From the Dubai Outlet Mall to international outlet villages such as Britain’s Bicester or Milan’s Fidenza, the world of discount shopping has, over the past five years, shaken off its bargain basement reputation in favour of high-end shopping experiences that are destinations in themselves.
And just as the online fashion site Net-a-Porter.com has transformed online designer shopping since its launch in 2000 (it is now worth an estimated Dh12.7 billion), its sister site TheOutnet.com, which celebrates five years in business this year, is a phenomenon in the discount arena. It is a business that has revealed the changing status of the outlet customer, the need to pin down and target that demographic with utter precision – and the importance of building a strong partnership with suppliers.
“At the beginning, because there wasn’t as much knowledge about the discount world, I think everyone thought, well, the customer is young and she wants a bargain, and she doesn’t have a lot of money, and it was a recession,” says Stephanie Phair, president of The Outnet, in the company’s immense, airy offices in West London.
“And there’s certainly that young aspirational customer, but I think what we realised quickly is she’s just got a different mindset: she doesn’t necessarily need the latest thing off the runway. She’s high-value, high-household income, about 35, and travels – and that tells you what kind of a customer she is: if she can travel nine times a year for fun, she’s probably already spending money on lots of other things.”
In other words, The Outnet has stumbled upon a long-neglected market: the wealthy, fashionable woman who doesn’t like throwing money away for the sake of a brand name or a new-season shoe.
Surprisingly, this concept translates well here, with the UAE – traditionally known for its love of luxury products – The Outnet’s best performing market in the region. Although the love affair with brands still exists with UAE shoppers citing the Christian Louboutin, Alexander McQueen and Yves Saint Laurent among favourites from the 250 or so designers featured, with other top sellers including Diane Von Furstenberg and Michael Kors.
Such has been the success of the brand that it offers almost as high-end an experience as Net-a-Porter.com. With its dedicated editorial, shoots and exactly the same uber-efficient delivery experience that has blasted Net-a-Porter and its menswear shop Mr Porter over the finish line, it has triumphed while other ecommerce sites are still stuttering at the start.
“I think our biggest differentiator is our editorial,” explains Ms Phair. “That is not something that existed in the discount space, because it was thought that, hey, if you’re getting a good price you’re on your own. Whereas we say, look, this is expensive product and it’s good designers, and you need a bit of handholding. And I think that’s probably differentiated us: our fashion shoots, our how-to-wear videos, our social media.”
This focus on the experience of shopping, perhaps the most important factor in successful retail, has not only retained customers but also helped The Outnet to build close relationships with its brands and designers – which, in turn, brings more customers to the site.
“Where brands were perhaps worried was: ‘is this going to be detrimental to my image?’ And the image is high-end and elevated, and we’ve done just that,” says Ms Phair. “It’s ‘service’ in 22 languages, 24/7, beautiful packaging, shopping whenever, wherever, on mobile, on tablet, on desktops – and luxury is also all about shopping wherever you want whenever you want.”
It might seem counterproductive for brands that sell their full-price products on Net-a-Porter to foster such a close relationship with a website that will sell them for half the price. But for Ms Phair, who now employs 120 staff, it is a simple acknowledgement that the internet has changed how we shop forever.
“My explanation to the brand is that the internet is here to stay. Your customer is savvy. You can’t hide stuff away from her. She will find it. So you might as well put something forward that is beautiful and enhanced and speak to that customer and elevate your brand.”
When you look at the numbers you can see why brands are keen to cosy up. Since launch, The Outnet has sold 9,663 Hervé Léger bandage dresses alone, 179,000 pairs of shoes and altogether has had nearly 2.2million orders placed.
Indeed, so close is the brand relationship that to celebrate the fifth anniversary, 17 labels, including Chloé, Oscar de la Renta, Alexander McQueen and Nicholas Kirkwood have re-released iconic pieces from past collections in a limited edition. Many brands even make clothes specifically for The Outnet, which Ms Phair says are of exactly the same quality as the new-season originals.
“I think in the discount space we’re going to see quite a lot of consolidation, because brands will choose to work with certain partners and not others,” she adds. “Luckily they’ve chosen to work with us.”
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