Designing for Outlet versus Traditional Stores

Tricia Downing is VP of FRCH Design Worldwide.

By Tricia Downing, VP, FRCH Design Worldwide

Many retailers today are looking to bolster profits by offering merchandise outside of traditional locations. Well-known brands such as Gap, J. Crew and Disney all have been on the outlet side of retail for several years. Opening an outlet store, with its lower overhead costs, may seem like an obvious decision. For an outlet to be successful, though, its marketing mission must be well understood from the start. Plus, there are the practical considerations of different space constraints, new merchandise and more. What are the key design issues in getting an outlet store right?

Don’t go to outlets for the sake of going to outlets
In opening an outlet, you must have a strategy. Many see outlets as a salve for falling sales at traditional stores. As a retailer, you need to first think carefully about what you want your off-mall store to accomplish and a clear understanding of how to get there.

There are several key questions to ask before embarking on developing an outlet store including:

  • Is it to be a true factory outlet, or just a clearance center? Will you be manufacturing separate product lines specifically for the outlet? For example, retailers like Gap have developed completely separate lines of merchandise for their factory stores, similar in design to the products in their mall-based stores, but at a lower price point.  
  • Who are your target shoppers– where will they shop and how much are they willing to spend? Are you looking to attract a whole new demographic or simply offer a new format for your current customer? Remember that an outlet may be a new channel for new shoppers, not just a shift in venue for the usual clientele. For example, luxury stores such as Saks may open an Off 5th location in a region where there are no Saks department stores, and vice versa. They determine the store format based upon the demographics of the region and their growth plans.
  • How will you ensure that the new outlet spaces do not cannibalize your brand, or at least, how do you minimize cannibalization?

See your outlet as a completely different channel from the traditional storefront. Knowing your outlet’s unique objective is crucial as it affects design decisions.  

Design still matters
Careful store planning & design for outlet spaces is becoming the norm. No longer are outlet stores afterthoughts. Many such spaces today feel as if they could fit in any shopping center across the country. The main endeavor in outlet design is to balance the price point with the fixtures and finishes while working within the constraints of the location.

Outlets present unique design challenges. When creating a traditional store, you design from the storefront all the way through to the back of house. There is a retail story that covers the entire store. In outlet locations, there is typically less control of the design at the storefront; typically, you add a storefront sign and that’s as much design differentiation as you can get at the exterior. How, then, can you continue to provide at least some of the customer experience you’ve worked so hard to develop at your traditional stores?

Also, outlets today are a completely different animal than they were even 10 years ago.  The centers are being designed as entertainment destinations, with an eye to keeping the customer there all day, or longer.  Once there, the customer is a captive audience, but this customer is a savvier, more sophisticated shopper than ever before. It’s important that the design of the store cater to the needs of this shopper and create an in-store experience that is unique, but on-brand.

Pick and choose, to uphold the brand
To design outlets in synch with your traditional stores, it’s important to consider which elements of the store design are central to the over-arching brand and which elements are specific to format. You may be able to economize on fixtures and finishes but still replicate your brand’s most characteristic design features while keeping the customer journey familiar.

Ask yourself, in the standard brick and mortar store, what is mission critical to your brand? Key elements to consider might be:

1)    Logo
2)    Signage
3)    Other design elements — signature colors or finishes
4)    In-store technology such as monitors or point-of-sale tools
5)    Lighting design
6)    Floor and perimeter fixtures

Economize sensibly
You don’t have to sacrifice design sensitivity to hit a lower construction cost. You can focus on one or two focals, be it a special fixture at the entry or accent lighting at the cashwrap, and shave costs elsewhere. Retailers such as J. Crew or Disney, for instance, opt for a different lighting package and a level of finish in their outlet stores.

Generally, actual construction costs won’t vary considerably from the mall to the outlet. While not having to provide a storefront will reduce costs, the largest savings will be gained by having an overall simpler level of finish and less detail than traditional stores. Using less expensive lighting and fixture packages as well will also cut costs yet not take away from the outlet’s merchandise.

Treating an outlet as a new venture with goals and considerations quite distinct from its parent store will help you and your creative team make intelligent decisions regarding its design. Determining your brand’s most critical identifying features will allow you to keep the customer journey recognizable even as you economize on less vital elements such as fixtures, finish and lighting.

Tricia Downing is VP of FRCH Design Worldwide, Cincinnati, an international architecture and design firm.

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