Crowds flocking to Tanger Outlets
Leslie Wright/The Arizona Republic
Lisa Williams was ready for the grand opening of Tanger Outlets Westgate.
She searched for online coupons, queued up with dozens of other shoppers and emerged from Coach Factory with her prize — a pink purse embossed with seashells. Price: $134.
Earlier in the season, she would have paid $398.
“I try and seek out bargains,” said Williams, 30, an unemployed nurse who lives in Glendale. “I would never pay full price. It’s just a matter of being savvy with your money.”
Thursday was a Black Friday dress rehearsal at Tanger Outlets, which opened this week in Glendale.
Given the public’s reception, it’s not surprising that it is the first of four new outlet malls expected to open in metro Phoenix over the next year.
Thousands of people packed the parking lots. And some shoppers camped outside stores as early as 8 p.m. Wednesday as Glendale building inspectors were still rushing to issue the last 60 certificates of occupancy for shops.
Arizona’s housing bust and recession doomed planned luxury malls, but outlet developers, such as Tanger Outlets Westgate, are moving in to tap pent-up consumer demand. After four years of coupon-clipping and job uncertainty, shoppers want high-value items at bargain prices.
“They’re making luxury products accessible to the masses,” said Jeff Green, a Phoenix retail consultant. “We’re an aspirational culture.”
Outlet shoppers may be aspirational, but they’re also realistic.
Frank and Sonia Mata, a young couple toting their 8-day-old baby, drove from Tolleson to grab Air Jordan sneakers at a Nike Factory Store.
They plan to spend more than $1,000 on the holidays, but Frank Mata said they will be reasonable.
“We just bought a house and had our third child,” he said. “Will we be careful? Yes.”
At outlets, shoppers can buy discontinued and irregular products but also items made expressly for outlet shops.
At a retail Coach store, Duffle purses can cost as much as $1,400. At Coach Factory stores, prices are 20 to 70 percent less, said Andrea Shaw Resnick, a vice president at Coach Inc.
“Through these factory stores, Coach targets value-oriented customers who would not otherwise buy the Coach brand,” she said.
The made-for-outlet items have the same quality materials and craftsmanship but fewer embellishments and less hardware, Resnick added.
Stocking shelves with well-priced luxury items isn’t always enough to lure shoppers.
Retailers must close the deal with savvy consumers who check out items in a store and then order them online — sometimes while still standing in the store — from websites that undercut prices at brick-and-mortar outlets. Such comparison shopping is called “showrooming.”
To adapt, Tanger debuted a mobile app last year that delivers coupons to shoppers’ smartphones when they’re on-site.
Shoppers’ thirst for bargains will not end now that the economy has started to improve, said Daniel Butler, a vice president at the National Retail Federation.
“The recession changed consumers’ thinking about spending in a more permanent fashion,” Butler said.
Younger shoppers have taken their parents’ lessons to heart, he added.
“Millennials are the most frugal generation since the Great Depression,” Butler said. “They haven’t seen their parents prosper.”
Retail analysts predict an improved but conservative shopping season. The National Retail Federation expects holiday sales to rise 4.1 percent, to about $586 billion.
The average holiday shopper plans to spend $749.51, including gifts and decor. More than half of those purchases will be online.
Shoppers will spend slightly more than the average $740.57 that consumers spent last year, according to the federation’s survey.
Some of those consumers will purchase holiday gifts at outlets, even as they rebuild after superstorm Sandy.
Michele Rothstein, senior vice president for Simon Property Group’s Premium Outlets, said hurricane-ravaged consumers in New York and New Jersey returned to outlet stores within days.
“We are a nation of shoppers,” Rothstein said. “We like to go shopping, and we’re not going to give that up.”
Outlet shopping may be a relatively new phenomenon, but the hunt for bargains has shaped America’s retail industry — and its cities and towns — for more than a century.
In the 1890s, American department stores packed the vendors that used to line Main Street into one swank, downtown destination.
Shopping became an experience, said Jan Whitaker, a Massachusetts-based consumer historian.
New streetcars brought women downtown, where they could socialize and spend the day at the department store.
The main draw? Deals. In the late 19th century, Americans weathered an extended depression.
A bit like modern outlet shops, department stores bought goods directly from manufacturers at a lower cost, Whitaker said.
When the post-World War II generation moved to the suburbs, retailers followed, building open-air and, later, covered malls.
Tanger opened the nation’s first outlet mall in Burlington, N.C., in 1981, during another economic downturn.
In the 2000s, open-air malls resembling traditional Main Streets became popular again.
More outlets coming
Tanger in Glendale is the first of several outlet-mall projects headed to the Valley to join Tanger Outlets Westgate and the Outlets at Anthem.
The others are:
Fashion Outlets of Scottsdale. Macerich, Westcor’s parent company, is developing this mall with AWE Talisman Co. at Loop 101 and Scottsdale Road.
Phoenix Premium Outlet Center, by Simon Property Group, will open in the spring at Wild Horse Pass Hotel & Casino, off Interstate 10 just west of Chandler.
Tanger Outlets plans to build another mall at Loop 101 and Indian Bend Road, near the Talking Stick Resort.
Rothstein said Phoenix Premium Outlets executives are “counting the weeks” until the spring opening of their mall at Wild Horse Pass.
That many outlet malls in one metro area may seem like too much — the Outlets at Anthem are just off Interstate 17, about 32 miles from Westgate.
Although there will be some cross-over among the malls, the Premium Outlets will offer different stores and primarily draw shoppers who wouldn’t travel to Tanger.
The mall has announced Saks Off Fifth as its first tenant.
Wild Horse Pass is a tourist destination and will draw its own shoppers, Rothstein said.
“Each has its own reason for being,” Rothstein said. “There are more outlet shoppers than there ever have been before. There are more educated consumers than ever before.”
Outlets at Anthem Manager Sara Zappia said the new Tanger mall is a “game changer.” But she expects the Anthem outlets to continue to draw loyal customers and out-of-town tourists.
Oversaturation of the outlet market could be an issue, especially for the last two malls, both set for Scottsdale, Green said.
Paul Swinand, a Morningstar equity analyst who covers luxury stores, is not convinced that the national outlet expansion will continue indefinitely.
At some point, he said, shoppers will become numbed by another “Under Armour” outlet store. “We don’t really know how it’s going to play out,” Swinand said. “We don’t know that if unemployment went down to 4 percent, if people will want to go to the real Saks.”
However, traditional luxury malls are not being financed, leaving outlet centers to fill the gap, some experts said.
“I just think the way we shop may have changed,” Green said.
Outlet malls can spring up quickly, with lower build-out costs. Tanger opened its doors nine months after crews broke ground.
Generally, outlet-mall stores have fewer design flourishes because shoppers are more focused on bargains than the setting. “You just need a box,” Swinand said. “Then, of course, there’s demand. Recessionary people are looking for bargains.”