Thanks to the advances being made in reverse logistics, outlet malls have become major actors on the global secondary retail market.
The ecommerce revolution has made it possible for retailers to sell and ship more products than ever before — save for that fact, however, the retail supply chain has remained remarkably unchanged over the last several decades. For the most part, department stores and other retailers still serve as the intermediary between the supplier and the consumer.
But for outlet malls, many of which lease space to a myriad of thrift and discount stores, the supply chain works quite differently. These malls have come to rely on something called “reverse logistics,” a logistics paradigm designed to address the specific needs of “secondary market” retailers.
Secondary markets are post-retail channels that provide distribution outlets for unwanted or unsold goods, in order to minimize the losses incurred by manufacturers. Essentially, the secondary market is comprised of secondhand stores, salvage dealers, charities, recycling firms, thrift stores, and value retailers. All of these operations resell products that were either returned or damaged, and that are often palatable to customers because new ones are no longer in stock for the original market retailer. Reverse logistics comes in as the mediary for the distribution of these products.