Retailers cannot disregard the reality that outlet malls, positioned along highways, represent the future, and their engagement with this concept will be essential to effectively connecting with their customer base
New Delhi: During the early 1900s, as the United States embarked on road construction initiatives, a novel trend in retail emerged alongside the highways under the name of Outlet Malls. These retail destinations found their growth and prosperity greatly influenced by the convenient accessibility of the newly developed roadways. The effectiveness of the road infrastructure in facilitating travel has played a pivotal role in moulding the landscape of outlet malls.
Indian context
At present times, India is making substantial strides in road development, courtesy of the efforts of the current government. This progress is evident in the significant increase in the establishment of State Highways, National Highways, and National Expressways. As road infrastructure continues to improve and more individuals embrace road travel, highways have transformed into prime locations for the establishment of outlet malls.
The big shift
According to a study conducted by Beyond Squarefeet, the landscape has evolved since the mid-1990s. Back then, only around 20% of the vehicles traversing these highways were private vehicles such as cars and buses, with commercial vehicles like lorries and trucks comprising approximately 80% of the traffic.
Fast forward to 2023, and a notable shift has occurred, with nearly 60% of the vehicles on these highways being private vehicles—cars and buses. This shift underscores the increasing comfort level of people in opting for car travel, primarily due to the exceptional quality of the roads.
Furthermore, the affordability of cars today compared to the 1990s is a significant contributing factor. The convergence of “Cheaper Cars” and “Robust Roads” has created the necessary momentum for the establishment of outlet malls along these highways.
Current scenario
Outlet Malls have traditionally been strategically positioned in locales characterized by excellent visibility and easy access. In particular, major highways and interstates play a pivotal role in offering convenient entry points for prospective shoppers who are travelling, often with their families, as well as for those residing in nearby urban and rural areas. Developers have tactically selected locations in close proximity to these well-connected road networks to ensure that the outlet mall captures a diverse and expansive customer demographic.
The presence of well-maintained roads has significantly facilitated the ability of people to cover substantial distances in a relatively short span of time. Consequently, Outlet Malls have emerged as optimal rest stops during journeys, catering to the need for respite from driving. These establishments not only provide an opportunity to take a break from travel but also offer an array of amenities, including dining options, entertainment facilities, and shopping opportunities.
Numerous Outlet Malls are astutely positioned along frequently travelled routes, ensuring their accessibility to both tourists and travellers. Individuals embarking on road trips or business excursions often have a desire to discover and shop while travelling. The well-connected road networks facilitate the feasibility of day trips or brief weekend escapades, allowing people to explore new places without significant hassle.
Within this context, Outlet Malls emerge as alluring destinations for such excursions, offering a unique proposition where shoppers can devote a few hours or an entire day indulging in the pursuit of discounted branded goods before conveniently returning to their starting point.
Location Advantage
Outlet Malls frequently capitalize on their prominent visibility along significant roadways. Prominent signage positioned along highways and at exit points serves to capture the interest of motorists passing by, enticing them to explore the offerings of the outlet mall.
This visibility holds paramount importance in attracting a diverse range of shoppers, both from the local vicinity and those from outside the immediate area. Notably, Outlet Malls have evolved into favoured venues for group outings and organized bus tours. The road infrastructure accommodates the transportation of substantial groups of shoppers, including tour buses, thereby providing a hassle-free means for orchestrated shopping excursions.
The effectiveness of road transportation also proves advantageous to the supply chain of outlet malls. Retailers can conveniently replenish their inventory from distribution centres and manufacturers, ensuring a steady stream of products to fulfil consumer requirements.
The establishment of outlet malls frequently triggers a surge in economic activity within the neighbouring region. The enhanced road infrastructure may serve as a magnet for additional commercial growth, encompassing establishments like restaurants, hotels, and fuel stations. This expansion, in turn, generates employment prospects and contributes to tax revenues for the local community.
Forum Value Mall in Whitefield, Bengaluru was one of the first outlet malls in India. As the head of retail at Forum Malls (part of the Prestige Group) back then, I had a chance to be a critical part of this pioneering endeavour. Subsequently, the mall experienced substantial success to the point where it evolved from an outlet mall into a conventional neighbourhood shopping centre. Ultimately, the management of the mall transitioned to Nexus Malls.
Future prospects
The prevalence of Outlet Malls is poised to gain traction in India, riding on the back of increasingly enhanced road networks and the proliferation of improved automobiles. Retailers cannot disregard the reality that outlet malls positioned along highways represent the future, and their engagement with this concept will be essential to effectively connect with their customer base.
Internationally, renowned brands have established a strong presence within these outlet malls, and it’s only a matter of time before a similar trend takes hold in India.
Another crucial catalyst propelling the ascent of outlet malls is the value-conscious nature of the Indian consumer. Indian customers place a premium on obtaining superior value for their expenditures, making these malls an enticing proposition for retailers to captivate their target audience.
Notably, a significant portion of Indian tourists, around 70%, visiting Europe or America, engage in shopping at such malls. This trend is driven by their ability to acquire prominent brands at competitive prices, exemplifying the appeal of these shopping destinations.
Retailers who possess the foresight to recognize the forthcoming improvements in India’s road infrastructure will also grasp the emerging trend of outlet malls in the country. However, for those who fail to align themselves with the direction their customer base is moving toward, alternative options will inevitably be sought out by these customers. It’s imperative for retailers to position themselves strategically in sync with evolving consumer preferences and accessibility to secure a solid presence in the market.
