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Sun 20 Nov 2005 04:00 AM

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Shopping for the perfect mall

The Middle East is a melting pot of nationalities, but they all have a passion for shopping. Richard Abbott looks at how the region’s shopping malls fight for consumers

Shopping for the perfect mall|~|mall200.jpg|~|Shopaholics... Bahrainis indulge in their passion for shopping at a mall in Manama, Bahrain|~|Shopping is not just a routine activity here in the Middle East. It is more of a leisure activity. For some, it borders on a religion. The traditional souks, tightly packed markets providing locals with everything they need to eat, drink and wear, now co-exist alongside their modern day counterparts — sprawling urban malls housing Western fashion chains and fast food courts.

And as the wealth of the oil-rich nations has increased, so has the spending power of consumers, which has prompted developers to build even more malls.

Louai Alasfahani, managing partner of Kuwait-based Paragon Marketing Communications, says: “The shopping mall is no longer a place for shopping only. It is about dining, about going to the cinema.”

Figures from Retail International show that in April this year there was 4.5 million square metres of what it terms ‘gross leasable area’ completed in the GCC. And when you factor in current developments and projects in the pipeline, this figure is predicted to reach 11 million square metres by 2010.

This would represent an uplift over the next five years of 150% across the GCC. The running is expected to be made by the UAE and Kuwait, followed closely by Qatar. But in real terms Saudi Arabia and the UAE will remain the clear leaders with projected totals reaching up to four and five million square metres respectively.

Dubai alone now boasts dozens of shopping hubs. The latest of these include the Ibn Battuta Mall, which contains internationally themed courts, and — just a few junctions along Sheikh Zayed Road — the Mall of the Emirates.
And there is more to come, with the Mall of Arabia at Dubailand and the Dubai Mall at the Burj Dubai development, which the developers claim will be the “most dramatic retail real-estate development. Not just in the Gulf’s history. But in the world”.

The city of Dubai is expected to provide around 30% of all mall space in the GCC by the end of the decade.
So why is the Middle East so hooked on malls?
“Climate is a big aspect of it,” explains Mike Davidson, director of Wafi Property, which runs the pyramid-themed Wafi City mall in Dubai.

“In the summertime it is difficult for people to go anywhere. Shopping malls are regarded as social places. Sometimes people don’t even shop. In Saudi Arabia, where there are no cinemas, going to a shopping mall is one of the most pleasurable things to do.”

For those responsible for marketing the region’s shopping malls, it is a constant battle to ensure that potential customers step through your doors rather than those of your rivals.

It is about having the right shops, the appropriate ambience and a decent value offer — consumers in the Middle East know a good deal when they see one.

Malls tend to fall into three brackets. Local malls: Smaller centres catering for a local community, usually featuring a supermarket, cafes and selected chain retailers.
Mass market malls: Offering mainstream retail brands alongside cinemas and restaurants. A one-stop shopping and entertainment destination.

Designer malls: Housing upmarket and designer shopping brands, these malls are elegantly styled and target themselves at consumers with a high disposable income.
Kuwait is another country experiencing an explosion of malls. Paragon’s Alasfahnai has worked on several launches.

His company is currently working on the launch of the Al Bahar Centre, scheduled to open its doors in January next year, and it previously worked on the launch of the Marina Mall in Salmyia, which was the biggest mall in the country.

“This is a really important sector,” he says. “For Marina Mall our strategy was simple. The mall was a well-known building so it generated a lot of publicity just by being there.
“All we had to do was tell people that it was open using simple messages based on the logo. We took full-page ads on the back pages of newspapers.”

So what is the key to effectively marketing a new shopping mall?

“You don’t need to outspend your competitor,” says Alasfahani. “You just need to outsmart them.
“You need to do a SWOT analysis (strengths, weaknesses, opportunities and threats). There is always some kind of unique selling proposition. It could be location, it could be size. What about the parking facilities, the exclusivity?”

Wafi’s Davidson agrees with Alasfahani that the key to marketing a mall is to differentiate yourself from your rivals. “It is about continual awareness of what your product is,” he explains.

He says advertising can be very hit and miss due to the lack of response data. “You can only measure the success of a campaign by looking at your customer footfall before and after,” he says. “But the reason for the uplift might not be the advertising.

“At the end of the day, you have to keep advertising because everyone else does. You have to keep that awareness going all the time.”

As consumer demand for shopping malls shows no sign of abating, developers are falling over themselves to build newer, bigger and more exciting destinations. But with the pressure on from hungry investors to deliver the malls quickly, unrealistic deadlines can be set.||**||Shopping for the perfect mall|~|Alasfahani,-Louai200.jpg|~|Louai Alasfahani, managing partner of Paragon Marketing Communications|~|The proposed marketing bonanza to greet the opening of Dubai’s Mall of the Emirates, the fifth largest shopping centre in the world, had to be reigned in because only a third of the planned shops opened on time.

The mall was aiming for a world record of more than 300 retail openings on launch day, but only 100 opened their doors, forcing the mall into “soft launch” mode.

Rob Mitchell, managing director of Saatchi & Saatchi in Dubai, the mall’s advertising agency, summed it up. “It was not always the plan, but you have to accept that it is a bit of a moveable feast when you open a shopping mall,” he admitted at the time.

Despite this, the mall feels it has got its strategy correct. “We were aware that we had a pretty unique project in Dubai,” says Alan Jones, marketing manager. “So we started sending out press releases two or three years ago to build awareness. Since then, we have been building expectation.”

Jones believes malls can be split into venues that are primarily for shoppers and those where consumers just pop in for a coffee. “With Mall of the Emirates we are somewhere in the middle. We are almost a shopping resort.”

So how can shopping mall marketers stay ahead of the game as the sector goes from strength to strength?

Developers are starting to focus on other Middle East cities, with Beirut and Cairo expected to have 600,000 square metres of mall space each by 2010, according to Retail International. Subject to political tensions easing, Iraq and Iran are also prime candidates for mall fever. The North African countries are also expected to become more attractive to developers and retailers in view of their significant underlying wealth.

Simon Thomson, principal of Retail International, says that the way the GCC population is homogenising, and the prospect of new transport initiatives, will make shopping malls more sustainable in the long-run with bigger target markets.

“The improvements being made with inter-Gulf travel, the announcement of a causeway linking Bahrain and Qatar, plans for a pan-Gulf high-speed railway, all point to greater homogeneity and integration of the retail market,” he says.

He also points to the emergence of a UAE ‘tri-city scenario’ of Abu Dhabi, Dubai and Sharjah, with a combined population of three to four million, which give malls in these areas a wider target market.

For Davidson, the critical point for mall operators is 2010.
“Nearly all of us are going to be relying on the tourist market because the local population will not be enough to fill all those malls,” he says.

What needs to happen now, argues Thomson, is for malls to start releasing consumer footfall and other retail data to give greater transparency to retailers and marketers.

“Now that the Gulf has achieved global recognition for the excellence of its shopping malls there should no longer be any need for developers to be coy at revealing accurate data about their malls if claims and epithets of magnitude are to avoid being tarnished as mere hyperbole,” he says.

“Retailers and investors have significant financial interests in the development of new shopping malls that now routinely involve many millions of dollars.

“They need to be able to judge the performance of malls on a like-for-like basis.

“It is to be hoped that the next stage of evolutionary growth of the industry in the region will see a move towards the publication of mall data and performance statistics comparable to North America.”

The development of loyalty cards — which, in more developed markets, provide retailers and marketers with detailed data about customer’s shopping habits — may satisfy this particular demand, but these appear to be some way off in the Middle East.

Marketers can tailor the sights, sounds and smells of their mall, and make it virtually impossible for consumers to miss their message, but ultimately it is down to the shopper to decide where they feel most comfortable parting with their hard-earned cash.||**||

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