Holiday retail: Outlets could offer more flexible prices
Retailers and outlet malls are decking the halls in anticipation of the holiday shopping season, with sales currently predicted to see slowing growth by the National Retail Federation. Tanger Factory Outlet Centers (SKT), an investor in shopping centers and retail spaces, opened up its 37th outlet property recently.
Tanger Outlets CEO Stephen Yalof joins Yahoo Finance Live to discuss the pricing strategy retailers may feel more inclined to follow this holiday shopping season.
"Our retailer partners really have a tremendous amount of leverage in an outlet platform because they can control their pricing almost daily," Yalof points out. "If they find that the customer is looking for better value or certain products... they flip their store on a regular basis to put the products that sell out front and move the products that might have been on the floor a little bit longer in the back of the store."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
BRAD SMITH: Great to have you on with us as always and get some of what you're seeing from your outlet centers and how you're operating, even the real estate presence that Tanger Outlets has. First and foremost, when you think about the shopping experience that consumers have come to expect, what type of outsized volume or even foot traffic do you typically see holiday seasons and how does that compare perhaps year over year?
STEPHEN YALOF: Well, first of all, thanks for having me back on the show. I appreciate you giving me the opportunity to give you our perspective on the retail-- on retail and the holiday shopping season. So first of all, I'm speaking to you live today from Nashville, Tennessee where about two weeks ago we opened up our 37th factory outlet property here.
And we walked the property all afternoon yesterday and there's tremendous traffic here. And part of it is the newness of the shopping center in the marketplace. But really what the customer is looking for when they shop in one of our shopping centers-- and I spoke to many of them yesterday-- is the everyday value pricing. And I think that really speaks to where the consumer is currently and heading into a holiday shopping season. They are looking for the best possible price on the brands they love and they can get them in our shopping environments.
SEANA SMITH: So Stephen, are you going to be able to weather any, sort of, downturn then if we do see further weakness in the economy because of the consumer pulling back some of their spending? We know inflation, yes, while it is improving, still a massive headwind here for so many Americans. Where does that then though position you in that scenario?
STEPHEN YALOF: Yeah, well, our retailer partners really have a tremendous amount of leverage in an outlet platform because they can control their pricing almost daily. So if they find that the customer is looking for better value or certain products, you know, we've seen it you know in the department stores and the larger specialty store chains, they flip their store on a regular basis to put the products that sell out front and move the products that might have been on the floor a little bit longer in the back of the store. Similarly, in an outlet format, they do the same with pricing. And if they feel that they need to be a little bit more promotional, they can change that cadence on a daily basis and in so doing put a lot of that promotion up front. And that's what the customer sees, that's what they respond to, and that'll get them circulating throughout their store.
BRAD SMITH: And so when you think about the retail square footage that you operate as well, what type of inflows into Tanger Outlet environments are you seeing from some of the largest manufacturers of both high-value, high-cost goods and even on the other side some of the, kind of, lower cost or even medium tier goods?
STEPHEN YALOF: Yeah, I mean it's mixed. So again, you know, we'll talk about the Nashville shopping center that I'm sitting in today, you know, it's a mix of brands from, you know, Old Navy to Ralph Lauren. So you can get every single price point in between.
The stores are filled with inventory. The inventory keeps on coming in. And I think a lot of these retailers are looking for the outlet channel to serve not only as a place to clear that excess inventory, but also as a place to meet the customers where they are.
And I think that that's critically important part of the outlet shopping model these days is that the retailers that engage in this part of our business. And this part of the, you know, the retail ecosystem, we're finding that there's a customer that doesn't shop other channels. And this is an opportunity for them to perhaps get ahold of a new customer and then take them up through their ecosystem.
