Outlet centres have so far recovered faster than other retail formats, the latest figures from specialist operator Neinver show, bringing hope that the effects of the coronavirus pandemic will soon be behind the sector.

The company said that during the third quarter of 2020, when its centres were able to operate with less disruption as restrictions were eased or lifted, sales from tenants across its portfolio were at the same levels as in 2019 in some assets, bouncing back as they were allowed to trade, with some centres even outperforming 2019 results. It is a good sign for the company, which counts many of the world’s top retail brands among its tenants.

The past year, with all the implications of the coronavirus pandemic, has shown how important communication, flexibility and being able to adapt quickly are in this operator- retailer relationship, Daniel Losantos, Neinver’s CEO says.

‘Rather than a company which simply builds and manages outlets and collects rents, we see our leasing and retail team as a “partnership building team” with aligned interests, and we steadily serve the brands that operate in our centres, advising our partners on their plans in a smart and responsible way.’

With the Covid-19 outbreak, the company followed up with each brand partner individually, not only to reach agreements regarding rent relief but also to discuss strategies on how to move forward. Demonstrating real innovation and fine-tuning its proposition, managing risk and finding new opportunities for brands – and for customers – has been key in these uncertain times.

Changing habits
As it looks forward to further easing of restrictions across the continent, Neinver is conscious that its customers’ shopping habits have evolved. ‘Consumers were changing their shopping habits anyway and were becoming increasingly driven by leisure and entertainment offerings, varied services and food alternatives, moved by a desire to enhance their shopping experience,’ Losantos says.

Most activities related to leisure, experience and travel had to be temporarily interrupted in the last year, and the company expects a flood of interest as people begin to venture out once more.

Indeed, the company has been strengthening its shopping experience by adding services and leisure elements. At its outlet centre close to Milan – Vicolungo The Style Outlets – Neinver recently opened the Kinder Joy of Moving Park, a 1,700 m2 space for children billed as a recreational and motor skills development playground.

This unique project was developed by the Ferrero Group and supported by the Municipality of Vicolungo, with whom Neinver joined forces to bring the project to reality. ‘In a post-Covid era, consumers’ appetite for human connection and social experiences will probably become even stronger than before,’ Losantos says. He predicts that those centres with a strong food and beverage focus and with a great mix of fast casual dining and local signature names will provide an extremely attractive and compelling proposition for customers.

For Neinver, the pandemic has dramatically accelerated trends that were already unfolding, albeit at a much slower pace, before the crisis, especially those related to digital technologies. Many consumers who previously did not use digital channels to engage with brands, such as baby boomers, were pushed by the pandemic to make a digital transition they otherwise might not have needed to make. Moreover, consumers are increasingly bombarded with year-round deals, online and off.

‘As the customer journey has definitely changed, we need to give customers better reasons to come and visit us and need to engage with them much earlier in the customer journey,’ Losantos explains.

With this in mind, the company has been investing in a digital acceleration plan, deploying new technologies to provide a more convenient and efficient shopping experience. It has launched new services such as virtual shopping and shopping by appointment and is working on a click and reserve to accommodate the shifts in customer behaviour and adapt quickly to pandemic restrictions. Moreover, this gave retailers the opportunity to sell their piling stock. In fact, over 200 retailers have joined the virtual services at least in one of the outlet centres.

It has also been investing in its customer knowledge tools to gain insights to keep pace with customer expectations. ‘If you don’t know your customer, it is extremely difficult to reach and engage with him or her. We are using data to better understand our catchment and consumer lifestyles and identify opportunities to better shape our offer and target our potential customers, while supporting brands’ strategies with detailed insights,’ Losantos says.

The company is also working on a new loyalty programme which will maximise customer knowledge data to deliver exclusive, personalised and relevant content and benefits to its customers. ‘This will ultimately improve their experience and contribute to turning our visitors into ambassadors while allowing retailers to stay on top of constant changes in consumer behaviour,’ Losantos adds. It is also in the process of developing new websites for its centres which will enable digital-savvy users to connect through new virtual services and news on everything which is going on in Neinver’s centres and the stores.

‘All this is part of a comprehensive project that combines different innovative technologies and integrates them to unify all the information and reach more consumers in an efficient way. This accurate data and analysis of consumers can be leveraged to better advise our tenants and provide them with new indicators that they couldn’t obtain otherwise. It also allows us to send customers communications via one clear omni-channel strategy,’ Losantos says.

Neinver is integrating these new technologies in a custom CRM solution, which also includes geolocation systems, mailing automation and pop-up notifications, which it says are also powerful ways to track socio-demographic data and information about shopping behaviours.

What customers want
Keeping up with what customers want is central to Neinver’s mission. The company puts itself in its brands’ shoes, working with them to stay relevant, and helping them to engage with shoppers to build loyalty. This involves being flexible, keeping up with trends and listening to the shifting demands of their customers. ‘As operators, we are not focusing on price and brand mix only, but equally on selling emotions, paying attention to every detail, engaging with consumers, who increasingly look for authenticity,’ Losantos says.

Neinver’s aim is to attract the latest and newest brands to its outlets and keep the tenant mix as relevant and appealing to the catchment as possible. For example, Las Rozas The Style Outlets, its first and smallest centre, specialises in sports and outdoor wear - a model which has proven hugely successful. Centres such as Roppenheim The Style Outlets or its Italian centres focus on a premium offer whilst some of its Spanish centres combine aspirational and premium brands to adapt to their catchment.

There are also a number of shopping trends which Neinver expects will continue as people return to its centres en masse. Consumers were already moving towards sports and outdoor wear but the lockdown and working from home accelerated this trend towards an increasing casualwear lifestyle, it says. Formal wear with business attire has lost ground to some of the other categories.

‘Our brand offer has a strong focus on activewear and leisurewear, with brands such as Adidas and Nike present across all our European portfolio. Across markets, we see that the sports sector is the most demanded by customers: some brands have even outperformed last year’s sales levels,’ Losantos says. While investing in homes had been declining before the pandemic, that trend has been reversed. Everything related to the home such as domestic appliances, textiles, small furniture and decoration, among others, is already growing double digits and is expected to continue in the same vein.

Sustainability in mind
As well as straightforward consumer trends, the pandemic has highlighted the importance of working together to face global challenges, requiring a clear commitment from business towards environmental and social issues. Neinver has found that both brands and shoppers are increasingly conscious of sustainability.

This is reflected in some brands’ commitment to producing clothes more sustainably, in some cases even making them from recycled materials. ‘Gradually, our outlet centres have started receiving several of these products and we expect to see more and more of them,’ Losantos says.

Moreover, Neinver has been investing in and pushing green mobility options across the portfolio, and is developing a green mobility plan for each of its centres. Currently, all of them offer parking places for bikes and most of them include charging points for electric vehicles. Various initiatives to promote green mobility such as ad-hoc discounts for electric vehicles rental are also available for visitors. ‘The pandemic has also increased consumers’ focus on brands that demonstrate a strong social commitment and support the local communities where they operate,’ Losantos says.

In response to this, Neinver launched an initiative at all its outlet centres in Europe to support art by promoting local talent, and to excite consumers with an explosion of ‘optimism, colour and energy’. The campaign is running until the end of Spring under the slogan [RE] IMAGINE THE FUTURE TOGETHER and includes several activities, from creative development of local artists in the centres themselves, with posters and decorations, art installations and workshops, to initiatives supporting the community and promoting sustainability and respect for the environment.

Safety first
As brands reopen and customers return to Neinver outlets once again, one of the major concerns has become ensuring the safety of customers, tenants, and staff. ‘We had to be fast in giving visitors a true sense of safety and confidence to be able to shop in spacious retail environments,’ Losantos says.

In response, Neinver launched the ‘Shop Safe, Stay Safe’ blueprint to prioritise the health and safety of its customers and employees, and put in place certified Covid-19 hygiene and safety protocols and procedures across its European portfolio. The measures include hygiene stations throughout the centres, enlarged cleaning and maintenance teams, reinforcement of instructions to visitors, with special emphasis on compliance with social distancing, and limiting or adapting some services to meet safety requirements. The company also worked closely with its brands to ensure that proper protocols are in place and that the reopening of the centres would be made as easy as possible.

Long-term view
As it looks forward to a positive future, Neinver says it will continue to focus on the niche outlet industry. ‘Our value proposition combining off-price, appealing brands and relaxing environments has always been a very strong competitive advantage in the retail landscape,’ Losantos explains.

Last November the company opened its Amsterdam The Style Outlets, the first outlet centre in the greater Amsterdam area, which it developed alongside Nuveen Real Estate. ‘Despite Covid-19 and all the constraints, neither the construction stopped, thanks to appropriate safe procedures, nor was the leasing interrupted. In fact, we signed several important leases during lockdown, which proves the quality of this project,’ Losantos says.

This €110 mln development is built in a waterside setting, with an eco-friendly environment whilst following the Dutch architectural style, completely integrated with the design elements of its specific location in SugarCity, one of the fastest-developing areas in the Netherlands. It features 19,000 m2 of GLA and more than 100 stores, with some brands debuting for the first time in the Dutch outlet market. Top brands at the centre include Adidas, Björn Borg, Dstrezzed, Geox, Guess, Karl Lagerfeld, New Balance, Nike, O’Neill, Petrol Industries, Puma, Salomon, S. Oliver and The Kooples, among others.

With customer safety, satisfaction and experience at its heart, Neinver is confident that the return to normality signals the beginning of a very positive period for its centres. Losantos says: ‘Since 1996, the year in which we opened our first outlet centre in Las Rozas, in Madrid, we have been working arduously as brands’ partner, helping them grow their business throughout Europe. ‘It is this – our partnership approach, commitment and experience – which will allow us to continue leading our outlet niche in the market.’

About NEINVER
NEINVER is a Spanish multinational company specialised in managing, developing and investing in commercial and logistics properties. The leading manager of outlet centres in Spain and Poland, and the second largest in Europe, it has two proprietary brands: The Style Outlets and FACTORY. Founded in 1969, Neinver manages 18 outlet centres and five retail parks including active pipeline and more than 800 brands in six European countries: France, Germany, Italy, Poland, Spain and the Netherlands. The Neinver Group is the only company in the industry in Europe that has earned sustainability certification for all the outlet centres it operates.