Will Simon Property and Rue Gilt disrupt the online value shopping market?

Discussion
Source: shoppremiumoutlets.com
Oct 03, 2019
George Anderson

Simon Property Group and Rue Gilt Groupe (RGG) announced yesterday the launch of a joint venture between the two companies to take outlet shopping to new heights online through ShopPremiumOutlets.com (SPO).

The beta test for SPO was announced by Simon in March. It included over 300,000 products from more than 2,000 brands. The site marketed itself to members of Simon’s VIP Shopping Club as offering savings up to 65 percent off full retail. 

Simon plans to promote SPO through its properties across  the U.S., and the two companies said they will be leverage combined databases of over 35 million shoppers to get the word out.

“Our strong capabilities in the physical outlet space, combined with RGG’s exceptional e-commerce success, will give shoppers enhanced access to the world’s best brands and the most compelling deals both online and in-store,” said David Simon, chairman, CEO and president of Simon, in a statement. “We believe online value shopping presents a tremendous business opportunity for Simon, given our credibility, trust and relationships with brands, retailers and shoppers.”

RGG chairman Michael Rubin said the venture with Simon puts them in an ideal situation to capture the “massive opportunity” that will come with disrupting the online value shopping market. 

Simon’s SPO personnel will be integrated into RGG’s team as part of the deal. RGG will be responsible for the day-to-day management of SPO. Each platform will continue to operate under its own brand.

“Our expertise in e-commerce, data-science, curation and customer experience was the foundation for this partnership,” said Mark McWeeny, CEO of RGG, in a statement. “Together with Simon’s leadership, we are excited about the future opportunities ahead for this new, innovative retail platform.”

DISCUSSION QUESTIONS: How do you expect the combination of Simon and RGG to fare competing against off-pricers and other retailers competing in the value shopping market online? Where do you see the opportunities and challenges that will face Simon and RGG?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"So many shoppers enjoy a day hunting around at the outlet malls! This experiment makes that treasure hunt easy on a daily basis. "
"Fantastic and a great example of innovation that makes sense! My only caution would be around limiting it to members of Simon’s VIP Shopping Club."
"This is a great idea whose time had come. I’m just afraid that the time was about five years ago..."

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9 Comments on "Will Simon Property and Rue Gilt disrupt the online value shopping market?"


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Bob Amster
BrainTrust

On paper, this appears to be a match that Yente in Fiddler on the Roof could not have done better. Totally complementary partnership. Bargain hunters will be pleased.

Jeff Sward
BrainTrust

This sounds to me like an opportunity to reinvent the HOW of the “treasure hunt.” This is a conscious effort to combine disparate skill sets. Theoretically, that can be a short cut. But it’s also an opportunity for clashes of strategy and primacy. For now, I’m just going to applaud the effort and see what we all learn from the initiative. More power to the experimenters!

David Naumann
BrainTrust

I am surprised that the concept of virtual (online) outlet malls hasn’t been capitalized on sooner. It always amazes me how busy outlet malls are and how many shoppers seek them out along freeways. Digitizing the outlet mall is a stellar idea.

Anne Howe
Guest

So many shoppers enjoy a day hunting around at the outlet malls! This experiment makes that treasure hunt easy on a daily basis. It seems like a logical business decision, but I wonder of shoppers will still prefer the fun of the outlet center IRL visit versus just another online trip.

Peter Charness
BrainTrust

This is a great idea whose time had come. I’m just afraid that the time was about five years ago and this effort will now meet with significant entrenched competition. Perhaps a very unique UX will do the trick — if not…

Ken Morris
BrainTrust

I think it is an excellent move for Simon. They need to drive traffic to their properties and this is a great way to do so but they will face stiff competition from the experts at off-price in TJX/Marshalls with their recently announced online initiative. This is a different customer profile and will be a challenge to successfully pull off. Everyone loves a bargain regardless of their economic status so the market is huge but understanding the nuances of the market will be key to successfully pulling this off.

Laura Davis-Taylor
BrainTrust

Fantastic and a great example of innovation that makes sense! My only caution would be around limiting it to members of Simon’s VIP Shopping Club. I may be wrong, but I’d lure people into it, get them hooked and then offer an additional perk if you also join the club (like free or discounted shipping).

Rich Kizer
BrainTrust

I’m surprised that no one has mentioned that Simon’s clients consist of brick and mortar retailers, and now they are opening virtual outlets that will compete with their own clients?

Lantz Starratt
Guest

Ha! Rich I was thinking the same thing. I thought maybe they had taken a Chinese proverb about competing against one’s self too literally or something? Who knows, but nonetheless an interesting strategy.

wpDiscuz
Braintrust
"So many shoppers enjoy a day hunting around at the outlet malls! This experiment makes that treasure hunt easy on a daily basis. "
"Fantastic and a great example of innovation that makes sense! My only caution would be around limiting it to members of Simon’s VIP Shopping Club."
"This is a great idea whose time had come. I’m just afraid that the time was about five years ago..."

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