Dubai retail sector aims for right mix
Over the last two years, Dubai retailers have witnessed a sharp shift in consumer behaviour and preferences. Today, consumers are driving change more than ever before, and mall operators and retailers clamour to satisfy a growing appetite for originality, immersive experiences and convenience.
The retail journey is now paved more towards what consumers feel and the experiences they seek. They are now in the pursuit of curating remarkable experiences and traditional indicators of success — such as sales — are increasingly underpinned by deliverables such as customer satisfaction and the creation of an outstanding in-store experience. Dubai has steadily risen in the ranks to become the most important retail destination globally, with 62 per cent of international retailers now present in the emirate. During 2017, Dubai welcomed 59 international retail brand names, leaving little doubt that the market is now the prime entry point to the region for overseas brands from all across the globe.
F&B brands looking to expand into the emirate will see a large share of the increased space for growth being allocated to them. The coffee and restaurants category continues to dominate with almost half of all new entrants originating from this sector.
A rising interest in the healthy and organic food sector, which aligns with the market heading toward wellness and lifestyle, has resulted in a growing allocation for F&B space. The Seventh Heaven-Al Barari is a perfect example of a scheme attracting these types of concepts. This is an indicator of the conscious effort made by landlords to encourage greater footfall and create environments where customers increase their dwell time and spend.
This, along with the impact of e-commerce, will result in the gradual erosion of standard in-line formats as retailers move towards an increase in entertainment, ‘edutainment’ and other experiential retail offerings. The wellness industry has also experienced substantial growth, with consumers taking keen interest in the health and organic food sector. Kcal, a healthy food delivery service, has now expanded and opened its first restaurant in Dubai, Gourmet by Kcal. This is testament to the fact that when it comes to e-commerce and brick-and-mortar locations, one cannot survive without the other, a trend witnessed in the US as Amazon opened its first brick-and-mortar store to the public in January.
The rise of the community mall is also an indicator of retailers’ responsiveness to the convenience demanded by Dubai’s growing communities. The smaller malls are within walking reach of communities and making shopping more convenient. Consumers are on the hunt for ways to do things quicker and more conveniently. Whether retailers are longstanding brands or innovative concepts, the key to sustainability lies in perfecting a seamless integration between consumers’ online and offline experiences. While most major supermarkets and retailers are launching their e-commerce platforms to cater for a desire for convenience, many businesses operating solely within an e-commerce platform are working towards securing a physical location for their brands and sub-brands.
A physical store, albeit in a non-traditional role, remains critical to growth. This is apparent not only in the continued expansion of retailer store networks, but also by the number of online-only brands that have expanded their networks to include physical stores in accessible locations. Honing in on the right mix of brick-and-mortar presence and a well-managed online presence remains the driving factor behind retail success.