Saudi mall owners rush to add 'experiences' - even art installations - to get shoppers

Dubai: Saudi Arabia is building new shopping destinations - and reworking older malls to make them meet the needs of the present.

It has led to mall owners create better experiences around outdoor spaces available to them (when the weather allows it), bring in art installations, and even host interactive exhibits and events.

Because 'shoppers are becoming more selective, expecting something beyond just retail and seeking out more engaging experiences', according to a new report from Knight Frank.

"Lifestyle destinations have become more than just malls – they are vibrant community hubs,” said Faisal Durrani, Partner - Head of Research for MENA markets at Knight Frank.

In Riyadh and Jeddah, the lifestyle retail space is set to increase nearly 600,000 square meters to 1.31 million square metres by 2027. In the recent past, Saudi Arabia's malls have benefitted immensely from the return of cinemas.

But more can be done, and this is where mall developers are busy adding new experiences.

"These locations offer a combination of exciting retail, place-making and immersive experiences that attract visitors not only for shopping but for socialising, entertainment and events," said Durrani.

But the prospects in Saudi retail sector are immense, and retailers are rushing to find new ways to keep the growth going.

Just recently, Dubai's leading business group, Al-Futtaim, said it is spending billions to take shareholding in Saudi entity Cenomi Retail. Other UAE and Gulf entities are also making a move to expand their presence in the Kingdom.

"With the Kingdom actively working to attract leading global brands and entice the collective spending power of both tourists and Saudi residents, we expect this robust growth to continue," said Jonathan Pagett, Partner – Head of Retail Advisory, MENA for Knight Frank.

"However, competition is fierce across the Kingdom, with a strong pipeline of projects in Riyadh, Jeddah and Al Khobar. Creating unique retail offers with new-to-market concepts is critical to maintain strong performance and high retail sales densities.”

One trend that's running hot in Saudi retail is the growing presence of designer cafes.

The opening of the Dior Café pop-up in Riyadh and Ralph's Coffee mark a significant milestone in Saudi Arabia's luxury retail and F&B sector," says the report. What this does is show a 'growing trend that could pave the way for more designer cafés and lifestyle experiences within the Kingdom."

According to Konstantinos Papadakis, Knight Frank's Associate Partner – F&B Consultancy, MENA, "With the luxury retail and hospitality sectors flourishing, the Kingdom is fast becoming a key location for global brands seeking to establish a footprint in the Middle East.

"The combination of iconic retail outlets, high-end dining, and experiential venues puts Saudi Arabia firmly on the map as a leader in lifestyle retail.”