WIDER FOOT­PRINT

Ryan Har­ri­son goes on a quick shop­ping trip to un­der­stand re­tail trends be­yond the UAE.

Gulf Marketing Review - - SECTOR ANALYSIS -

WHILE THE UAE’s re­tail sec­tor com­mands most of the at­ten­tion, what de­vel­op­ments are we see­ing across the Mena re­gion?

In the de­vel­op­ing oil economies of Al­ge­ria, Libya and Iraq, mar­kets are dom­i­nated by tra­di­tional souks and cor­ner shops, how­ever, an ex­pand­ing and in­creas­ingly so­phis­ti­cated mid­dle class is pre­sent­ing an op­por­tu­nity for re­tail­ers to of­fer new shop­ping ex­pe­ri­ences.

“Th­ese grad­ual cul­tural shifts have trig­gered a de­mand for new shop­ping ex­pe­ri­ences, mov­ing from tra­di­tional souks to su­per­mar­kets, hy­per­mar­kets and mall com­plexes,” says Florence Eid-Oak­den, CEO and chief econ­o­mist of Ara­bia Mon­i­tor. In other Arab Spring-af­fected coun­tries, such as Egypt and Tu­nisia, Ara­bia Mon­i­tor’s re­search sug­gests that, sur­pris­ingly, there are com­pa­nies that are still go­ing ahead and build­ing new shop­ping malls. This is in­ter­est­ing given the po­lit­i­cal and eco­nomic cli­mate in th­ese coun­tries. How­ever, it is per­ceived that in­vestors re­gard de­vel­op­ments in Arab Spring-af­fected coun­tries as a long-term in­vest­ment.

Mean­while, GCC na­tions have been able to pick them­selves up a lot quicker fol­low­ing the fi­nan­cial crash, due to the avail­able cap­i­tal and in­vest­ments.

“In mar­kets with a tourist foot­fall, the new­est trend is build­ing ‘ho­tels-in-malls’ to fur­ther cap­i­talise on the tourist traf­fic. Shop­ping pack­ages are be­ing of­fered to ho­tel oc­cu­pants, along with ‘per­sonal shop­pers’ from the ho­tel it­self,” says Tauseef An­war, se­nior man­ager at SMG MENA and me­dia plan­ner at Ma­jed Al Fut­taim.

Qatar has felt a slight im­pact, but it is re­cov­er­ing, while Saudi is open­ing up the sec­tor to women. The Red Sea Mall in Jed­dah, for in­stance, dou­bled the num­ber of stores op­er­ated by women last year. This is sig­nif­i­cant be­cause of women’s spend­ing po­ten­tial.

On the whole, there’s been a wel­come bounce in Mena con­sumer con­fi­dence, ac­cord­ing to the Mid­dle East Coun­cil for Shop­ping Cen­tres – MECSC.

David Macadam, CEO and vice-chair­man of MECSC, says: “The con­sump­tion in the Mena re­tail sec­tor con­tin­ues to sur­prise me on a pos­i­tive note. The growth of sales of the ‘bridge brands’ dur­ing the Eid hol­i­days was a pleas­ant sur­prise. Shops such as Ted Baker and Bebe saw an in­crease in sales of more than 50 per cent year-on-year.”

Econ­o­mists say that this is good news, as it in­di­cates strong con­fi­dence in the fu­ture earn­ing po­ten­tial of shop­pers. As far as con­sumer be­hav­iour is con­cerned, there’s a sea of change tak­ing place that re­tail­ers are notic­ing.

Fran­cois Schweitzer, gen­eral man­ager of busi­ness de­vel­op­ment at Chal­houb Group, says: “We have seen a ma­jor change in con­sumers’ be­hav­iour, es­pe­cially in Emi­ratis, Kuwaitis and Saudis who are widely us­ing so­cial me­dia plat­forms, such as In­sta­gram, for post­ing pic­tures about their moods and so­cial gath­er­ings, but also fash­ion and brands they like or are buy­ing. There­fore, the per­son or the am­biance is po­si­tioned first and the brand takes the sec­ond place.”

“We have seen a ma­jor change in con­sumers’ be­hav­iour, es­pe­cially in Emi­ratis, Kuwaitis and Saudis...”

It goes with­out say­ing the most re­cent in­no­va­tive de­vel­op­ments have come with the help of new tech­nolo­gies.

Dany El Zein, me­dia di­rec­tor at Havas Me­dia, says: “Mall op­er­a­tors in the US and Europe are start­ing to ex­plore smart cam­era tech­nolo­gies and ra­dio fre­quency iden­ti­fi­ca­tion sys­tems that can recog­nise con­sumers and doc­u­ment pur­chases, so when they re­turn, fit­ting rooms and store screens can rec­om­mend prod­ucts in an aug­mented re­al­ity set­ting.”

The re­tail in­dus­try needs in­no­va­tive and smart ideas to at­tract more visi­tors to malls, in­stead of just of­fer­ing price dis­counts and pro­mo­tions. There­fore, re­tail­ers and mall op­er­a­tors are fac­ing the pres­sure to work to­gether and on joint cam­paigns to in­crease foot­fall into the malls.

Joumana Hage, se­nior strate­gic plan­ner at Cheil MEA , says: “For in­stance, the Sam­sung Galaxy S4 ‘Stare Down’ cam­paign en­cour­aged pedes­tri­ans in Switzer­land to stare con­tin­u­ously at the phone in­side a city light poster – the longer they do, the greater the dis­count.

“How­ever, to make it harder, par­tic­i­pants were bom­barded by ac­tors ask­ing for di­rec­tions and many such dis­trac­tions. In the end, those who were able to ig­nore the dis­trac­tions for one hour got the phone for free.”

That’s the kind of ex­pe­ri­ence that to­day’s smart con­sumers are af­ter when they go shop­ping, some­thing that is a pleas­ant sur­prise and en­cour­ages con­ver­sa­tion. And con­sumers in the Mena re­gion are no dif­fer­ent.

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