Outlet stores and malls might once have implied a low cost or lower end setting, but that reputation largely has changed, especially due to the efforts of operators such as Tanger Outlets. This company, which runs scores of upscale shopping centers that just happen to feature outlet stores carrying famous brands, has been instrumental in changing shoppers’ perceptions of outlet offerings. It determined early on that the thing that brought customers back was an entertaining, appealing atmosphere, so it added food courts and playgrounds to most of its 39 malls—features that tended to be more common in upscale shopping centers.
Now, as markets and retailing continue to change, it also is trying to take the lead in redefining how they shop. At the outbreak of the COVID-19 pandemic in the United States, people sought to avoid crowded spaces and remain home. But they still enjoy shopping for name-brand deals, and Tanger Outlets is confident that eventually, they will want to return to shop in person. In the meantime, to help consumers find enjoyment and also to help the stores located in its malls stay afloat, Tanger has developed a novel, online concierge service. Consumers register online, offering details about their preferred brands, styles, and sizes. If they are seeking a specific item, they can indicate that information too.
Tanger then assigns a personal shopper to the consumer. The shopper visits the physical stores and offers advice on product availability or special deals on offer at that moment. Although these personal shoppers will be physically at a Tanger Outlet site, they can procure items from locations across the country. Then consumers can choose whether to swing by the curbside of their local outlet mall to pick up the items they have selected and purchased, or else have them delivered to their homes.
The added service does not cost consumers or stores anything, even as it provides each side of the transaction substantial benefits. That is, the stores in Tanger Outlet shopping centers (which represent the company’s source of income, in that its revenues come from the stores that pay rent to operate in its outlet centers) receive assistance in increasing their sales, even if fewer consumers are visiting. Along with this novel service innovation, Tanger Outlets gave most retail tenants a break on rent, even suspending payments for several months in some cases.
Consumers obtain expert insights and advice, as well as greater convenience and a means to avoid the risk of in-person shopping. At the same time, they continue to perceive their local outlet mall as a fun and inspiring place to shop, increasing the likelihood that, when they feel comfortable heading out to shop in person again, they will head toward a Tanger Outlet location.
Notably, another retailer offering similar services is positioned in a much different way than outlets conventionally are: Gucci lets consumers interact with service personnel through video calls, while the assistants walk through a newly created, 7500-square-foot mockup of a store that is located in Florence, Italy. This comparison reveals just how intently Tanger Outlets is determined to avoid a low cost or “cheap” image for its shopping centers and retail offerings. Concierge service generally implies high-end, hedonic, enjoyable offerings, and that’s precisely the perceptual link the outlet operator hopes to reemphasize with this expanded service provision.
Discussion Questions:
- Are consumers likely to embrace a concierge service for outlet malls? Why or why not?
- Consider the costs of the service to Tanger Outlets. Is it likely to recoup the costs with higher revenues, in your opinion?
Source: Tom Ryan, “Tanger Outlets Brings Personal Shopper Services Online,” Retail Wire, June 29, 2020; Sam Walker, “The Tanger Outlets CEO Thinks Online Shopping Is Overrated. Now He’s Betting On It,” The Wall Street Journal, July 9, 2020; “Tanger Outlets Launches Virtual Shopper Concierge Service,” PR Newswire, June 23, 2020.