Retail vs. Outlet Store: What is The Difference?

retail fashion store

Outlet malls are gaining a lot of popularity in the U.S, as well as other parts of the world. People flock to outlet stores for the chance of buying designer products at a cheaper price. However, most of these people cannot differentiate between a retail store and an outlet store.

Both have a few similarities, but a lot of differences. Moreover, each offers a distinct experience for both employees and shoppers. Therefore, it’s important to understand these differences if you want to become wiser when making your purchases. 

Below we list the main differences between a retail and an outlet store. 

Top Four Main Differences

1. Function

The major difference between a retail and outlet store lies within the function each serves. An outlet mall allows shoppers to enjoy daily bargains, steep discounts, and lower prices. Initially, retailers used outlet stores to sell damaged products or products at cheaper prices. However, outlet malls have become a one-stop-shop for shoppers who desire to buy quality designer products at an affordable price.

A retail store, on the other hand, sells quality commodities, but at a standard retail price. That means shoppers don’t get a lot of discounts, except if there is a mega sale or a special event. Here, customers will find just what they are searching for when they go shopping for designer products. And, high demand translates to high profits in retail stores.

For instance, a Nike dealer in a retail mall can stock 100 pairs of Air Jordan shoes, and sell them for $350 each. Conversely, and outlet mall can stock 400 pairs of these shoes, but sell each for $80. Outlet malls understand that the reduced selling price will significantly increase sales.

2. Quality

If you’ve ever shopped at both of these stores, then you can agree that they do sell the same products—but these products differ in terms of quality. Mostly, major retailers rely on outlet malls to sell out-of-season products or overstock commodities—and they do this at a cheaper price. These commodities are of high quality—it’s only that the retailers don’t have the space to stock them.

However, it’s important to note that some of the products sold at retail malls are made of low-quality materials compared to products sold at retail malls. This mostly happens when a major brand name decides to franchise at an outlet mall. Also, it’s not uncommon to find damaged or defective products at an outlet store. Most of these products can be old or new goods, but it has some manufacturing defects or irregularities. Representatives at Riga designer outlet, Via Jurmala share that this is common at outlets that don’t deal with cut-price name-brand products. Rather, these malls sell products specifically made for outlet malls, and you cannot find them at any other retail location.

3. Location

This is another major factor that differentiates retails and outlets. Typically, outlets are found in far-flung areas. Most people who love shopping in outlets claim that they have to commute out of their neighborhood to access an outlet mall. The primary reason behind their remote location is because rent is a bit cheaper in areas without a high population.

This is one area where retailers outdo outlets, especially because of convenience. Mostly, retail shops are found in malls, airports, or other areas with a high population. This can be a big town or a major city. Also, it’s important to understand that retailers tend to maintain a safe distance between the merchandise they sell and the same merchandise sold at a cheaper price at outlet stores.

With these realities, you will need to consider several things if you’d like to operate an outlet store. The first thing is the location. If your shop is a branch of a major brand-name, you will have to locate your store far away from major retailers within your city limits. This is essential as it prevents unfair competition caused by differences in price.

However, if your outlet is not a brand of a major name-brand store, but you will be selling some major brand-name products, you can still open it within your city. This will allow you to compete with major brand-name retailers.

4. Type of service

Typically, retails can be full service or limited stores. That means suppliers can restock the commodities sold there. Outlets, on the other hand, generally sell discontinued, damaged, or off-season products—which has confused a lot of shoppers in the past few years. Moreover, it’s hard for suppliers to restock the same type of products.

Understanding the Difference

If you decide to shop at an outlet, ensure that you carefully check each item before purchasing it. Search for any defects in closures and stitching. Moreover, don’t forget to read the labels. The location or factory where the commodity was manufactured can give you a major hint, in terms of the quality of the product.

Also, take your time to try the products before purchasing them—especially if you are buying clothing items. Items that don’t fit well are an indication of shortcuts that were taken during the production of that item. Furthermore, ignore the sales tag that indicates the original price. With this, you won’t be easily convinced by a made-up deal.

If you are not sure of anything, ask! The sales representatives at outlets will be willing to give you the information you need about the merchandise that you want to buy. Although you might not get a product of the best quality at outlets, it doesn’t mean that you cannot find hidden gems. At the end of the day, you will be surprised by what you get the next time you go out for outlet shopping. What you need is to be extra careful to avoid buying products with defects.

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