The current retail supply in Dubai has reached approximately 3.15 million sq m as per the latest report from CBRE. There are several new retail projects under construction and contribute to an additional 1.65 million sq m of supply.
Retail rents are under considerable pressure with landlords offering significant reductions to secure new and international brands to their schemes. Leasing incentives such as extended rent-free periods, capex contributions, flexible payment terms and turnover rental structures are now being offered by landlords to continue to attract these retailers. From enhanced in-store experiences to developments in payment technology, it has been an exploratory year for both retailers and consumers alike.
Property Weekly takes a look at the top five emerging themes impacting both retailers and consumers.
The rise of e-commerce
As the emirate grows, consumers are ever searching for more cost-effective and convenient ways to shop in a bid to avoid traffic, lengthy car trips and parking challenges. Visiting malls remains an important leisure option for residents but there is definitely a growing appetite for online and mobile shopping.
This means consumers still value the physical presence of their favourite brand but are increasingly relying upon retailers’ online and mobile platforms to purchase goods.”
New platforms are on the rise, with Noon.com recently announcing that eBay will be brought to the UAE later this year. Customers are visiting stores to experience brands in person, but are then placing their orders online. Ultimately, this means consumers still value the physical presence of their favourite brand but are increasingly relying upon retailers’ online and mobile platforms to purchase goods. More than ever, brands need to ensure an integrated approach, which combines standard bricks and mortar retail with the latest digital technologies to give consumers a holistic brand experience.
Increasingly, retailers are working together to secure a larger customer base, pairing sectors that historically would not occupy the same space. Customers are reaping the benefits of this enhanced customer experience across Dubai, which sees new concepts such as garden centres harbouring organic food cafes and petrol stations accommodating restaurants.
The key lies in exploring and identifying partnerships that have the potential to provide a cohesive shopping and entertainment experience, which will succeed in increasing footfall.
The digital transformation of retail technology is not limited to remote online experiences. In fact, new technologies such as artificial intelligence, voice-controlled commerce and augmented reality are working seamlessly with in-store experiences to create an experience that cannot be achieved online. Restaurants are moving towards a more interactive experience for their customers, whether this is through the fit-out in their unit or how the customer is able to order. A great example is the Beesket Juice bar in Sunset Mall Dubai, which provides customers with an interactive experience when choosing which fruits to put in their smoothie.
Retailers who harness immersive technologies at this early stage will be able to provide a better retail experience for their customers by blending the physical and the digital into one interactive experience. A personalised shopping experience can only help to improve customer service leading to a better rate of conversion both online and in-store.
Understand customer behaviours
With consumers asking for new and innovative experiences at every turn, retailers are rising to the challenge. A trend towards making the experience more engaging and educational is materialising as the importance of forging a consumer connection proves integral to ensuring future success.
• Nakheel Mall – Palm Jumeirah
• The Pointe
• Al Khail Avenue
• Deira Mall
• Gate Avenue DIFC
• Dubai Hills Mall
• Meydan One Mall
• Silicon Mall
• Avenues Mall
• Cityland Mall
• Night Souk
With the rise of technology and the introduction of devices such as beacons, which provide in-store analytics and marketing solutions for brick-and-mortar retailers, merchants will be able to reach their customers when they are within close proximity to the store to inform them of a special offer or new arrivals. Retailers have access to the type of audiences they attract as well as analytics such as the frequency of their visit and the consumer behaviour, which helps retailers devise a marketing plan to cater to their customers’ needs.
The traditional credit card payment system is no longer the preferred method when it comes to paying retailers. Mobile payment solutions such as POS systems, custom mobile payment apps and third-party options are all gaining traction as customers look for faster and easier ways to pay for goods and services. In the UAE, Apple Pay, Emirates NBD Pay, Etisalat Wallet, Mashreq Pay and Beam Wallet are all being used on a daily basis.
Emily Sturgis is associate director of strategic advisory at CBRE Middle East. The views expressed here are her own.