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How Outlet Malls Have Convinced Shoppers into Thinking They're Getting a Sweet Deal

Are America's 55 million outlet shoppers scoring great deals on expensive brandname products, or getting less than they're bargaining for?

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Mall designers today strive to do everything possible to anticipate and stimulate desire. How they do this varies, but as one prominent mall developer observed, "The more needs you fulfill, the longer people will stay." It is unlikely that many mall prowlers would claim they need to be entertained, but they may sense that need when a fashion show or promotion is announced through the mall's loudspeaker system. The show captures attention and entices shoppers to forget their promise to themselves not to linger or, worse yet, overspend. Thanks in part to such innovations, the typical visit to a mall extended from twenty minutes in 1960 to nearly three hours in 1979.

A team of business scholars recently observed that "making efforts to improve patron satisfaction with mall attributes will improve the hedonic shopping value patrons believe they get from a mall visit and will increase the likelihood that they will visit again in the future." Plainly put: Build it nice, treat them nice, and customers will stay longer and return more often. No quibbles there. But what these scholars failed to recognize -- and what discounters know -- is that customers staying longer or coming more frequently does not necessarily translate into their spending more money.

The zombies in Dawn of the Dead wandered the mall for days in numb fascination, never once pulling out a credit card. The same is often true of real-life patrons for whom the mall has become a point of congregation but not necessarily commerce. Senior citizen "mall walkers" come for a brisk mid-morning stroll and then commune for hours over a cup of coffee in the food court. Teenage "mall rats" spend entire weekends roaming in packs. (Mall managers complain of becoming a "babysitting service" for too-young-to drive teens who are all but abandoned by their parents.) Stay-at-home parents use the mall as an escape hatch for restless toddlers. The more enchanting, the more inviting, and the more comfortable the mall, the more powerful its draw as one giant living/play room. For this reason not all outlet malls are overly concerned with the "hedonic impact" of their environments. Rather, many outlet developers follow what might be called the "Golden Arches" approach to social engineering.

At McDonald's and many other fast-food restaurants, the lighting tends to be unflattering fluorescents, and the seats are bolted to the floor at an awkward distance from the tables. The purpose of this is not to prevent theft of the chairs, as many think, but to discourage elders, teenagers, and other undesirables from getting comfortable and congregating for hours over a small coffee, or an order of fries. Discomfort does seem to keep the customers churning; on average, fast-food patrons spend only eleven minutes at their tables. (The optimal fast-food customer -- as defined by the fast-food industry -- takes no table time at all but does a quickie through the drive-through.)

Outlet malls, too, minimize amenities to discourage wasteful lingering. You are not likely to stumble on a fashion show, listen to a chamber orchestra, or enjoy a gourmet meal at an outlet center. But that doesn't mean you won't spend a lot of time dispersing your paycheck. On average, shoppers spend nearly 80 percent more money at a bare bones outlet mall than they would at a fully loaded regional mall. A popular rationale for this seeming paradox, in addition to the inconvenience hypothesis, is that outlet shoppers spend more to save more on things they really need. This theory certainly makes sense. What better place to stockpile staples such as underwear, T-shirts, sheets, and other basics than the outlets?

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