Four big trends shaping the future of Middle East retail
Providing a space for social interaction can be a route to greater revenues for retailers in 2021, offering soaring dwell times, loyalty rates and shareability opportunities
Mariagrazia De Angelis – Group General Manager, Middle East Landor & Fitch.
Time and tide wait for no one. Changes to the way we live, work, socialise and shop have been more dramatic over the last 16 months than ever before. For the global retail sector, these changes have been acute. From commercial landlords and developers facing intense cost pressures, to consumer behaviour being moulded by rapidly developing technology, the landscape is shifting continuously.
We have observed four trends carving new opportunities for retailers here in the region.
The focus on experience
Covid-19 brought the world to a temporary standstill, and shopping was limited to online only for a time. Now, as pent-up demand is released, retail sales in the UAE are expected to grow by 13 percent to reach $58 billion by the end of 2021. While the future for bricks-and-mortar stores looks bright once again, shopping centre landlords and developers are not standing still and are hyper-focused on boosting footfall as well as dwell time. They are looking at ways to expand the use of their space, giving shoppers new reasons to visit, visit again, and to stay.
Attractions beyond dining and shopping will be key to capturing visitor interest for longer. This is reflected in recent developments in the local retail sector recently. For example, Emaar Malls completed The Dubai Mall Village expansion project, adding 21 new sports and lifestyle stores to its flagship destination. Retail giant Majid Al Futtaim launched its first-ever concept destination earlier this year. These aim to take shoppers on a complete lifestyle journey at the Mall of the Emirates, where they can explore the very best in the world of fashion, fine jewellery, home, beauty, grooming, fitness, art and soon, dining.
Emaar Malls completed The Dubai Mall Village expansion project, adding 21 new sports and lifestyle stores to its flagship destination.
The trend for enhancing lifestyle experiences in retail spaces looks sets to be turbocharged when the Mall of Saudi opens in 2024. It promises to be the region’s premier shopping destination offering a five-star luxury hotel, 62,700 square metres of leisure and entertainment facilities and, spectacularly, a 40,000-square-metre indoor ski slope and snow park alongside more than 600 stores.
Demand for ‘liveability’
Another big trend influencing retail space today is the focus on ‘liveability’. Globally, seven in 10 of the world’s population will live in cities by 2050, up from two in 10 just a century ago, according to the UN. As cities become more populated, there will be an increased emphasis on enhancing liveability standards by residents, which retail spaces can deliver on. And this notion fits with the ambitions of the local governments too.
For example, Riyadh aims be one of the 10 largest economic cities in the world, and the city is launching several urban development initiatives that add to the quality of life of residents, including the allotment of 20 million square metres of land north of Riyadh for new residential housing, which will need to be supported by innovative – and creative – retail environments. This is where the design of retail spaces will become more important and, certainly, more impactful.
Riyadh aims be one of the 10 largest economic cities in the world.
The City of London has a similar approach at the heart of its post-pandemic recovery strategy. Usually home to just 8,000 residents (compared with about half a million people who commute in for work) the city has announced plans to build at least 1,500 homes within the next decade to revive the area and its identity as a place to live.
The city is calling for owners, occupiers and employers to make unused office and retail space available for creative commerce. It wants businesses and public bodies to employ artists and creatives to fill streets, shop windows, and lobbies in the capital with creative activity to enhance the liveability of the area, but also to attract visitors and other businesses.
Digital evolution
The march of technology continues to revolutionise how we experience space. In the retail sector specifically, technology is being used to host seamless and immersive experiences.
One example is K11 MUSEA: a museum-retail destination in Hong Kong that pushes the boundaries of what premium malls can be. It uses our MXP technology to connect all digital touchpoints across the shopping mall, including interactive displays, websites, apps, loyalty programmes, social media and advertising. Visitors at K11 MUSEA can access events, movies, food delivery and products, all through one mobile app. A digital art tour that visitors can experience at any moment is also available.
Adidas is opening its first flagship store in the region in March, and it is bristling with innovation.
In-store technology is also helping to bolster the shopping experience in practical but also delightful ways. Adidas is opening its first flagship store in the region in March, and it is bristling with innovation. Visitors can scan products using a dedicated app for additional information in real time, or request different sizes and colours to be delivered in-store. The changing rooms are armed with interactive mirrors that can recognise products and offer information and options to connect with staff. It also uses augmented reality so shoppers can see how a product will look in the real world against different backdrops, as well as have the product information presented in exciting ways.
The use of AR is an exciting use of retail space, not to mention exciting for consumers, seen with the AR experience we developed for adidas as it launched the X18 football boot globally in time for the FIFA World Cup.
Social centre points
After months of lockdowns and restrictions, people are seeking human connection. Retailers that can put socialising and exploration (safely) at the heart of their retail experiences will reap the long-term reward.
LEGO offers this lesson, with its ambition to always provide spaces for play as well as purchase. It cleared away a quarter of the merchandise from its shopfloor to create more room for children to play and explore. Contrary to conventional thinking, there is no need for a compromise between pay and play when it comes to store layout. In fact, this move resulted in a 30 percent increase in sales in the first year and it proved so successful that this model has been implemented across the world – not just at dedicated stores but at theme parks, malls and shopping centres, too.
Beauty retail is famously social; beauty fans flock to stores to explore the latest and greatest products. Brand ambassadors and consultants weave throughout, test and trial is essential, and touchpoints are shareable and designed to foster community. Lancôme’s flagship on the Champs-Élysées is one example of this with each zone celebrating its categories in ways which connect its ‘happiness activists’ with one another.
Providing a space for social interaction can be a route to greater revenues for retailers in 2021, offering soaring dwell times, loyalty rates and shareability opportunities.
Other retail players can start taking influence from this use of retail space, while the demand for human connection and interaction is on the rise. What could this look like for telecoms, automotive or financial brands, for example?
Space to thrive
The changes society has undergone over the last year are among the most significant in human history. The way we live and work are irrevocably altered. For retailers, this is both daunting and exciting. Those who can adapt and offer what today’s consumers are looking for stand to not only survive, but thrive.
Mariagrazia De Angelis – Group General Manager, Middle East Landor & Fitch.
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Four big trends shaping the future of Middle East retail
Providing a space for social interaction can be a route to greater revenues for retailers in 2021, offering soaring dwell times, loyalty rates and shareability opportunities
Mariagrazia De Angelis – Group General Manager, Middle East Landor & Fitch.
Time and tide wait for no one. Changes to the way we live, work, socialise and shop have been more dramatic over the last 16 months than ever before. For the global retail sector, these changes have been acute. From commercial landlords and developers facing intense cost pressures, to consumer behaviour being moulded by rapidly developing technology, the landscape is shifting continuously.
We have observed four trends carving new opportunities for retailers here in the region.
The focus on experience
Covid-19 brought the world to a temporary standstill, and shopping was limited to online only for a time. Now, as pent-up demand is released, retail sales in the UAE are expected to grow by 13 percent to reach $58 billion by the end of 2021. While the future for bricks-and-mortar stores looks bright once again, shopping centre landlords and developers are not standing still and are hyper-focused on boosting footfall as well as dwell time. They are looking at ways to expand the use of their space, giving shoppers new reasons to visit, visit again, and to stay.
Attractions beyond dining and shopping will be key to capturing visitor interest for longer. This is reflected in recent developments in the local retail sector recently. For example, Emaar Malls completed The Dubai Mall Village expansion project, adding 21 new sports and lifestyle stores to its flagship destination. Retail giant Majid Al Futtaim launched its first-ever concept destination earlier this year. These aim to take shoppers on a complete lifestyle journey at the Mall of the Emirates, where they can explore the very best in the world of fashion, fine jewellery, home, beauty, grooming, fitness, art and soon, dining.
The trend for enhancing lifestyle experiences in retail spaces looks sets to be turbocharged when the Mall of Saudi opens in 2024. It promises to be the region’s premier shopping destination offering a five-star luxury hotel, 62,700 square metres of leisure and entertainment facilities and, spectacularly, a 40,000-square-metre indoor ski slope and snow park alongside more than 600 stores.
Demand for ‘liveability’
Another big trend influencing retail space today is the focus on ‘liveability’. Globally, seven in 10 of the world’s population will live in cities by 2050, up from two in 10 just a century ago, according to the UN. As cities become more populated, there will be an increased emphasis on enhancing liveability standards by residents, which retail spaces can deliver on. And this notion fits with the ambitions of the local governments too.
For example, Riyadh aims be one of the 10 largest economic cities in the world, and the city is launching several urban development initiatives that add to the quality of life of residents, including the allotment of 20 million square metres of land north of Riyadh for new residential housing, which will need to be supported by innovative – and creative – retail environments. This is where the design of retail spaces will become more important and, certainly, more impactful.
The City of London has a similar approach at the heart of its post-pandemic recovery strategy. Usually home to just 8,000 residents (compared with about half a million people who commute in for work) the city has announced plans to build at least 1,500 homes within the next decade to revive the area and its identity as a place to live.
The city is calling for owners, occupiers and employers to make unused office and retail space available for creative commerce. It wants businesses and public bodies to employ artists and creatives to fill streets, shop windows, and lobbies in the capital with creative activity to enhance the liveability of the area, but also to attract visitors and other businesses.
Digital evolution
The march of technology continues to revolutionise how we experience space. In the retail sector specifically, technology is being used to host seamless and immersive experiences.
One example is K11 MUSEA: a museum-retail destination in Hong Kong that pushes the boundaries of what premium malls can be. It uses our MXP technology to connect all digital touchpoints across the shopping mall, including interactive displays, websites, apps, loyalty programmes, social media and advertising. Visitors at K11 MUSEA can access events, movies, food delivery and products, all through one mobile app. A digital art tour that visitors can experience at any moment is also available.
In-store technology is also helping to bolster the shopping experience in practical but also delightful ways. Adidas is opening its first flagship store in the region in March, and it is bristling with innovation. Visitors can scan products using a dedicated app for additional information in real time, or request different sizes and colours to be delivered in-store. The changing rooms are armed with interactive mirrors that can recognise products and offer information and options to connect with staff. It also uses augmented reality so shoppers can see how a product will look in the real world against different backdrops, as well as have the product information presented in exciting ways.
The use of AR is an exciting use of retail space, not to mention exciting for consumers, seen with the AR experience we developed for adidas as it launched the X18 football boot globally in time for the FIFA World Cup.
Social centre points
After months of lockdowns and restrictions, people are seeking human connection. Retailers that can put socialising and exploration (safely) at the heart of their retail experiences will reap the long-term reward.
LEGO offers this lesson, with its ambition to always provide spaces for play as well as purchase. It cleared away a quarter of the merchandise from its shopfloor to create more room for children to play and explore. Contrary to conventional thinking, there is no need for a compromise between pay and play when it comes to store layout. In fact, this move resulted in a 30 percent increase in sales in the first year and it proved so successful that this model has been implemented across the world – not just at dedicated stores but at theme parks, malls and shopping centres, too.
Beauty retail is famously social; beauty fans flock to stores to explore the latest and greatest products. Brand ambassadors and consultants weave throughout, test and trial is essential, and touchpoints are shareable and designed to foster community. Lancôme’s flagship on the Champs-Élysées is one example of this with each zone celebrating its categories in ways which connect its ‘happiness activists’ with one another.
Providing a space for social interaction can be a route to greater revenues for retailers in 2021, offering soaring dwell times, loyalty rates and shareability opportunities.
Other retail players can start taking influence from this use of retail space, while the demand for human connection and interaction is on the rise. What could this look like for telecoms, automotive or financial brands, for example?
Space to thrive
The changes society has undergone over the last year are among the most significant in human history. The way we live and work are irrevocably altered. For retailers, this is both daunting and exciting. Those who can adapt and offer what today’s consumers are looking for stand to not only survive, but thrive.
Mariagrazia De Angelis – Group General Manager, Middle East Landor & Fitch.
Follow us on
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