02.How they work
What they stock
In Australia, major labels use their factory outlet stores to sell last season’s stock at discounted prices. You might also find surplus stock from the current season, samples, discontinued lines or faulty goods at outlet centres. Generally, though, faulty merchandise is rare — and it should always be clearly labelled.
In the US, some factory outlets stock a large range of ‘seconds’ — items with imperfections. Many brands also have stock manufactured especially for their outlet stores, and generally it’s of slightly poorer quality than their standard retail lines.
In Australia, factory outlets don’t sell as much second-grade stock. A few retailers such as Sheridan, Oroton and Nine West manufacture product lines especially for their factory outlet stores — mainly because they don’t have enough discontinued or out-of-season stock to fill their shelves. But they say this ‘made for factory outlet’ stock isn’t necessarily of a lower quality, it’s just not available in their mainstream stores.
Homewares stores at factory outlet centres — Villeroy & Boch and Royal Doulton, for example — stock discontinued lines, but it’s not just lurid dinnerware sets or outdated designs that end up there. You can find popular patterns, purely because big retailers like Myer and David Jones have to make room for new designs. The outlet retailers also stock some lines that the big retailers have chosen not to buy in.
Who shops at factory outlets — and why?
You’ll find most factory outlet shopping centres out in the suburbs, so chances are you’ll have to invest time and petrol to get to one. Most offer one-stop shopping, stocking everything from sportswear and fashion labels to crockery and electrical appliances, all at a discount of up to 70% or more.
For many Australians, shopping is a leisure activity and going to one of these centres has become a weekend excursion for the whole family. On Saturdays and Sundays, they’re packed — so if crowds are your idea of shopping hell, only attempt factory outlet retail therapy during the week.
Research at the Australian Centre for Retail Studies shows that the average shopper spends one hour and $30–$50 at a normal shopping centre, compared to three to four hours and $200–$300 at a factory outlet centre. If you’re from out of town, you might spend as much as $700.
Shoppers make the journey to these centres thinking: “It’s going to be worth my while — I’m going to get a bargain.” This puts them in a good mood, and when you’re in a good mood you’re in the right frame of mind to buy.
Shoppers are likely to have saved up for their shopping trip and gone in with a ‘what to buy’ list. These bargain hunters are primed and ready to spend time browsing — and they need to.
There‘s a lot of stock and you have to be prepared to pick through it to find what you want. You may not find an outfit that’s in the pages of the latest Vogue, but you can pick up well-known Australian labels like Oroton, Rodd & Gunn, Jigsaw and Pumpkin Patch at a cut price.
There’s no doubt you can save money, but the low prices can tempt you into buying things you didn’t plan to. And buying more items means you may end up spending more, rather than making savings. (See How to bag a bargain for tips on avoiding the traps.)
Supermarkets are notorious for designing their stores to maximise ‘impulse buys’ or ‘unplanned purchases’. Factory outlet centres also roll out all the retailing tricks to get you in and keep you there — after all, the most important factor in determining how much consumers buy is how long they spend in a shop.
Here are some of the tricks used:
Sale signs: We’ve become psychologically programmed to react to signs in shops — sale signs in particular. But displaying any kind of sign is likely to lure a shopper inside a store as it suggests a ‘shopping event’ may be in progress.
Price points: We also respond to psychologically sensitive price points like $99.99 — and you’ll see plenty of them at factory outlets.
- Compulsory browsing: Shopping centres are commonly designed around a 360º pathway so that, unless you double back, you have to walk past every single shop before you reach an exit.
Right is right: Consumers like to touch merchandise, so shops often get better results by laying out the store so that consumers explore it in a counter-clockwise direction. This puts the touching hand, usually the right, closest to the stock. Shoppers have also been found to drift towards, and look to, the right.
The comfort zone: If you’re rummaging through racks for hours, strategically placed couches on the centre thoroughfare can provide some welcome respite — which in turn gives you the energy to keep shopping. You can also use them to offload weary partners and children while the serious business of retail therapy continues.
Fuel stop: Factory outlets want you to refuel quickly and keep shopping. You won’t be settling in for a long, three-course lunch — it’s all quick eats and functional but not-too-comfortable tables and chairs.