On the surface, outlet malls seem to be a dream come true. Year-round steals and deals, getting things at more than half off, getting great discounts on luxury labels, high-street brands, premium sportswear, and furnishings.
However, are outlet malls all that great as they seem? Outlet malls tend to employ psychological tactics to let consumers think that they are getting awesome bargains. When you look past the siren song of supposed deals, you might find that outlet mall products aren’t always that cheap, it’s hard to get good value, not all outlet stores are truly outlet stores while products are also available in limited quantities.
Here are 5 reasons why outlet malls aren’t are as great a deal as they seem.
Outlet Malls Create The Illusion of Inconvenience
In land starved Singapore, far away is relative but there are some malls that are just too ulu (far away). The major outlet malls in Singapore are located far away from the center of Singapore. IMM and Anchorpoint in the west and Changi City Point in the far East. These are there for a few reasons. First, rental is more affordable outside of town. Second, its good for companies that their outlet stores are far away from where the brands sell at higher prices. Third, it creates the illusion of exclusivity where you can’t get the deals just about anywhere; you will have to find the manufacturer directly.
The last reason is the worst. Outlet malls are just far away from everywhere else that shopping at them will require at least half a day. People who have traveled that far to get to that mall are more compelled to dwell a bit longer and buy more items. A study published in the Journal of Marketing Theory and Practice found that consumers tend to spend 80% more at outlet malls in comparison to retail malls.
Outlet Mall Items Aren’t Always Cheap
It is common knowledge that a lot of the common things people come with excessive markups. When shoppers head to an outlet mall where everything seems to be on sale and there are advertisements saying “60% Off” or “Everything Must Go!”; we begin to salivate. As visual animals, we have a response to these visual signs. While we may be distracted by the prospect of getting a great deal, we might miss the real economics of these retail sales.
Retailers tend to markup their prices and plant “reference prices” in our minds that try and persuade us about a product’s worth. Whether this is real or not, they then show us prices that are much lower. Brand-name clothing means big-time retail markups.
A study of French clothing franchises found that the average markup on clothing was 250 percent and 350 percent for accessories. ~Howstuffworks
This refrence price is inflated on purpose to con us into thinking we are getting a great deal. However, these retailers are still earning quite a bit of profit on these discounted items even though these items are on sale in these outlets.
Furthermore, since at everything at the outlet mall is screaming “sale” we we are more likely to think that we are getting a bargain.
Outlet Malls Don’t All Contain Outlet Stores
As outlet malls are growing in popularity, many retailers are just setting up shop where the money is rolling in. As the definition of an outlet store might be soft there might be more leeway. Thus, some retailers have set up shop to curate a line of products specifically for the outlet retailer.
Although these things still seem to be sold at a discount, these products offer little or no extra value to the consumer as they are created specifically to blend into the illusion that the outlet mall is a haven for deals.
Limited Availability at Outlet Malls
I’m sure you have experienced this before. When you head to an outlet mall, you go there full of expectation and hone in on the product that you want. But more often than not, the product that you are eyeing is out of stock or it is simply not available in your size. As they are selling primarily excess stock at outlet malls, the leftovers are often the sizes that don’t fit the majority of people.
Widely Varying Quality at Outlet Malls
According to retail analyst Maureen Atkinson, outlet stores inventory contain a certain percentage of clearance merchandise. This supply is not dependable and as a result, retailers tend to find other sources to make their products. Often, the quality of the products tends to suffer as a result as most of these products are meant to be sold cheaply so corners would be cut.
In addition, since they are selling discontinued or slow moving items, these things tend to be less desirable as they are slow moving for a reason. Off season items might not be worse but you are still paying a lot for the brand with their markups.
Although you may still find great deals at outlet stores, it won’t be easy. Here’s where IUIGA comes in. Our products have high quality, low markups come direct from the manufacturer and is sold directly to the customer. Our products are also consistent in quality across the board as there is no difference from what we sell online and at our popup store at Singpost Center.
If you are new to IUIGA, there’s no better time as we are having our annual 11.11 sale where there are vouchers aplenty, and a 50% Off Arena where you get to buy our bestsellers at half price after referring 3 friends successfully. Happy Shopping!