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The Psychology of Outlet Malls – Driving Far to Save Money
When I think of “outlet malls,” I think of making a long drive from an urban/suburban area to a shopping oasis in a rural area. Once there, one typically finds a jumbled pile of brands advertising high quality items at low cost (“Get the best brands at the lowest prices!”). For example, outside Columbus OH, there’s Prime Outlets – Jeffersonville – about an hour’s drive from Columbus, Cincinnati, and Dayton. Outside Philadelphia PA, there are the outlets in Reading and in Limerick, both of which are about an hour’s drive from Philly. And judging by this map showing the locations of Tanger Outlets throughout the US, the average drive time from any given Tanger Outlet to the nearest major municipality appears to be about an hour. Hmmm.
Assuming this is a real pattern, why are outlet malls located like this? Because the cost to develop such properties in low population-density areas is less than the cost to develop in high population-density areas? Possibly. Because locating an outlet mall between two (or more) major metropolitan areas allows an economy of scale when promoting itself and its brands? Perhaps. Because market research predicts an outlet mall can entice some percentage of the nearly-catatonic drivers moving between two (or more) major metropolitan areas? Maybe.
Another possible explanation for the success / popularity of outlet malls can be found in the social psychological literature: cognitive dissonance and one of its outcomes, attitude change via dissonance reduction. As hinted at in Ellen Shell’s recent book, Cheap: The High Cost of Discount Culture, the act of making a substantial effort (e.g., a two-hour round-trip to buy GAP jeans at an outlet mall) to purchase an item may be justified – either consciously or sub-consciously – by changing a dissonant or conflicting thought / emotion. Consider the following:
- I don’t like to drive an hour to go shopping
- I like to wear GAP jeans
- I like to buy GAP jeans for less than full retail price (i.e., $50 at the outlet)
Assuming there is tension – dissonance – amongst these thoughts and feelings, one way to reduce this tension is to reconsider how I feel about traveling to this location. In other words, because I don’t usually like to drive an hour just to go shopping, there MUST be a good reason for why I did so. Enter the psychological mechanism of dissonance reduction! I may feel more positive (or at least closer to neutral) about driving an hour to go shopping at this outlet mall if that’s where I think I can find great deals.
Even better (for the outlet mall, not necessarily my wallet), such dissonance reduction may lead to a positive feedback loop of sorts. That is, once I’ve rationalized how I feel about driving an hour to the outlet, SURELY the next time I go I’ll find fantastic deals there. Right?
As you make your next road trip and you come across an outlet mall surrounded by miles and miles of undeveloped, rural space, take a moment to consider: how much of the decision to shop there is driven by shoppers’ rational, savings-maximizing thought vs. outlet mall developers’ savvy location and marketing?