Nisreen Shocair, Virgin Megastore's Middle East president, on why the brand is still going strong.
When Richard Branson sold off his UK record stores last year the future looked bleak for the company’s Middle East franchise.
The huge popularity of MP3 players and the fact that many customers now do their music buying online rather than in-store meant record stores looked in danger of becoming a dying breed.
But Virgin Megastore Middle East president Nisreen Shocair was determined not to let this tide of change wash away the highly successful franchise she had build up across the region.
We see ourselves as neutral players. We provide trends and entertainment in all its formats. We adapted and last year we were ready for not one person to buy a CD in our stores.
And by diversifying her in-store products to include a new lifestyle range – including books, stationery and iPods and soon-to-be-launched children’s sections – she has succeeded where Richard Branson failed, maintaining healthy profits and setting out an ambitious expansion plan to open new stores across the region.
In fact her strategy has been so successful that in May this year, Virgin signed a deal with Virgin Stores France; the license holder, to operate the Megastores in the Middle East for another 13 years – a far cry from the fate of its 125 stores in the UK and Ireland, which were sold off to a group of senior Virgin executives and rebranded Zavvi.
Describing her strategy, Shocair says: “Virgin Megastore has gone through a lot of changes, with the CD market going down.
“Our overall dollar value has gone up in terms of music sales. But music, as a proportion of the total value, has gone down to 12% from 14% this year.
“By working with us Virgin has seen there is a different model – called ‘Lifestyle’ – which is what we’ve created in the Middle East and which we hope to build on in the next 13 years.
“We see ourselves as neutral players. We provide trends and entertainment in all its formats. We adapted and last year we were ready for not one person to buy a CD in our stores.”The company is now set to open a further three stores this year, having already opened 11 across the Middle East.
Perhaps the greatest measure of Virgin Megastore Middle East’s success, however, was the reaction of Richard Branson to the record of the brand in the region.
In certain markets we are not going to go against the flow.
Recalling the words of a colleague, Shocair says: “Somebody from Virgin Megastore said he [Branson] loved the stores and that when he saw them he actually asked the question, why did he shut them (the stores in the UK) down.
“They asked him about our stores and he said that it was one of the rare occasions when Virgin has franchised the stores out to a group and it has done a phenomenal job.”
But while Shocair is rightly proud of the success of Virgin Megastore Middle East, she admits that her journey to the top has not been an easy one.
While the falling popularity of CDs and the closure of Virgin Megastore outlets in the UK presented her with major challenges, she says the negative reaction of male colleagues to having a female president on board was one of the biggest hurdles she had to overcome.
Being a minority in the boardrooms of the Middle East and part of what she describes as “a men’s club” presented Shocair with challenges she never expected to encounter.
“I was naïve when I joined three years ago, to think that Dubai and the Middle East would function in the same way as everywhere else,” she admits.
“I came from a household where there are equal opportunities and I had lived in the US and the UK.
“But being a woman [president] in the Middle East is problematic both internally and externally.“Not everybody is willing to accept a female telling them what to do. And if I’m in a meeting and there are guys in the room it’s assumed that one of the guys is the person that is running the company.
“These are ingrained biases and this translates into the way they [men] do business.”
Her solution was to weed out her opponents – and today, she says, the management team of Virgin Megastore is an equal mix of male and female.
There's a real trend towards Middle East-created content – artists, books, music, videos, you name it.
“I did change the people that we had. In this day and age, if people cannot deal with a female manager then they are not at the educational level that we are looking for and it’s definitely not the right mix,” she says.
But while Shocair has successfully dealt with cultural prejudices within her own team, she says that overcoming traditional values with regard to the products sold in her stores has been more difficult.
She says that being high profile, Virgin is “always a target” for criticism and that the company has had to learn the hard way that sometimes it is not worth going against the flow, following the closure of its store in Kuwait by the authorities last year.
“I think that our attitude now is that in certain markets, we are not going to go against the flow.
“We will have a presence and we will do our best to give the customers what they want but we’re not going to fight an uphill battle.
“Virgin is always a target because it’s a big name and it makes headlines and they [the authorities] use you as an example.”
The Kuwait store has since re-opened but, says Shocair, on a much smaller scale, and with a limited selection of DVDs.“I would say that Kuwait is a very conservative market and that consumers are very open. But maybe the censorship is not in line with the original Virgin concept.
“They like DVDs to be family safe, which I’m not against, so everything has to be, in essence, rated PG.
“But if you look at the top 10 releases, they are not rated PG. So what they would like to do is cut out all the different scenes, words, outfits, you name it.
“And, quite frankly, we’re not willing to sell that product because we would end up disappointing the customers.
I think that we'll have at least one good option for digital downloads, if not many.
“So we have ended up reducing the space of the DVD section from what it used to be – 150 square metres to just 15 square metres – and it’s basically now a kids and documentaries section.”
She says that following its experience in Kuwait the company is unwilling, for now, to expand into the Saudi Arabian market.
“Another group, not ours, is planning to go into Saudi Arabia. I say good luck to them. I think it will be successful eventually but it will be very, very difficult in the interim.
“There’s a lot of censorship and it will involve a lot of time and error.
“Trial and error costs money and we’ve experienced that in some of our markets, and it’s very time-consuming.”
On a more positive note she describes the UAE market as “an incredible market to operate in” and says it has been “very supportive and open-minded”, adding “it has set the pace for other markets”.The same applies to Bahrain and Jordan, she says, revealing that foreign films are in particularly high demand in the latter market.
“The foreign films section in Jordan is very strong. It’s double the size of what we have here. Jordanians are very cultured and open-minded.”
But while catering to demand for international films and music is a high priority for Virgin Megastore, Shocair says some of its highest-selling products are actually generated by regional artists.
“There’s a real trend towards Middle East-created content – artists, books, music, videos, you name it.
“There’s a huge trend towards locally written books, such as Girls of Riyadh.
“I did this whole study of kids and what they purchase in our stores. If you look at 2007 and the top 10 book sales, numbers three, four and five were books for kids teaching them about Islam and Ramadan.
“In music we see the same trend.
“Now in the team we have a dedicated person who looks after Arabic books, music and videos to ensure that every store has the right mix of Arabic products.”
Shocair says she makes finding out exactly who her customers are a high priority – and she has conducted extensive research into who is buying what and why.
She says the majority of Virgin Megastore Middle East’s customers are male – 70% – and that on average they spend 45 minutes in the store during their visits.The majority are also followers of fashion and the latest trends, which is why she believes Virgin Megastore’s Lifestyle range of products is proving so successful.
Her research has also shown that while demand for CDs in other parts of the world has dropped dramatically, customers are still buying them, and even cassettes, in the Middle East.
“People like to buy iPods but they also like to buy six or seven CDs to go with that, to download on their computer. They love the physical aspect of CDs and for digital downloads there isn’t really a good option per se in the Middle East.”
But though keen to answer existing demand for CDs in the Middle East markets, it is precisely the global trend for digital downloads that Virgin Megastore plans to tap into.
Shocair reveals that the company is planning to launch a music download facility to make up for the lack of other alternatives, in particular iTunes, available in the region.
“iTunes is not coming to the Middle East anytime soon,” says Shocair, “Which means that up until now people have to download it for free from peer-to-peer websites, which is hit and miss and is certainly not always good quality.
“I think that we’ll have at least one good option for digital downloads, if not many alternatives. We will be testing an in-store model.”
With so many new product ranges in the pipeline and new stores opening across the region, it’s a good thing that Shocair is a self-confessed lists junkie, admitting “I can’t function without a list and I can’t travel without one. I create lists for my lists.”
And while Shocair may have had to fight twice as hard as her male counterparts to make it to the top – she has more than proven her worth as a female company president in a man’s world.
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