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Inside the ‘Online Mall’ Simon has Created for its Outlet Brands

Simon and Rue Gilt Group's Shop Premium Outlets marketplace is positioned as an online mall.

A lot of new marketplaces have sprung up in the last few years, but even among that now dense crowd, Shop Premium Outlets (SPO) stands out. The first hint as to why comes from the platform’s owner — mall operator Simon, with the added expertise of ecommerce authority Rue Gilt Groupe (RGG, encompassing Rue La La and Gilt) in which Simon is now an investor.

Outlets have been slower to move online than other verticals, not least because they tend to be a lower priority for most brands, but for SPO they represent opportunity.

Woodbury Commons in NY, one of Simon’s Premium Outlets locations.
Woodbury Commons in NY, one of Simon’s Premium Outlets locations.

“First and foremost, Simon cares about happy, healthy retailers because those are their tenants,” said Neel Grover, CEO of Shop Premium Outlets in an interview with Retail TouchPoints. “They know that ecommerce is a big part of that so we’re trying to help brands where they may not have the capabilities to do something themselves or it may be on their roadmap for 12, 24, 36 months down the road.”

Because of Simon’s stake in the brick-and-mortar success of many of the brands on SPO, the way the company has approached its marketplace is very different.

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We share a lot of the data and we move consumers into their full-price environment,” explained Grover. “I’ve had a couple of brand CEOs literally say this is the most perfect thing for them because they can remove that [discount] product off their site, or not even have their own online outlet, because they’ve seen their consumer move downward and not move back up. And because we’re marketing to a different consumer, we open up our customers to their brands. The brands are able to drive sales, move the [off-price] inventory and introduce [those customers] into full-price because [we enable] the brand to market to them directly. It’s a very symbiotic relationship that no other marketplace does today, not a single one.”

Grover would know — he’s spent the last 20 years helping build some of the biggest marketplaces in the U.S., starting from a time when the model was much less common. In the early 2000s he was President and CEO of Buy.com, which he shifted from a primarily first-party platform to a marketplace that eventually became the third-largest in the U.S., after Amazon and eBay. Buy.com was acquired by Japanese marketplace juggernaut Rakuten in 2010; Grover ran that company’s North American business for several years before joining a private equity firm that bought fashion site Bluefly.com, which he helped turn into a marketplace and then operated.  

“I’ve done four marketplaces before; I wasn’t [really in the mindset] to go do another one, but SPO offered the opportunity to do all the things you could never do being a pure-play online retailer because of the Simon side of things,” said Grover. “SPO is an open sandbox, so much of the stuff we’re doing is blue water. We get to think of solutions that help the brands and help the consumer in so many different ways that haven’t been done.

Those differentiators include:

  • A mission to disrupt the world of value shopping by bringing the historically under-indexed off-price category online;
  • Making brands the heroes of the experience and giving them more control over their presence and how it’s marketed;
  • Robust data collaboration to make the partnership mutually beneficial;
  • Leveraging Simon’s physical presence to offer fulfillment options and experiences that online pure-plays can’t;
  • Actively finding ways to move customers from SPO into a brand’s own ecosystems; and
  • Helping to “light up” outlet inventory, much of which isn’t already available online.

The Goal: Disrupt the Online Value Shopping Market

Shop Premium Outlets first launched in early 2019 as an affiliate site, where consumers could discover products but were redirected to each brand site to complete purchases. But later that same year, Simon teamed up with RGG and entrepreneur Michael Rubin, who is Executive Chairman of RGG as well as Founder and Executive Chairman of another enterprising ecommerce company, Fanatics. The partnership was described as a “multi-platform venture dedicated to digital value shopping,” in which SPO would play a central role.

The online value shopping market is a massive opportunity ready for the next disruptor,” said Rubin at the time of the deal. “This transaction brings together the leaders in online and physical commerce to deliver the excitement of outlet shopping online to consumers and innovative solutions to our brand partners.”

Enter Grover, who brought along with him a dozen or so colleagues from previous ventures and turned SPO into a marketplace built on the Mirakl platform. Among other things this allowed for the creation of a unified shopping cart so shoppers can buy directly from the almost 250 brands featured on the site.

Shop Premium Outlets advertisement at a Premium Outlets location.

We get the best of both companies — we get the benefits of the vast consumer database of Rue Gilt Groupe, all the experience they have in flash sales and their relationship with thousands of brands,” said Grover. “And the best of everything from Simon, utilizing their great relationships with these premier luxury brands as well as their millions of customers who have signed up across billions of shopping visits each year at their locations.”

It’s important to note that SPO is not limited to outlet product nor to Simon’s Premium Outlets tenants. The site includes a range of brand offerings encompassing on-sale, clearance and outlet product, and while not all of those brands are Simon outlet clients they are all premium or luxury tier.

The platform is commission-based and most orders are fulfilled via drop shipping, although BOPIS options are a growing offering. SPO also has access to RGG warehouses as part of the Simon partnership, so the platform is now also doing some managed fulfillment for brands and shipping on their behalf.

“[Marketplaces are] a great thing for consumers, but it can be tough for brands because they want to own that relationship, and many feel like they’re just helping strengthen [sites like] Amazon every time they work with them,” said Grover. “Because I dealt with that ‘Amazon effect’ and competed with them for so many years, I really wanted to do things at SPO differently. I like to think of SPO as less of a marketplace, more of a shop-in-shop location or an online mall. We want to work with the brands directly and really extend that brand presence from what they do on their own site and their own experience onto our platform.”

Brands are the ‘Heroes of the Experience’

Dior's storefront on Shop Premium Outlets
Dior’s storefront on the Shop Premium Outlets site.

When SPO launched, Simon CEO and President David Simon promised that “the brands will be the heroes of the experience and will not get lost in the crowd.”

SPO is delivering on that promise — each brand gets its own “storefront,” just like a physical mall, where they use their own creative assets. Brands also get to choose how their presence on the platform is marketed or whether they even want it marketed at all. “Some of our brands don’t want to be promoted and just want to be here when a consumer looks for their brand,” said Grover. “Certain brands want to be behind a registration gate. All of that is totally fine with us — we’ve got our own big brand that we’re continuing to build, so we just push the customer there.”

Indeed, the SPO brand drives most of the marketing, which in addition to all the typical digital channels also includes promotion to Simon’s Premium Outlets store customer database and outdoor advertising at Premium Outlets locations.

SPO isn’t Stingy with its Data

“Being the marketplace is great, because you own a lot of data, you learn a lot about the customer and you’re helping the brands because you’re driving sales for them,” said Grover. “It’s definitely beneficial for brands, they’ve got to be where the traffic is, but the marketplace itself is benefiting additionally — just look at Amazon. We share a lot of that data with the brands, and in many cases the brand can actually remarket to that consumer back to their own site as well. So we really become a collaborative partner with our brands, unlike any other marketplace.”

That collaboration extends beyond data sharing to consumer insights, with SPO regularly working with brands to analyze traffic, performance and anonymized competitive data to optimize results. Grover said loyalty integrations also are on the horizon, which will expand these data-sharing initiatives even further. “We’re trying to really help you not only to sell better on our site but sell better on your own site in your own ecosystem,” said Grover.

Fulfillment Options Not Normally Available to Marketplaces

Access to physical retail sites is an asset that can’t be underrated, and Simon is leveraging that advantage to the fullest. Last year, SPO became, Grover believes, the first marketplace to launch buy online, pick up in-store (BOPIS) at brands’ stores (not, as with other marketplaces like Walmart and Best Buy, at the marketplace banner.) And the service isn’t just offered at Premium Outlets stores; in some cases, brands opt to let consumers pick up their off-price purchases at full-price retail locations, which are typically more conveniently located and plentiful than outlet stores.

SPO Wants its Customers to Shop in Other Places

“We want to drive you into that store, because we care about the brand’s overall health and also, of course, because we’re owned by Simon,” said Grover, but that ambition isn’t restricted to Simon-owned properties. Another, broader aim is to get those customers into brands’ full-price funnel, digital or physical.

“Because we’ve got on-sale product from full-price stores, we’re dragging people into their full-price environment,” explained Grover. The aforementioned data sharing also enables brands to engage and potentially even shift SPO customers into their broader ecosystem. Some brands also double down on these efforts by offering exclusive off-price assortments on SPO.

Outlet Stores Offer a Unique Inventory Opportunity

Outlet locations also offer a prime opportunity to bring new product to consumers by fulfilling from stores, because “outlets have a tremendous amount of inventory that, for the most part, is not lit up,” said Grover. “I think of it almost like our own private version of Google — there’s all this inventory that nobody else is able to light up and that we can make so much more convenient for consumers to buy.

Shop Premium Outlet's livestreaming.

“Look at the retailers that are doing so well, like Target and Nordstrom using store inventory to fulfill ecommerce orders,” he added. “Brands want to get there, but they’re not there yet, so we’re trying to leapfrog and help them open up that store inventory, especially because we’ve got a playground that no one else can tie into.”

One unique way SPO is doing this is with livestreaming events from Premium Outlets locations. The sessions are filmed in the physical store with store associates showcasing products, and then hosted on SPO where customers can make purchases directly.

“We’ve done [livestreams] all over, and it’s really fun because with every store there’s different inventory and different scenery,” said Grover. “Now brands are asking to do it more often, because they’re seeing the halo effect of driving consumers into the store as well. At the end of the day, it’s about driving that store environment, driving that excitement and ultimately driving sales.”

As far as Grover is concerned the sky’s the limit for SPO, and he’s not stopping at off-price: “We’ve got 70 outlets around the country and hundreds of malls that eventually we’ll be tying into and doing things with. We’re just scratching the surface right now.”

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