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Outlet, a “money map” it?
September 30, 2010, 3:51 am
Filed under: Uncategorized

What kind of store to go shopping? Is Carrefour, Wal-Mart or Costco, Metro? No, not now popular to “Outlet” shopping, you've been to it?

Outlet accurate positioning is the main attraction, namely, brand names, low prices. It usually has three things to attract customers to the magic: world famous brand, it is surprising low, relaxed shopping atmosphere. Although the product is sold under the shelf, off season and break codes for brand name, but it is new, and prices are generally below 60% Market price. Outlet's goal is to have a higher income consumer groups, high brand awareness, brand conscious consumers. These customers are not necessarily have to buy brand-name fashion season, even slightly off season, as long as the genuine brand name will still be their choice. Targeting specific groups such sales position is the objective foundation of the new Yetai there is also the trend of modern business development.

“Outlet” mode

“Outlet” is the English transliteration of Chinese Outlets. The English intended to “exit, outlet, outlet” means, in the retail business means the sale of brand-name secondary-season, off the shelf and break codes consisting of shopping goods stores, it is also known as “brand direct shopping . “

Outlet first born in the United States, so far, nearly 100 years of history. The first is the “factory outlet store” specializing in plant Wei Huo. Later on, together, gradually forming a similar large-scale Outlets Shopping Mall shopping center, and gradually developed into an independent retail formats, which Yetai genuine scale development began around 1970.

From 1970 to 1987, some large-scale garment factories and commodity processing enterprises use the factory's warehouse sales order Weihuo began to establish in their warehouse Outlet Store, is basically a factory an Outlet Store, the brand has set the price of goods is low quality So to attract a large number of customers.

From 1988 to 1996, Factory Outlet beginning to thrive and have a big development, to the factory outlet store more and more customers to buy goods, so many factories put together to open outlet store, when shopping centers are generally is a real “factory outlet”, although brand-name and low prices to attract customers, but there is no scale sales.

20th century 70s, Outlet Yetai in the United States showed the momentum of rapid development, closing in 1996, the United States have established more than 300 Outlets shopping center, and developers to join with Outlet, This marketing patterns have undergone substantial changes. The first is the single supplier of goods from the factory over the past development of factory goods, brand owners, brand agent, brand distributors and even large department stores to participate in specialized supply channels. Second, features more complete integration of leisure shopping. Finally, the city began to pay attention to shopping around. So that gradually developed into a major outlet centers or large shopping malls. Especially in the past two years, the sales record highs. According to U.S. statistics, the nation's 275 major Outlet centers, significantly increasing sales growth year after year. Currently, the United States, Europe, Japan and even Southeast Asian countries, there have been vigorous development momentum.

“Ole” China Road

All along, in an increasingly competitive market conditions, the market was diverted marketing, marketing Yetai single, outdated marketing methods, marketing phenomenon of low efficiency even more apparent.

In particular, since China's accession to WTO, the garment enterprises are facing difficulties and challenges more severe. Faulty macro space, innovation is not strong enough market analysis, inventory, backlog and other issues outstanding. Outlet appearance is to fill in the gaps, improve the circulation system. Outlet Format, for garment enterprises to reduce inventory pressure, accelerated cash flow, realized the true sense of business, enterprises and consumers were satisfied with the “win.”

Because, in accordance with the internationally accepted definition of the Outlets, Outlet or factory outlet centers must have three essential elements. First, the factory outlet centers must be characterized by the manufacturer directly to retail, authority is defined as 50% or more of the tenants must be a factory direct retailer, distributor of the product brand to the mainstream consumers have a certain awareness, a factory Direct retailers to distribute the same brand of goods. Second, by the factory outlet center sold goods to a cause heart low price, good enough to impress the consumer, to meet the “famous brand of consumer goods less money,” Consumer Psychology. Third, far from the center of the brand accumulation, opened with the full price branded store in the distance, the same brand to avoid the embarrassment of poor commodity prices, while a more comfortable internal environment may be appropriate to increase the dining and entertainment facilities to be extended Customers stay.

According to Beijing, “Yan ???????? The current sales data show that sales of its annual famous special mode of operation, has attracted customers from around the country (including parts of tourists), has become Beijing's shopping hot spots. The Shanghai “Outlet” discount stores in Shanghai, as the first ultra-large-scale shopping center famous direct sales, the outlook is also worthy of optimism. It is estimated that consumption of a family of about tens of thousands of Shanghai famous people who reach these consumers currently priced brand-name consumer-grade, so they rushed to purchase discount brand-name goods abroad, thus forming the turn of the year to go shopping outside the tide. These potential consumer groups, the international metropolis of Shanghai under the influence of culture will become a “concept of integration with the international market,” the objective basis. On ????????business philosophy is “to consumers here as they live in the richest part of the fun.”

Beijing, Shanghai is China's most prosperous commercial center, can be said that various forms of business model are the two together, Outlet to join, China's commercial activities will be a supplement. For the domestic garment enterprises, such as high-end boutiques and department stores, second-line shopping Format, so that once again the retail market segment, will undoubtedly extend the sales of the apparel product line, a reasonable solution to help enterprises link in the logistics problems further improve the clothing market system.

However, the concept of our country's Outlet particular confusion, many self-styled Outlet shopping, with little to run a factory direct retailer, and are agents in the business, and, within a zhuanmai gui not only the variety of goods business and brand are complicated, full of goods under the agents may be agents.

Although a considerable portion of Chinese consumers, especially in the young consumer base, there is “less money to enjoy the brand of goods,” the subconscious. This can be opened from the famous department store “sale” activities as seen in hot scenes. This unconscious is indeed Outlet center sales model is one important foundation for success. However, due to the level of economic development, income distribution, for historical reasons, by the current impact of counterfeit goods and the impact of cultural factors and other aspects of China's market order, brand is not satisfactory, to a certain extent, affected the cultivation of brand awareness.

Outlet of the “outlook”

In the U.S., Outlet business concentration has increased. Outlet operation of the polarization, due to operational difficulties, Outlet Center in the withdrawal of some stores, not enough to support the Outlet store the remaining operations centers, forcing the center owners to adjust their plans. Some owners even more selection to the lessee, can only reduce the size of Outlet Center. They hope that their choice of tenant center possessed characteristics unique to the store. Including people not or only 1-2 Outlet Center in the distribution of the manufacturer. Second only full price retailers, to promote the fashion chain stores and restaurants. With strong regional brand retailers to be chosen. So the proportion of factory outlet retail cuts, Outlet Centre, the first element was weakened.

However, in recent years, companies or groups operating Outlet filed for bankruptcy protection in the news flow. The company entered bankruptcy protection more than ever before. 1999 Welcome Home to enter the industry, investment amount reduced from about 220 stores to about 120 stores after the 2000 bankruptcy. London Fog Merchants come in almost 120 stores in 35 threw down after filing for bankruptcy protection in 2004, now has only 38 stores in operation. Most recent case is the Bugle Boy and Famous Brands Housewares. Altogether, in 2004 they closed the 250 Outlet stores. Bugle Boy Single off the 936,000 square feet GLA on the rental unit. Bugle Boy and is only in recent years Famous Brands Outlet has closed two of the long list. Others have Britches, Hero Group, Leather Loft, Mondi and Prestige Fragrance other.

Western developed countries, retail sales and retail real estate industry profit level and profit level of China's retail industry is very different. According to the sample statistics, the world's commercial retail real estate industry's gross profit margin as high as 49.3%. Department Stores industry in general over 30% gross margin, while the gross profit margin of China's department stores is only a little over 20%. Such as the U.S. Federal Department Stores (Federated Department Str.) 2005 gross margin was 40.7%; JCPenny Company Inc. 39.4%. Outlet Center in the main category of goods sold – Fashion category is the 38.8% gross margin level. Now, China's retail market competition is so fierce price war is close combat, life and death, Competing, consolidated gross margin to improve the very difficult retail.. Outlet is a cheap store brand goods, profit compression of space is more limited than the average department store. Outlet Center in China mainly depends on the survival of smart and reasonable category, brand portfolio, thereby “running volume” of sales and tight cost control. So, whether investors or managers of operating Outlet Center overly optimistic level of profitability and immediate return on investment expectations are harmful.

In fact, regardless of “Outlet” or “Sitelaiao”, as long as their is the best fit. China's rapid economic take-off, commercial retail experience a rare historical opportunity, China's retail market will be more colorful. China's retail industry in the development of both the road full of good opportunities, but also significant risks lurking. We must thoroughly study the experiences and lessons learned, to shorten the gap with the developed countries and less to pay “school fees”, more effective, so that our retail business along the road of scientific development guidelines, healthy and sustainable way.


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