Older shopping centres are focusing more on community based activities, leaving the retail razzmatazz to the newer luxury malls.
OLDER MALLS in the region are facing a dilemma: expand or die. But as it turns out, this isn’t their only option.
Emaar, for example, has always traded on being the biggest, boldest and first at everything – the ‘flagship’ mentality. And Emaar does it well, with its centrepiece – The Dubai Mall – which attracted 65 million shoppers last year. A recent report by Bain & Co reveals that it accounts for half of all luxury goods sold in Dubai.
Nasser Rafi, CEO of Emaar Malls Group, says: “Customers are now more discerning, with a strong preference for international brands and, more importantly, looking to enjoy the ‘flagship outlet’ experience.”
And older malls have responded by focusing more on communal activities.
“Newer malls are offering more activities and attractions, along with more brands, whereas old malls are providing more community based attractions and activities,” says Tim Jones, COO of Dubai’s Lamcy Plaza, which opened in 1997.
“It should make sense for a customer to come to our mall, in spite of having one of the world’s largest malls and the best iconic brands in the same city,” he adds. Lamcy Plaza now houses a hypermarket, an Air Arabia store and iCare clinic.
Bashar Aboul Hosn, GM at DDB affiliate shopper marketer Tracylocke, says: “In the olden days, if your store was nearby, you would be my preferred retailer... Today you need to have good service, the right products, competitive prices and the experience that consumers are demanding.”
Dubai’s urban tourism grew exponentially over the past decade, with parallel growth in the retail landscape as well.
Imad Abi Rizk, senior manager of exchange at Mindshare UAE, says: “Most modern malls are based alongside the city coast, neighbouring plenty of hotels and tourist landmarks. However, the older and more remote malls are trying harder to attract their share of customers. They are pushing for local events and entertainment, while some are even introducing loyalty cards and incentives.”
Sahara Centre, on the Dubai-Sharjah highway, which opened in 2002, has upgraded its facilities this year and added new stores, but admits that it trades off convenience. “The mall has grown in popularity as the preferred destination for shoppers in Sharjah, who previously used to make long trips to Dubai during weekends,” says Akram Ammar, Sahara Centre’s managing director.
In Egypt, older malls are focusing on low-income consumers, while the Baghdad Investment Commission opened a $35 million mall in Mansoor district, the largest of its kind in Iraq. In Riyadh, the Panorama Mall is a strong offering alongside the Kingdom Centre and Al Faisalia Mall. Panorama Mall has separate areas for luxury and high street brands, including a food court and an amusement park. But shortcomings include poor public access, limited parking and ageing internal finishes. On the whole, although older malls are upgrading, it isn’t the right answer.
“We can clearly see a strong renovation trend in older malls, but what we don’t see is a segmentation approach,” says Nick Walsh, business director at Ogilvy Action, Dubai.
“The only mall that seems to stick to its theme is the Outlet Mall in Dubai. Others [are trying] to emulate The Dubai Mall. This is putting them in direct competition with a mall that they cannot compete with, instead of focusing on what makes them special or at least looking into using their location advantage as leverage.”
Family fun: Older malls are pushing for local events and entertainment