Expert Opinion Column for Costar 28th January 2022 by Dan Mason, Managing Director, Realm
As the first month of 2022 draws to a close, the retail sector is reflecting on the defining events of 2021 and anticipating what to expect for 2022. COP26 and the climate change crisis have been big on the agenda, with this leading many consumers to move away from fast fashion. That being said, the end of the year had some positive retail stories to tell, particularly across the outlet sector as the value conscious public showed far greater ethical considerations in their buying habits. As a landlord, we have always taken a data led approach to managing our portfolio and the end of the year really showed how consumer behaviours have shifted towards a more considered approach to shopping.
Following the pandemic, our data indicated that consumers were enjoying being able to get back to socialising and celebrating life events which triggered sales in fashion and occasion-wear. However, anecdotally, we believe they are back with a much more prudent mindset, thinking deeply about how long the product is expected to last, whether it’s recyclable or if they would be able to resell it later down the line. A recent report published by the British Retail Consortium stated that “41% of Brits now recognise that recyclable choices and sustainable packaging influence their buying decisions, and 70% are willing to pay a price premium of 5% for sustainable products”. Considerations such as these have become increasingly evident within the outlet sector as brand have to show their commitment to ESG policies irrespective of whether a store is a pop-up, clearance or outlet store because consumers are watching, asking questions and not prepared to throw their principles to the wind in exchange for access to great savings against RRP. Now savvy shoppers are more aware of the impact of their spending behaviour.
In response to this changing context, Realm led a campaign at Livingston Designer Outlet during the Black Friday period last year called “BuyWise Black Friday”, which urged people to consider quality over quantity. This saw an increase of 20 per cent on the average transaction value (ATV) throughout November when compared to 2019. This uplift clearly indicates a shift in the kind of products our more ecologically conscious shoppers are buying. Realm’s data on category figures indicates an increase in health and beauty and homeware sales of 30%, often higher value goods that link to that ATV growth, but also alludes to the rising value of self-care and the preservation or celebration of the home.
Our centres are collaborating with our retail partners to make meaningful steps towards sustainability. Waste is now an enemy and right down to the intricacies of labelling and product packaging, brand partners are aligning product in response to the consumers’ appreciation of minimalism, keeping carbon footprints down and encouraging recycling and reuse.
Another strong theme that our data identified is the continued rise in popularity of athleisure brands and the sports and outdoors categories more generally, as the pandemic has put fitness and general wellbeing front of mind for us all. This has presented a great opportunity for sports brands at our outlet centres with brands including Reebok, New Balance, Champion and Puma taking space at some of our most successful centres. British sportswear brand Castore also saw this as an opportunity, choosing Livingston Designer Outlet as its first ever outlet store.
Further to this, we’ve also seen a significant rise in homeware sales as the requirement to spend more time at home has put taking care of their home environment higher up on their to-do list. This popularity has had a positive effect on interest from interior design brands signing up to take space in our outlet centres.
All in all, what we learnt from 2021 is that our visibility and understanding of the sales data and our resulting ability to adapt as a retail asset manager has enabled us to meet the needs of the more conscious consumer and provide fit-for-purpose shopping destinations in the most challenging of times by identifying the change in behaviour and delivering what online just can’t offer. We embark on 2022 with ambitions for continued growth and evolution of this most ’on point’ retail sector.
Article published in Costar January 28th 2022