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Outlet Center: an unusual format with great benefits
The first outlet centers began to appear in Russia, and one of them, Vnukovo Outlet Village, will open for customers early next year. The benefits of this shopping format for visitors can be described in one sentence: in the outlet center, Muscovites and residents of nearby cities will be able to dress the whole family favorably. However, the advantages of the “outlet” format for tenants are a separate matter.
In Russia, the phenomenon of outlet has not yet become accustomed to. And this is not at all about buyers who quickly appreciated the opportunity to completely renew their wardrobe in one day with big discounts, but about retailers. It is the potential tenants of the outlet center who often mistakenly perceive it as a town of discounts, where the remnants of last year’s collections are taken and everything that is poorly sold in ordinary stores is rented out. This approach not only deprives the company of a very effective distribution channel, but also destroys the original image of the outlet center in the eyes of customers.
The largest objects of this format in the UK, Italy, America and other countries are far from a warehouse of unpromising goods. On the contrary, there are sold not just actual, but sometimes exclusive collections created by the brand specifically for sale in the outlet. As for the discounts, their main feature in the outlet centers is not only that they reach 70%, but also that these discounts are truly honest. Buyers, in rubles, or rather, in euro and dollar, vote for such a generous opportunity to dress well and inexpensively, so the outlets' turnover is several times higher than the performance of classic shopping centers and amounts to 17-20 thousand euros per square meter per year.
What is the obligation
The Russian retail real estate market is ready for the outlet format to be in demand by customers. But whether it will bring the retailers the profit that they can safely count on from the experience of foreign colleagues, largely depends on the companies themselves. Honest attitude to your assortment and prices in the outlet is one of the conditions for success. Tenants should ensure that there is always a complete collection with a sufficient assortment, and prices are really set at 30-50% lower than in stores of a conventional format.
However, not all companies can afford to meet these conditions, especially in the footwear segment. “The main risk for shoe makers is that they may not have enough collection for the outlet,” warns Marina Molchanova, deputy director of the department store rental department at Jones Lang LaSalle. - As a rule, the commodity remains of large networks allow them to provide a full size range in the outlet, while small companies need to make special collections. Otherwise, out-of-stock goods will be loaded into the outlet — the smallest and largest sizes, and this will reduce the turnover of shoe retailers within the outlet to a minimum. ”
Developer Responsibility
Of course, not only the retailer is responsible for the commercial success of the store in the outlet center. Management, concept, mix of brands and the location of the outlet are what its potential tenant should pay attention to. From this point of view, Vnukovo Outlet Village is a promising option. It is located on the Kiev highway, 8 kilometers from MKAD and 2 kilometers from Vnukovo airport. According to the developer Jones Lang LaSalle, the coverage of this outlet is the largest in Europe and exceeds 15 of millions of people living within 90 minutes of travel. The project is managed by a specialist with many years of experience in the global outlet segment Sabrina Caserta.
Vnukovo Outlet Village is not the first outlet in Russia: Outlet Village Belaya Dacha was ahead of it in this rank and opened the first stage in October of the 2012 of the year. Due to nowhere to rush, the managers of Vnukovo Outlet Village may be more careful in selecting tenants. Their composition is formed by the brands of the middle, medium-high and premium segment. It is known that in November 2012, among shoe companies, Carlo Pazolini, Ecco and Econika were already on the list of tenants. At the same time, the amount of space available for rent was 25%, however, this indicator is relevant for the first stage of the facility. It will open in February 2013 and will consist of 90 stores with a total sales area of more than 16 000 sq. m. The remaining 60 stores with rental area of more than 10 000 square. m open the doors for visitors in 2014 year. Depending on the size and location of the premises, rental rates primarily vary from 500 to 1000 dollars per sq. m per year, while being combined: the retailer pays a percentage of turnover, but a fixed minimum is in the range of 500-700 dollars per square meter. m per year. In general, these rates are significantly lower than the rates on the area in the shopping center of Moscow (700-2500 dollars per square meter in the clothing and footwear segment, according to Astera for the third quarter of 2012). The difference is due to the fact that the outlet is located outside the city and is less prone to fluctuations in prices for city rent.
Both experience and profit
The outlet format is an inevitable stage in the development of retail real estate in Russia. It allows retailers to develop a fundamentally new concept of sales and increase profits. The remoteness of the outlets from the city acts as a kind of filter, which means that there are no random visitors in the outlet centers and 95% of them turn into buyers. The purposefulness of the trip leads to the fact that the number of units in the check also increases. And the model of consumer behavior in the outlet center differs from the one with which sellers are used to dealing in ordinary shopping centers. “People often go to traditional shopping centers to have fun, getting into the shopping gallery in passing. Customers go to the outlet center consciously, and this leads to the fact that there are more people in the trading floor and their time in it increases. In connection with this, the staff load is also increasing, ”explains Dmitry Kondrakhin, Business Development Director at Carlo Pazolini. - Of course, all this leads to an increase in revenue. Therefore, for us, a store in an outlet center is not only a place for a civilized sale of the remains of previous collections, but also a point of accumulation of target customers providing good profit. ”
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