Demographic insight key to successful malls

The tried and tested formula of offering mall-based retail space to a willingly accepting consumer and shopper base in the Middle East offers mall operators very little in the form of a desire for something different. As a result the willingness to embrace change, discover new winning formulas for successful retail outlets, or possibly offer the type of varied opportunities available to customers elsewhere, are things that the Middle Eastern retail sector will have to start considering as the market not only matures in the coming years, but in the short term continues to weather the economic softening.

By established or mature market standards the Middle East still offers good prospects for mall development, however, there is an increasing need for mall developers to understand what actual opportunities those markets hold for them. Equally as important as understanding these market-based opportunities, is the ability to unlock and understand what the customers of tomorrow can offer the mall developers of today over the long-term.

Recent articles based on the current US retail culture suggest that there are an increasing number of malls throughout the country that have been developed with little focus on the immediate and regional demographics in mind. Alternatively malls have also been built using the current demographic status quo with little thought as to how this may change.

With the many malls and mixed-use developments that have been announced throughout the Middle East in the coming ten years or so, it is hard to believe that all of them will be successful. The result could well be that many of then may be trying to force an unnecessary and/or unwanted retail space into a residential community.

The point here is that whilst in the short term there may appear to be a shortage of retail space, the very concept of a successful retail mall is that it offers a long-term lifestyle solution to a resident population that will look to use it for a multitude of visits and motives. However, in maturing markets, the population and demographics of a country can change very quickly, and so the essential tool for developing a successful mall is building what the population of tomorrow actually requires.

The levels of retail space are becoming increasingly higher across all of the main GCC cities. The resulting - and more importantly shifting - market dynamics suggest that although market gaps are still in evidence, the opportunities are diminishing and consequently the need fully to understand the shopper demographic presents itself as an ever greater challenge.

The malls being built now should therefore be reflective not of the requirements of the population that are currently in situ, but should incorporate the needs of the population that will be there in 5, 10 or even 15 years time. This will involve a level of succession planning from both retailers and developers, where brand and demand forecasting with a specific relevance on the surrounding population, will be of paramount importance.

The writer is Head of Retail Services, GRMC Advisory Services.