Image: Dmitrijs Dmitrijevs
Many shoppers, looking for a deep discount on things they would normally buy at the local mall, might actually be missing out on a better deal by going the extra mile to the outlets.
The Wall Street Journal finds that many retailers have better deals at their regular store locations. And consumers are catching on, with one-third of consumers tracked by Citi Retail Services saying they’ve given up shopping exclusively at outlets because they saved more money at regular retail shops.
“If mainline stores are undercutting their bargain-basement cousins, it is a telling indicator of how reliant on discounts American retailers have become,” says the Journal. “It also could cast a shadow over the growth of outlets, which has been one of the few bright spots in retail as the U.S. economy claws its way back from the recession.”
It’s worth noting that merchandise at outlets is oftentimes much different from what you’ll find at a full-priced retailer. There have been times when we’ve been disappointed to walk into a factory store to find table after table of t-shirts and khakis.
Retailers say the customers going to the outlets are a separate group from the shoppers at their regular stores, so there isn’t a cannibalization of their own business. But going back to this idea of stores undercutting themselves, there should be a real concern from retailers about their pricing strategy. When shoppers get used to paying a certain price, they’ll wait it out to get the sale. With so many options to choose from — Saks, Nordstrom, Gap, H&M, J. Crew, and on and on and on — even if the item consumers want sells out or never goes on sale, there will be other places to shop and other things to buy.
