Outlet Centers Proving a Win-Win for Brands, Cross-Border Shoppers

By: Elliott Smith
Inbound Logistics reports that high end outlet stores, popular with cross-border shoppers are booming. In Washington state, there are several outlet centers along the I-5 corridor frequented by British Columbia shoppers.
Seattle Premium Outlets in Tulalip, Washington is one of the most popular high end outlet centers in the region. Just how popular is this outlet center with Canadians? A preliminary study recently released by the Border Policy Research Institute found that Canadian shoppers accounted for 61% of the vehicles in the parking lot on Friday of the Easter 2013 weekend.
Seattle Premium Outlets
According to Inbound Logistics, the outlet store model is appealing for brands because they have lower operating expenses, they move more dollars of merchandise per square foot, and physically separate the brand from competing product lines:
As yet another indication of the changing retail landscape, high-end department store outlets are gradually supplanting traditional brick-and-mortar locations, reports Bloomberg Industries.
For example, 60 percent of Saks locations are now outlets, and all but two of the 15 stores it plans to open in the next two years will be discount centers. Nordstrom, meanwhile, operates 127 Rack outlets and plans to open another 17 by the end of 2013, according to Bloomberg.
Nordstrom Rack locations sell 40 percent more than the company’s traditional locations in terms of revenue per square foot. And expenses are lower at outlets, where shoppers don’t need to be enticed by fancy storefronts and amenities.
The trend is partly driven by recessionary consumer spending and the success of retailers such as Ross Stores and TJ Maxx. “These companies are serving entirely different customers who know they can’t afford the full-line merchandise, but still desire the brand,” says Bloomberg analyst Poonam Goyal.
Read the full article on Inbound Logistics here.
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