turnover-based rents in this field are a major plus. This allows for flexible terms and shorter lease times, as well as a reduced starting rent. Alongside much needed reduction in risk, outlet operators can stay more informed. Partnering an existing operator can also allow for a brand to utilising the outlet’s existing marketing strategy – and therefore showcased to a wider audience.

Unfortunately, there aren’t just positives. Choosing to partner can have some negative setbacks – despite less staffing needed and smaller expenditures, brands may have to adhere to minimum discount rates as well as having to sell garments appropriate for a season, shop fits which must be approved and cost-fronted. These reasons have contributed to why many have decided to go it alone, maintaining the freedom to test the waters in different creative ways while having full control. Avoiding commission rates, penalties and inaccurate stock details, this isn’t a risk-free strategy either. Despite this, there’s no deny a favourable opportunity presents itself to small and independent business in outlet form, at a time when retail experience remains in desperate need of rejuvenation.

Photo source: https://www.cnbc.com/

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