By Soren Billing
EXCLUSIVE: As malls in Dubai mull new charges, BurJuman boss says it led to sales uplift.
The introduction of parking fees at BurJuman increased sales for retailers, the head of the Bur Dubai-based mall said on Wednesday, as more shopping centres mull charging shoppers ahead of the Dubai Metro’s launch.
The mall introduced parking fees on June 2 last year due to the vast number of office workers from Bur Dubai’s Bank Street that were using it.
Contrary to what some retailers may have feared, the move sparked a slight uptick in sales as housewives and other daytime shoppers had better access to parking.
“We ended up not having enough parking space for our shoppers during the daytime. If you came to the mall at 10:30 in the morning, the parking was full,” BurJuman’s managing director Eisa Adam said.
“I don’t blame them. It’s covered parking, it’s available and it’s very safe. The problem started when we started to receive complaints from some of the visitors and some of the retailers who said there was not enough parking in the mall during the daytime.”
The centre now charges visitors AED10 ($2.70) per hour for parking on weekdays between 6am and 6pm, but the fee is refunded if shoppers spend more than AED100.
There is no charge between midday and 2.30pm to ensure that lunch customers spending less than AED100 aren’t deterred from using its food court.
“Our basic reason is to make the parking available to our regular shoppers and any customer visiting a mall like BurJuman would absolutely spend a minimum of AED100,” Adam said.
Parking fees are not a major source of income for the mall since most visitors spend more than that amount, he added.Shop owners can also request free parking for some of its best customers.
On Sunday, Arabian Business reported that a number of shopping malls in Dubai, including Mall of the Emirates and Ibn Battuta, are mulling parking fees to prevent commuters from leaving their cars at their metro stations.
Adam said he believes those shopping centres are now facing a problem similar to the one BurJuman has had on Bank Street, but that it could extend to evenings and weekends as well due to the large residential areas surrounding them.
“There are huge communities beside them. The introduction of the metro is going to make some of those people misuse the parking of the malls,” he said.
Sales at BurJuman continue to be down by an average of around 15-18 percent on the year due to the economic downturn that first hit the mall in October last year.
Of course the Burjuman has had an uplift in sales as a result of introducing parking charges. There's a fair bit of academic research that demonstrates that when people see the concept 'free', it overrides their rational judgement when it comes to judging value. What happens is people come to Burjuman and see they have two options - either pay 10Dhs for the parking or spend 100Dhs in the store and get FREE parking. So what happens? Instead of spending 10 or 20Dhs on parking and then a sub-100Dhs amount on shopping, shoppers will try to 'save' 10Dhs by spending 100Dhs. On paper it doesn't make any sense whatsoever because they're actually then spending possibly an extra 90Dhs - but because this gives them 'free' parking, the word 'free' overrides the rational judgement. It's great to see that there are people running businesses in this country that really do understand the science of retail.
Having only been to Burjaman once since parking fees were introduced it is very hard to believe Mr Adams statement. This looks more like the hype of his advertising agency. Friends who work in the food court there, tell me their revenue is flat only because of increased prices sequentially introduced. This means that there are less people visiting the centre. I used to go there a lot and coffee with friends, As our coffee bill seldom reaches 100 AED i now go elsewhere. This means that I do not browse the shops in Burjaman and it means that I do not buy. I used to spend a lot in the centre. It seems from talking to friends, that many people that they know have adopted the same approach and now boycott Burjaman and its silly money grabbing charges and wait till they are in another part of Dubai with free parking to shop, or they wait till they are in the UK where prices are cheaper...even on sale. I guess there are lies and statistics depending on how you interpret things.
Doug's comment is a little naive, not to mention off the point. No-one will spend 100 just to save 10 (or maybe Doug would!). More likely, genuine shoppers were not going to the mall because the car-park was always full of workers, as the article suggests. However the mall management miss an important issue - what about window-shoppers? Members of my family often go to the malls during the day just to look at the shops, sometimes they buy, sometimes they don't, and they may have a coffee mid-morning / afternoon. However if they have to pay 10dhs an hour for the privelege, they will definitely go elsewhere - any mall that charges like Burjuman will be on the no-go list!
I don't see any business sense in the charges at Bur Juman. Let us examine some of the real life scenarios. 1. What if a person wants to visit a coffe shop other than during mid-day break and his bill is less than 100. 2. What if someone wants to have lunch and finds no parking spaces since parking is free during lunch time. 3. What if a person does not find the goods he is looking for or his bill totals less than 100. 4. What if the person spends 100 but parks the car for say 7 hrs. In all the above situations he/she will be discouraged to visit the mall again.Does not make sense if the Mall wants to build up loyalty which is the backbone of any mall. Here is my suggestion. 1. First Hour of the parking should be free. ( bank employees or anyone else will not have the time to take out the car and park again every hour to avail free facility). Additional hours should be charged at progressive rate. ie. 2nd hr @ 10/-, 3rd hr @ 20/- and so on. 2. For serious shoppers, for every 100 Dhms. spent 1 hour of extra parking time should be allowed free (maximum 3hrs)meaning if a customer spends 100 then 1+1 free parking, if he spends 200 then 1+2 hrs. free parking, if 300 than he is entitled to park upto 1+3 Hrs and if he spends 400/500 etc., he is entitled to a maximum of 1+3 free hours only. This will discourage people from misusing the parking facility and at the same time encourage shoppers to shop more.
When I go on a friday or saturday at any mall in Dubai and genuinely I am willing to purchase I find very difficult to find parking. 60% of those who visit malls especially on weekends are there to walk and not for buying. Hence beside Doug's comment which might be correct, the fact it's simple. Friday I have renounced to get a birthday gift while hundreds were there and did not purchase a thing. Cinical? Maybe, but the economy (also for those who like to walk and not to buy) will benefit from customers and not just watchers.
I am afraid i have to disgree with it. Going by my own example & few of my friends, we don't even remember when was the last time we went to Burjuman Mall ever since paid parking introduced! we are a bunch of regular mall visitors wether its for window shopping, eating, movies or kids activities. It is like forcing us to spend 100 dhs everytime we head to burjuman mall which obviously worked against burjuman mall in our case. We do spend everytime we go a mall but we decide how much to spend wether 100 or 1000 dhs! we certainly don't like to let a mall dictate terms to us on our spending! May be it works for some people but i know for sure for a lot of people it didn't. Have a nice day!
I had a business meeting in burjuman few weeks back and it lasted 1 1/2 hours, when i have gone to pay the parking fee the machine showed AED 60, i was shocked and thought some thing is wrong, so called the security guy nearby and was informed that the fee is AED 30 per hour since mine was 1 1/2 hour its AED 60, so better go any buy some thing of AED 100 and get it waved off, which I did and bought unnecessary 2 shirts. and then never went back.
How amusing. Do you really think a mall wants window shoppers? I don't know where you're getting this hilarious idea that there couldn't possibly be a boost in sales now that the people who don't buy anything have stopped going there. The fact is that the people now parking at the BurJuman are going there specifically to buy things, rather than just gawp, put up the aircon bills and wear out the tiles. What I think is happening is this. People are going to the BurJuman, because it's a mall. When they see that there's paid parking, they either take the attitude of astonished shock that a mall has the temerity to charge for parking, and then drive home or to another mall, OR they get there, think "well, I've got to buy a shiny object anyway, and I might as well buy some other shiny as well if it means I get free parking." Say you're in a well-known music store in the Burjuman and you're buying a CD for 80Dhs. Now, you can either pay 90Dhs for the purchase (CD + parking fee) OR you can think "hmm, if I pay another 80Dhs, I get another CD AND free parking! Wow!". The customers who do choose to continue shopping at BurJuman will spend MORE overall as a result of the parking pricing. Of course, where this gets really interesting is if ALL the malls start charging for parking unless you spend a certain amount. Will people here suddenly break the habit of a lifetime and stop shopping? I don't think so, somehow!
This decision is against all marketing basics! Customers deserves a PLEASANT SHOPPING EXPERIENCE TO SPEND MONEY. As Mr. S.Walton quoted: "The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience." Who took this decision is disregarding marketing basics.
The parking for the business people and staff members is a GIANT problem and it is sad that the planners of this great city (Dubai) do not make more parking available for them, but as they are not paying members into the coffers of the merchant oriented managers of the city, the city of Dubai does not force the developers to build sufficient space. They simply want them to spend more money on RTA's taxi's and soon the metro. This prevents freedom of movement on the part of the staffers, who are really not wanted in Dubai anyhow, for they don't have the ability to buy over priced real estate or pay the exorbitant rents that are still high. Does anyone who earns say AED 9,125 or $2,500 a month have the ability to pay for a two bedroom apartment of 90,000 (AED) annually? No, they are forced to share apartments (who in city management is willing to live that way? I bet there are no takers) and live in Sharjah where the traffic is horrible to get to work in Dubai. The issue is that the city needs to think beyond the wallet and take care of somehow, the people that make the city move, go to work and do the admin that makes everything happen. The metro in my mind is an excellent activity and I definitely will be riding it, but not due to someone forcing me to do so and not live with freedom of movement. IT will be to not have to drive, not to emit gasses into the air and for environmental purposes. The situation for example in MOE is different than Bur Juman. There are no institutions around the MOE that would need residential or business parking at MOE. The residential apartments are too far away for someone to walk in the dreaded heat back and forth. So the parking at MOE is solely based on shoppers. It is not the fault of the shopper that the mall does so well now and that it does not have enough parking spots in this case. The Mall designed the parking garage as a go cart lane, where so much space was used up by curbs and lined out areas, where no one can park. This is substantial waste of parking space. They ticket people who try to shop at the mall by parking on top of the curbs, well out of the way of others. This is not fair nor good business sense on the part of the MOE management. They simply need to build more spaces and eliminate ridiculous curb space and so forth. It is like the way the RTA makes you go two kilometers out of the way on Al Wasl road, for people on the South side of Al Wasl road to simply cross the street to shop at the "new" Choittrams, due to taking out the left hand turn lanes. They could put in a round about or even a light, but no, they would rather everyone go to the end of the road and take a left at the uturns there, rather than close to a major shopping destination. The same theory for around Discovery Gardens. They took out the light systems and make everyone who wants to turn left go all the way down, over a kilometer and a half to the circle and then come back all the way back, another near kilometer. This is ridiculous road management. The same goes for the parking. At the end of the day, where are the people who are staff and businesspersons supposed to park near Bur Juman? that is the question. The city really needs to help these people, rather than intimidate them. They can help by forcing the developers to provide more than adequate parking. They should not do this by social engineering that people who are not business owners or who don't earn 40,000 AED a month or more cannot drive. That is absolutely wrong, autocratic and unfair. My two faisals opinion.