Introduction
Outlet malls have gained popularity worldwide as they offer affordable prices for highquality products. This article aims to provide insight into the outlet mall industry’s prospects in Minneapolis, MN, discussing the necessary investment and potential returns. Additionally, suitable locations for an outlet mall store will also be explored.
Minneapolis, MN Demographics and Residential Distribution
Minneapolis is a vibrant city known for its diverse culture and a population of approximately 430,000 residents. The city’s demographic makeup consists of various age groups, with a strong emphasis on the millennial population. Considering their preference for discounted shopping experiences, opening an outlet mall business in this city holds considerable potential.
Important Residential Areas in Minneapolis, MN
- Downtown: This area is home to a significant number of professionals and young residents who enjoy convenient access to various amenities, making it an ideal location for an outlet mall. The presence of numerous office buildings and vibrant nightlife also ensures a consistent influx of potential customers.
- Uptown: Known for its trendy atmosphere, Uptown attracts a mix of young professionals and creatives. Its proximity to Lake Calhoun and Lake Harriet makes it a popular destination for outdoor activities, presenting an excellent opportunity to reach potential customers interested in active and casual wear.
- Northeast: This neighborhood has seen significant revitalization in recent years, attracting an increasing number of young families and artists. Its proximity to the University of Minnesota makes it an attractive area for students, presenting a potential customer base for an outlet mall specializing in fashion and lifestyle products.
Business Districts in Minneapolis, MN
- Mall of America: Located in nearby Bloomington, the Mall of America is a retail mecca that draws visitors from all over the world. While competition is fierce in this area, establishing a presence near the Mall of America can provide excellent exposure and potential collaborations with wellknown brands.
- Nicollet Mall: As the city’s premier shopping destination, Nicollet Mall offers a mix of upscale retail and dining experiences. Opening an outlet mall nearby, offering affordable alternatives to the luxury offerings, could tap into the growing demand for valueoriented shopping experiences.
Investment and Return on Investment (ROI)
Starting an outlet mall business requires a significant initial investment. The estimated capital required ranges from $1 million to $3 million, depending on factors such as store size, location, and inventory. This includes costs associated with leasing or purchasing a suitable retail space, store fixtures, inventory, and marketing.
The return on investment in the outlet mall industry varies depending on several factors, including the store’s location, product offerings, and marketing strategies. While it is challenging to provide an exact figure, industry averages suggest a return on investment ranging from 10% to 20%, with some successful outlets achieving even higher returns.
Ideal Outlet Mall Locations in Minneapolis, MN
- Minneapolis Downtown East: This area is undergoing significant development, making it an attractive choice for establishing an outlet mall. Its proximity to the sports and entertainment district, as well as various other attractions, presents opportunities for attracting both residents and tourists.
- Nicollet Avenue: Considering its status as the city’s premier shopping destination, Nicollet Avenue would be an excellent choice for opening an outlet mall. Its central location and existing foot traffic make it an ideal spot to capture the attention of both locals and tourists.
- Northeast Arts District: As mentioned earlier, the Northeast neighborhood is experiencing a renaissance, making it an exciting location for an outlet mall. With its artistic and trendy vibes, the district offers a unique selling point for potential customers seeking distinct and affordable products.
Conclusion
The outlook for the outlet mall industry in Minneapolis, MN is promising, given the city’s diverse population and preferences. While the initial investment can be substantial, the potential return on investment and the opportunity to tap into various vibrant neighborhoods and business districts make opening an outlet mall store a potentially profitable venture. By carefully selecting a suitable location and understanding the target market, entrepreneurs can position themselves for success in this thriving industry.