The Great Recession has been tough on shoppers' wallets, but it's meant more business for outlet malls. A long car ride to the exurbs of the big cities, where such malls have sprung up, has become a regular routine for many consumers seeking savings on brand-name merchandise, says Catherine Moellering, executive vice-president of Tobe, a New York–based fashion-trend-forecasting firm. On average, outlet-mall shoppers made the pilgrimage nine times in 2010 and spent $165 per trip, according to Linda Humphers, editor in chief of Value Retail News, a trade publication. That's almost a 20% increase from $137 per trip in 2005, she says.
But are shoppers always getting a good deal? Before gassing up your car, here are five things you should know about shopping at outlet malls:
1. Why You Feel the Urge to Buy
Consider the psychology of outlet malls: Developers know that it's one thing for you to walk into a neighborhood mall, browse, and walk out without purchasing anything. But when you travel an hour or more, the pressure to buy is on. That's why most outlet malls are on the outskirts of tourist-friendly cities and at least 30 miles away from full-price retailers, according to Consumer Reports magazine, which conducted a reader survey last year that found 60% of respondents were satisfied with their outlet experience. When you've driven all that way just to bargain-shop, you can't leave empty-handed, right?
Then there are the price tags merchants use at outlet malls, which prominently display a manufacturer's suggested retail price (MSRP) for comparison with the outlet price. It's almost like a car sticker price (and who pays sticker price, except for chumps?). "A lot of the products with price tags that list the MSRP were made strictly for the outlet and have never been for sale in the retail store. Shoppers think they're getting a big deal in comparison to retail prices and they're really not," says Max Levitte, co-founder and CEO of consumer news site Cheapism.com.
2. Call Ahead, Shop Early
Outlet malls operate on a principal of moving merchandise out the door as quickly as possible. First come, first served. So, if you're investing all that gas money to purchase a hot-ticket item, call ahead to find out when a desired store's latest shipment is scheduled to come in, suggests Sarah Lahey, co-author of Frommer's "Born to Shop" travel guide series. Then, shop as early in the day as you can. You’ll get a better selection of items, such as clothes that haven't already been picked over and household goods that haven’t been handled (and potentially damaged) by hundreds of other shoppers. "The Tuesday following a holiday weekend isn't when you'll find the best inventory," Lahey says.
3. Do Your Research
Never assume you're getting the lowest prices possible at outlet malls. If you're prepping for an outlet trip, be sure to check out their Web site a day or two in advance for special offers. In the Washington, D.C. area, for example, visitors to Potomac Mills outlet mall can go to its parent company's Web site, www.simon.com, to print out online-exclusive coupons. Or, stop by the management office at the mall to pick up a coupon book for additional savings on purchases at participating stores. "These are usually given to bus and tour groups, but they are almost always available for the asking," Lahey says.
4. Those Deep Discounts Might Cost You Later
The siren call of outlet malls are great deals on name brands. These discounts average about 38% more than what you'd get at a retail store, Humphers says. However, quality may suffer for the sake of those low prices. Outlets stores such as Saks Fifth Avenue's Off Fifth and Neiman Marcus's Last Call sell leftover merchandise from their full-price stores along with items made for the outlet store, Lahey says.
Here's where things can get tricky: Clothing that's designed specifically for outlet malls in many cases isn't the same quality as similar items sold at retail value, according to a Cheapism.com study conducted last year, which tested the quality of outlet versus retail goods. Some brands even use cheaper fabrics and manufacturing techniques that don’t hold up as well. So, spending $50 on a silk-blend blouse from a high-end outlet store isn't really a deal if you have to replace it a year later. "If you're buying something like a sweater or jacket and the thickness of the material is important to you, then you should consider buying retail," Levitte recommends. (See our story: Cheap Clothing Is a Costly Mistake.)
5. Get the Biggest Bang for Your Buck
Think strategically: If you're looking to stock up on low-priced items for fall or winter, you should visit an outlet mall in early spring, when out-of-season merchandise is likely to be on sale, says Clementine Martin Illanes, a retail strategist with consultancy Kurt Salmon. Shoppers who frequent outlet malls often have this tactic down pat.