Variety is the spice of life, or at least that's how the phrase goes. However, the willingness to embrace change, discover new winning formulae, or offering customers the opportunities available globally, are things that the Middle Eastern retail sector will have to start considering as the market matures.
By mature market standards, the Middle East still offers ample prospects for mall development. However there is an increasing need for mall developers to understand what actual opportunities those markets hold. Equally as important is the ability to unlock and understand what tomorrow's customers can offer the mall developers over the long-term.
Recent articles based on the current US retail culture suggest that there are an increasing number of malls in 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 shopper demographics may change over time.
Outcome
With so many malls and mixed-use developments announced throughout the Middle East in the coming ten years or so, it is hard to believe that all of them will be successful due to the short time frame in which many of them are destined to be built.
The result could well be that many of them may be trying to impose an unwarranted retail space onto a community that either doesn't need it, or that the destined retail space is at odds with the requirements of the surrounding population.
The point here is that while in the short term there may appear to be a shortage of retail space, the concept of a retail mall is that it offers a long-term lifestyle solution to a resident population that can use it for a multitude of visits and motives.
Changing demography
However, in maturing markets, the population and demographics of a country can change very quickly, and so the essential tool to developing a successful mall is building what the population of tomorrow actually requires.
The levels of retail space are becoming increasingly higher as the likes of Dubai, Abu Dhabi and Riyadh begin to move ever closer towards other mature market benchmarks. The resulting market dynamics suggest, therefore, that whilst market gaps are still in evidence, the opportunities are shrinking and consequently, the need to fully understand shopper demographics presents itself.
As a result, the malls being built now should be reflective not of the requirements of the population that is currently in place, but should incorporate the needs of the population that will be there in five, 10 or even 15 years' time. This will involve a level of succession planning from both retailers and developers, where brand forecasting will be of paramount importance. Simply developing a mall 'shell-and-core' and waiting for it to be leased will no longer be an option.
The writer is head of GRMC Retail Services, Dubai.
