How Omnichannel Brings Outlet Stores to Anyone, Anywhere
The retail sector experiences many changes as the marketplace evolves. However, one aspect of retail is currently undergoing a resurgence in popularity – outlet stores. The reason? Omnichannel’s ability for brands to reach customers anytime, anywhere.
Like most retailers, outlet stores saw a slump in foot traffic during the pandemic’s peak. That slump has now transformed into a rapid increase, thanks to several factors.
One factor is the uncertainty around the economy, which often results in less personal spending. Another centers on consumers’ willingness to visit more open-air-style shopping centers. These types of shopping centers, which benefit from outdoor air flow, typically house outlet stores.
These factors all play into outlet stores’ recent popularity. However, omnichannel holds a unique ability to satisfy consumers’ constantly evolving expectations. Without omnichannel, retailers would be unable to reach faraway customers. Brands can also leverage outlets to entice value seekers, offload excess inventory, and provide customers with a seamless shopping experience.
Read below to learn about the benefits retailers see from expanding their outlet store presence and how omnichannel can help power this expansion. Also, check out our 6 steps to success for franchise retailers seeking to leverage omnichannel platforms.
What Are Outlet Stores?
Outlet stores sell lower-priced merchandise directly to the public. Instead of offloading unsold inventory to an off-price retailer such as T.J. Maxx or Marshalls, some brands choose to invest in outlets or factory stores to appeal to loyal bargain seekers as well as new customers.
Certain brands opt to manufacture outlet-specific merchandise that may contain a difference in materials from items stocked in full-line retail stores. Others may use outlets to sell previous seasons’ products. All outlets boast one assurance, however: their prices are competitive. And to ensure their prices stay profitable, retailers typically open outlets in more remote locations to keep real estate costs low.
How Outlet Stores Help Boost Retailers’ Bottom Lines
While brands should strive to maintain their full-service retail stores’ presence, investing into outlets yields several significant benefits that full-service locations may not provide. These benefits offer the potential to reach untapped markets and customers, ensure that inventory remains underneath the brand’s umbrella, and enable consumers to access a wider selection of products and shopping experiences.
- Clearing Excess Inventory: Brands can offload the previous season’s unsold inventory, albeit at lower prices. Rather than dispose of the inventory, retailers can ensure that some pieces still reach their loyal brand enthusiasts.
- Appealing to Deal-Seekers: Value shoppers have always been an important part of the marketplace. In today’s digital era, consumers can access more online resell services than ever. To compete against the eBays of the commerce ecosystem, brands must appeal to deal-seekers directly.
- Reaching Faraway Customers: By offering access to outlet merchandise via digital channels, brands can more easily reach customers in faraway locations. For example, more remote brand enthusiasts can now place orders via a mobile app or website. This then eliminates the potential for those shoppers to purchase items at a competitor boasting a more local presence.
- Easy Returns: Many retailers now allow customers to return items at either a full-service store or an outlet. The guarantee of easy returns can sometimes be alluring enough to cinch a sale from an uncertain customer.
Omnichannel and Outlet Stores: Boosting Retailers’ Reach
Omnichannel platforms play a large role in supporting the renewed popularity of outlet stores. From order fulfillment to omnichannel insights to powering a greater footprint, the benefits are significant.
Here’s how omnichannel is helping retailers boost their profit margins via outlet stores.
Endless Aisle Order Fulfillment
Endless aisle technology gives retailers the ability to access and sell items from any of their locations or distribution centers. It also lets sales associates view the full inventory catalog and help customers find sizes or styles unavailable in a particular store.
For instance, a customer may visit an outlet and find an enticing item but need a different size than what the store has available. With an endless aisle solution, the associate can locate other stores that have it in stock. They can then ship the item directly to the customer’s home or arrange for them to pick it up at another location.
Offering shoppers access to larger product assortment can only benefit retailers. Deploying an endless aisle omnichannel strategy gives shoppers the option to buy outlet items at a regular store and vice versa. This ultimately helps retailers integrate all store inventory and provide consumers with a true endless aisle shopping experience.
BOPIS Shopping Options
Additionally, outlet stores significantly drive BOPIS (buy online, pick up in-store) options. Brands can drive more store traffic by enabling customers to place orders online and pick them up at a local outlet. And, if shoppers happen to see other interesting items when they visit the outlet, the potential for more sales increases. Brands can also offer BOPIS options between outlets and full-service retail locations to give shoppers more flexibility – and drive foot traffic to both types of locations.
The same principle holds true for exchanges. Cross-channel returns and exchanges stemming from a single system ultimately provide an easier experience for the customer. They also give retailers important information about consumers’ shopping habits.
Real-Time Inventory Management
Outlet stores carry a large variety of styles. This helps brands easily learn which items sell well – and which pieces resonate specifically with outlet shoppers. As economic headwinds continue, retailers may want to stock more affordable pieces that attract value shoppers.
Real-time inventory management also enables brands to offload their items to their own outlet shops. Keeping merchandise under the brand’s umbrella is often preferable to selling it to a third-party off-price retailer. Additionally, inventory management helps retailers keep track of their stock across all outlet and full-service stores, which likely span many locations.
Promotions and Customer Loyalty Programs
Many retailers offer loyalty programs that enable shoppers to earn points on purchases and receive other perks, such as free shipping options. Thanks to omnichannel platforms, these loyalty programs can span both full-service retail stores as well as outlets, resulting in a true integrated experience for customers.
Integrated loyalty programs also let shoppers view inventory across stores and get notified about promotions at both full-service retail shops and outlets, which could prompt in-person visits to locations they may not have otherwise discovered.
Mobile Point-of-Sale Payment Options
These days, many sales associates in outlets carry mobile point-of-sale (POS) systems. These systems allow shoppers to check out at various points through the store. Rather than face a long line at the checkout counter, customers can approach an associate as they walk around the shop. Thanks to mobile devices with tap-to-pay functionality such as Tap to Pay on iPhone, the checkout process can occur on the spot.
Mobile point-of-sale systems also support many other ways to pay, leading to more convenience for customers. They can check out using physical cards, store gift cards, digital payment services like PayPal, Apple Pay, and even BNPL services.
Omnichannel and Outlets: The Halo Effect
While all retailers must invest in a strong digital footprint, it still pays to maintain brick-and-mortar experiences. And, by expanding their outlet stores, brands can reach consumers they may not have reached otherwise. This also yields the potential for consumers to make a purchase online and later visit a nearby outlet for additional purchases.
The International Council of Shopping Centers (ICSC) uncovered a phenomenon called the “Halo Effect.” The Halo Effect measures brick-and-mortar stores’ direct impact on brand awareness and digital engagement. This phenomenon then breaks down into “halo events.” These occur when customers buy an item online before making an in-store purchase – all within a 15-day period.
The business of expanding outlet stores significantly increases retailers’ chances for greater brand awareness, especially in more remote markets. It also drives more potential for the Halo Effect to happen, which ultimately results in higher customer spend.
To learn more about how omnichannel platforms can help brands with their outlet strategy, speak with one of our experts today.