ISSUE 04 SEP/OCT 2015
CIRCUL ATED I N 45 COUNTRIES
Retail Consumer Trends
Featuring: Mr Nidal Jamjoom Trailblazing CEO of KINAN International
shares how the KSA retail landscape will transform in the coming years EVENTS
E D U C AT I O N
Congratulations to His exCellenCy Majid saif al gHurair for being eleCted as CHairMan of tHe board for tHe dubai CHaMber of CoMMerCe and industry The members of the Middle East Council of Shopping Centres (MECSC), the Board of Directors of the MECSC and the staff of the MECSC are honoured and thrilled to learn of the election of HE Majid Saif Al Ghurair to head the Dubai Chamber of Commerce and Industry. HE Majid Saif Al Ghurair played a leading role in the formation of the MECSC 21 years ago with the support and advice of HE Mohammed Al Gergawi. Mr Al Ghurair continues to graciously serve as the visionary leader and Chairman of the MECSC since inception.
coNTeNTS 3 WELCOME 4 RETAILING – THE KINAN WAY 8 GLObAL RETAIL CONsuMER TRENds
Middle East Council of Shopping Centres 803, BurJuman Business Tower PO Box 43972, Dubai, UAE Tel: +971 4 359 7909 Fax: +971 4 355 8818 www.mecsc.org
David Macadam Chief exeCutive OffiCer david@meCsC.Org
Veena Desa advisOr veena@meCsC.Org
Lea Venezuela events exeCutive events@meCsC.Org
Mariz Matocdo team suppOrt exeCutive CustOmerCare@meCsC.Org
Khaye Comanda aCCOunting suppOrt exeCutive aCCOunts@meCsC.Org
Media One Tower Dubai Media City PO Box 2331, Dubai, UAE T: +971 4 427 3000 F: +971 4 428 2261 motivatepublishing.com firstname.lastname@example.org Chris Capstick publisher
seniOr assignments editOr
general manager - prOduCtiOn PRInTED By IPP
25 LEAsING vERsus COMMERCIALIsATION − fOEs OR ALLIEs?
13 uAE CAREER fAIR
26 RETAIL INNOvATIONs – GLObAL TRENds ANd RETAIL CONCEpTs CHANGING THE INdusTRY
15 NExTGEN JORdAN
29 CELEbRATING WITH OuR MEMbERs
16 fIRsT CHRIsTMAs TO LIGHT up THE uAE
30 RETAILING WITH WAsL
20 sMART pHONEs fOR sMART MALLs
32 susTAINAbILITY: THE NExT busINEss MOdEL
24 JTR sCHOOL fOR pROfEssIONAL dEvELOpMENT
34 MANAGING CusTOMER ExpECTATIONs
welcome In this issue, we are pleased to profile CEO nidal Jamjoom, KInAn International, and his thoughts on the dynamic KSA retail landscape. Retail titan Wasl is also highlighted with ambitious growth plans underway. Consumer Trends is our theme in this quarters magazine. With circulation to 45 countries and softcopies delivered to 10,000 readers, our Retail People Magazine is really gaining traction. Our team at the MECSC now receives many great articles from our members who want to be heard about what is trending and new in the retail industry. Please join in the excitement and support us by writing articles about the retail industry which you want to showcase. Veena@mecsc.org handles the Retail People Magazine and would be pleased to work with you to publish your work. The MEnA region retail industry has progressed over the past decade from being less mature than some regions to becoming some of the most sophisticated and advanced retail environments globally. The retail industry in Dubai accounts for 29.6 per cent of the GDP. Retail is truly a pillar of the economy in Dubai.
With 12 million visitors forecasted to arrive this year to Dubai, partaking in retail therapy is part of every visitors experience here. As professionals in the retail industry we all have a stake in the future of retail in the MEnA region. The Retail People Magazine is the perfect vehicle to keep us current in the industry and enables us to raise the profile of our businesses through contributing our thoughts to paper. We truly appreciate the support of or members, writers and advertisers who contribute in so many ways to the success of the Retail People Magazine. Thank you and enjoy this September issue.
david Macadam CEO MECsC
shane Eldstrom, CRx, CsM, CLs, Cdp COO, Al farwaniya property developments LLC MECsC board president
Thank you to MECSC Board Chairman Majid Al Ghurair, President, BurJuman Centre and the following Board Members for their tremendous support, advice and contribution: Salma Shasha’a, Leasing and Marketing Manager, The Abdali Boulevard Company PSC (VP) Shakeel Hussain, GM Business Development, Landmark Group (Treasurer) Mohammed Iqbal Alawi, CEO, Red Sea Markets Co. Simon Wilcock, CEO, Arabian Centres Real Estate Co. Marwan Eskandarani, Group Retail Property Director, Kamal Osman Jamjoom Group LLC Khalid Moh’d Aldhubaie, CLO, Arabian Centres Real Estate Co. Dalia Finj, Chair, MECSC RECon Committee Retail People | 3
“RETAILING – THE KINAN WAY”
Nidal Jamjoom, CEO, KINAN International
K Leith Hoffensetz, Urban Edge Real Estate Consulting 4 | Retail People
INAN, established in 2003, today boasts a formidable lineup of shareholders, including the Savola Group-one of the largest food groups in the MENA and Turkey region, Jarir Investments and Al Zamil. At inception, the strategic direction for KINAN was to assist in the expansion of Panda Supermarkets (a Savola subsidiary) by developing retail centres anchored by Panda. Since joining KINAN seven years ago, choice on where and how to play was foremost to the man who would lead KINAN to the company that has evolved under his watch. As the Managing Director and Chief Executive Officer of KINAN, Nidal Jamjoom is articulate about the mission and vision that is being realised under his skillful guidance and leadership.
Nidal has shaped KINAN’s strategy to that of a fully-fledged master developer of communities, currently focused on residential community development and to support such developments with a growing portfolio of retail malls. Developing properties such as Dana Mall in Yanbu, Aliat Mall in Madina, Roshan Mall & Al Jamea Plaza in Jeddah and other shopping malls in the period 2003 – 2006, KINAN has successfully adapted to changing market demands and needs. By 2009, market evidence indicated that home buyers in Saudi Arabia were seeking complete experience communities with residential and retailing components in place. KINAN flawlessly adapted its strategy realising the need for the developer to remain committed to its projects beyond sales & handover and as such, KINAN grew its in-house expertise in community and property management so as to personally cater for its clients and customers ongoing needs. Today, the management arm of KINAN is one of its major strengths. KINAN utilises its mall development and
“Saudi Arabia is a huge market with immense opportunity for developers who are willing to serve customers right through the journey to home ownership” says Jamjoom.
management expertise to anchor residential developments with community retail centres and associated amenities, as part of its commitment to offer Saudis a complete community experience including quality housing, lifestyle and premium services. From a Saudi perspective, KINAN is offering a distinct point of difference from the usual trend of developers. Rather than selling vacant plots to end users with the risk of delayed development for many years, the KINAN proposition is to develop complete communities with the responsibility for the overall planning of the entire master community and embark on a pre-agreed plan with independent sub-developers for the construction of homes, additional to KINAN’s home construction activity. This approach propels the community under development to full maturity in a reasonable time frame. During the planning phase, KINAN ensures that appropriate weight and consideration is given to community amenities and services, such as parks and landscaping, mosques and other key services. KINAN ensures that all products cater to customers’ diverse tastes in design, style and price points, which leads to an enhanced community offering a variety of architectural designs with high quality standards of construction. The end result for owners and investors is an asset with long term, sustainable value in a desirable community. The Saudi population is clearly supportive of the KINAN approach, as it has witnessed rapid sales in all communities it has developed till date, both in Riyadh and Jeddah. Surveys indicate that over 85 per cent of residents in KINAN’s first residential community: Masharef Jeddah would refer KINAN developments to family and friends. As a result of this positive feedback from
“We definitely aim to serve customers better than anyone else out there, our customer service centre takes care of you from day one up to the time when you have long handed over your home” says Jamjoom.
the community, owners achieve sustainable growth on their single most important investments – homes. The Saudi consumer values the convenience of close proximity community retail and KINAN provides a quality mix of locallyowned retailing concepts combined with international brands in its retail offering. KINAN ensures that their retail centres play a role beyond just retailing, they play host to community activities and also offer opportunities to young and upcoming retailers to test new concepts for market readiness, where feasible. Today, KINAN has 7 major projects at different stages of execution, totalling in excess of 6,000,000m². A total of 2,100 units are under development and will form part of the community experience. Nidal Jamjoom is ensuring KINAN specifically targets the median sector of the housing market by developing homes within the SR1.1M – SR2.5M range and is aggressively
targeting homes in the SR0.65M – SR1.1M range. Through Nidal’s vision and unique perspective on property development and management, KINAN is bringing life to its mission: ‘Serve to Succeed’. Nidal is hands on regarding customer service and believes he has found one of the cornerstones that sets KINAN apart. KINAN’s trailblazing new communities under development in Jeddah and Riyadh, named Masharef and Masharef Hills respectively, are soon to host Cityscape award winning community retail centres. Masharef Hills retail centre took the honours in 2014 and Masharef Jeddah retail centre won the award in 2015. These centres will strengthen community ties whilst offering a premier lifestyle experience. Its retail property portfolio comprises nine shopping malls in seven cities within KSA, totalling in excess of 450,000m² in GLA, with three new malls currently under construction, two of which will be community malls. Retail development pipeline underway adds an additional 20,000m² in annual GLA for the foreseeable future. As a capstone to the complete community experience, plans are underway to add family clubs in KINAN communities already under development – these will include gyms, swimming pools, events hall, play park, jogging trails, multipurpose courts and much more. With a strong pipeline of projects both in residential and retail, Nidal feels the company is just beginning on its journey and ambition to be a top tier integrated communities master developer in Saudi Arabia. For more information on KINAN’s community offering and retail developments, please contact Bandar Nagro Tel: +966 12 651 9393 ext. 188 E-mail: email@example.com Retail People | 5
GLOBAL RETAIL CONSUMER TRENDS
Prakash Menon (PK), Executive Director Thought Leaders Middle East 8 | Retail People
he retail industry has emerged as one of the fastest-growing and innovative sectors during the past decade. Consumers have witnessed the e-commerce boom growing popularity of online sales and are now being courted by retailers through high-end mobile applications. The mantra being Shop anytime from anywhere.
With the increasing level of consumer confidence and comfort with retail formats, the sector is only set to grow further. In the coming year, consumers can expect to see all these trends growing and new ones being introduced to create a large global retail platform inclusive of both the online and offline retail market.
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Mobile is the new shopping Mall Gone are the days of waiting to gain access to a laptop or computer to shop. Today with the proliferation of apps on smartphones, the shopping mall is in your hands. More and more retailers are now launching easyto-use mobile apps that ensure a seamless shopping experience equal to that done via a computer. In fact, to popularise the apps, retailers are offering first time discounts and freebies. The mobile apps, in addition to all the other ways that retailers are already connecting with the consumers, will go a long way in providing consumers with an omnichannel experience.
the younger generation will continue to shape and drive retail Today, all generations have become a part of the retail revolution. Retailers, both online and offline, have started to ensure that their service is not only fast enough to keep the millennia interested and engaged, but also comfortable enough to gain the patronage of the older generations. Considering that the main consumers are the millennia, they will have major influence over how retail, especially the online segment, develops in the times to come. On their part, retailers will have to walk the fine line of ensuring comfort for the senior consumers and speed with efficiency for the younger generation.
retail to go high-tech Technology has taken over all aspects of our life, then how can shopping be far behind? In the near future, consumers can expect to see card-based point of sale systems replacing the traditional cash register. Technology that offers
Multiple shopping points
More and more retailers are now launching easy-to-use mobile apps that ensure a seamless shopping experience equal to that done via computer. in-store analytics with marketing and store design solutions will become commonplace in traditional retail stores. To make the shopping experience more engaging and comfortable, retailers are also experimenting with wearable technology. High-tech brings with it exposure to risks; and to mitigate these risks and encourage the use of new technology, retailers can be seen investing heavily on developing better and more efficient methods of storing and safeguarding consumer data collected through high-tech devices. This investment will go a long way in ensuring security for consumers while registering on online portals or making payments via debit or credit cards.
Quicker and faster service Nowadays, shopping is all about instant gratification and immediate solutions. To ensure that they remain on top of their game, retailers are beginning to take full control of every aspect of their supply chain and are experimenting with new methods of making quicker deliveries to the end consumer.
To cater to a wider consumer base, retailers who are offline will either set up their own portals or start offering their products via a multi-brand e-commerce portal. Similarly, online retailers are also looking to setup offline stores to ensure that they can cater to those consumers who like to see the product and then buy.
products will be custoMised for the target Market Although the world has become one global marketplace, certain products still need to be adapted in terms of colour, design, and use, to suit native requirements of the target market. This adaptation to suit different markets is expected to become a priority for retailers seeking to seize a part of the global market.
retail will go social Some of us have already experienced or at least heard about shopping on Facebook or Twitter, this trend is only going to grow with more social networks joining the bandwagon. Considering that most of the target consumers are on these networks, it is an easy way to engage and cater to a global audience. All these trends are picking up in a major way around the globe. The speed and extent may vary from market to market or country to country, but consumers can be assured that sooner or later they will have access to the best of what retail has to offer. Retailers who succeed in delivering according to consumer expectations will lead the new retail revolution. Retail People | 11
UAE CAREER FAIR
ECSC is the largest retail industry association in the MENA region, offering educational, business development and networking opportunities. The Council partici-pated in the 15th edition of the UAE Career Fair, which was held from April 28-30, 2015 at the Dubai World Trade Centre. Given that Dubai has been named as one of the worldâ€™s leading shopping destinations,
in terms of business, the retail sector accounts for 29 per cent of the GDP of Dubai. With an ever-growing demand for more retail business and malls, this industry is on the rise and holds great opportunities for any young graduate. By participating in the UAE Career Fair, MECSC offers its support and encouragement to Emirati students to explore the retail and shopping mall industry. Retail People | 13
/OCT 04 SEP
ISSUE 03 MAY/JUN 2015
CIRCULATED IN 45 COUNTRIES
COU IN 45
Thriving in Jordan
Raise your profile in our quarterly magazine
al ing: Featur Jamjoom ernation pe AN Int ca al Mr Nid ng CEO of KIN retail lands A asi ars Trailbl ming ye w the KS
Ideas in Food Service!
l Retai umer C ons ds Tr en co ho shares form in the ns will tra EVE
Food Critiques Reveal all
D IN 45 COU
Burn in Issue g Faced by Re s Middle tail in the East
Reta Ente il & rprise Th e ´XX´ Facto r
Wom in Re en tail
Leading retail strategies, trends and opportunities for the F&B sector
5 infue ntial wo men in the re tail se EVE NTS ctor sh | NE are th TW ORK eir
E D U C AT I O N
The official magazine of the Middle East Council of Shopping Centres
The magazine is distributed to its members through mailings, MECSChosted events and other partnerships. The e-magazine will be available on the MECSC website and will also be promoted via the MECSC’s 8,000+ database and 4,000+ social media followers.
Are you a Shopping Centre looking to lease space? Are you a Retailer interested to enter the market or expand your operations? Are you a provider looking to market a product or your services?
Contact MECSC today Email Veena Desa, Advisor, email@example.com Phone +971 4 359 7909
14 | Retail People
Upcoming Editorial Calendar
RECon MENA Special Edition
Fashion and Beauty
RECon MENA Special Edition
Leisure and Entertainment
NEXTGEN JORDAN For the second year in a row, and under the patronage of His Excellency Akel Biltaji, the Mayor of Amman, The Boulevard hosted the Next Generation Networking Reception on May 5, 2015. Event sponsors included Orange Business Services Telecom, R.S.V.P Valet Services, City Mall and The Boulevard in Amman. With over 100 attendees, the Amman Networking Event was a huge success and the weather was perfect. Thanks to the collective efforts of MECSC VP Salma Shasha’a and her team at The Boulevard, along with Jordan’s Regional Representative Maram Enaya.
Nicolas Saba - Abdali CEO, Dr. Munther Haddadin - The Boulevard Chairman, H.E. Akel Biltaji - The Mayor, Shane Eldstrom - MECSC Board President, David Macadam - MECSC CEO, Samih Barbir Abdali Chairman, Taher Al Jaghbir - The Boulevard CEO, and Salma Shasha’a - MECSC Board VP.
David Macadam - MECSC CEO with Shane Eldstrom Board President, Salma Shasha’a - MECSC Board VP, Maram Enaya - Regional Representative for Jordan, and Shakeel Hussain -Treasurer
Oman Salfiti - Owner of Taj Lifestyle Center, Salma Shasha’a - MECSC Board VP, and David Macadam MECSC CEO
Zeid Zebain (L) and Ali Nobani (R) - Four Winters Owners, with Essam Fakhreldin (Centre) - ATICO Owner, Head of Jordan Restaurant Association
Salma Shasha’a, Leasing and Marketing Manager Abdali Boulevard Company
With leading retailers in Jordan, Ali Badreddine - Country Manager AZADEA, Rami Abu Shakra - Owner Abu Shakra Trading, Taher Al Jaghbir - CEO The Boulevard, Imad Bukhari - CEO The Group (Hamleys, Cozmo Center, BHS, Readers), Samih Barbir - Chairman Abdali, Reem Sahouri - Marketing Manager AZADEA, Salma Shasha’a - MECSC Board VP, and Riman Shami - Marketing Coordinator The Boulevard
Retail People | 15
First Christmas to light up the uae
Local craftwork in XXL size: a centre with customers proud of their region
A Dr Kersten Rosenau, CEO and Owner, First Christmas 16 | Retail People
large German shopping centre company wanted to know what impact seasonal decorations really had on customer perception: the results of the research hit like a bomb! Customers not only perceived the atmosphere as being greatly enhanced, higher scores were also achieved for the tenant mix, car parking, access to the centre by public transport and nearly all other key factors of the shopping centre. â€œIn the eyes of the customer, good decorations simply change everything and they start to see everything through rose-coloured glassesâ€?, says Dr. Kersten Rosenau, CEO and
owner of First Christmas. MECSC member, First Christmas, is one of the most important companies in the business worldwide and also working in the Arab world.
Classical, opulent and elegant: a centre with prosperous, yet traditional customers
XXL and ‘Wow’: a large city centre
Whether for Ramadan or for the Christmas season, First Christmas is aware of current trends. “Design and once again: design! Made-tomeasure, of course, for each client and their individual needs” Rosenau says. As the architecture and the interiors of shopping centres become increasingly more sophisticated, so do the decorations. These just cannot be from the peg. Westfield London has to be decorated completely different than the GUM in Moscow or the Mall of Berlin: each centre naturally has its own DNA.
A top Disney-like attraction for children and families. The centre’s branding is ‘We are family!’
The visitors can feel this too. If everything fits well together, then the positive effects are further enhanced. To make this happen, first-class designers are a must. First Christmas is proud to have a world-class team. With the demand for high standards, budgets are also increasing. Amounts of AED 2,000,000 are not unusual for a decoration scheme, and there are also centres spending AED 5,000,000 or more. This is where a further trend comes into play: quality! The quality can be seen by the clients, who are impressed,
Totally hip and cool: this centre wants to attract the Apple Generation as its customers
enthusiastic and proud of their decorations. Quality also means that decorations can be used for several years without any problems: here the investment really pays off. ‘Think big’: gigantic objects are also in vogue. New York sets the standards here with its spectacular Christmas decorations, as well as its extravagant shows. First Christmas boss Rosenau: “First-class decorations in connection with great music and spectacular light effects to create a show is a big topic for us at the moment!” www.firstchristmas.com
Elegant and glamorous: a luxury hotel in a top Berlin location
Breath-taking! The light decorations perfectly enhance the centre’s architecture: Westfield London
Action at a distance: the centre can be well seen from afar
Retail People | 17
The RiTz CaRlToN international financial centre, dubai, uae November 1-3, 2015
GREAt tO LEGENdARY
COnfeRenCe, exhIbItIOn &
ICSC MenA AwARdS Plus expert Speakers including:
KeyNoTe SPeaKeR Ron Kaufman , Founder, UP! Your Service ‘the world’s leading educator and motivator for uplifting customer service and building service cultures’
nick Peel Chief Executive Officer Marka PJSC
Stephen Lebovitz Chairman iCSC
Ahmed Ismail Chief Executive Officer Majid al Futtaim Ventures
fuad Mansoor Sharaf Senior Director – Property Management Majid al Futtaim Properties
Stephen holbrook Group Director – clothing division Kamal osman Jamjoom
narain Jashanmal Client Partner Retail & Ecommerce Facebook
Rania Mushtaha Director Retail Meraas holding
nisreen isreen Shocair President Virgin Megastore Middle east
For further information: www.reconmena.com To register contact firstname.lastname@example.org or call +971 (0)4 359 7909
ICSC MENA Awards Gala Over 50 Award Entries 3rd November 2015 6pm
Key BeNeFiTS oF aTTeNdiNg Unparalleled networking opportunities with key players in the retail sector from Gcc and international New this year! exclusive deal â€“making sessions and executive Conversations designed for ceos led by ron Kaufman learn about the latest regional and international retail trends and likely economic conditions to impact your business discover the latest technologies and solutions for the retail industry in the exhibition area Understand the importance of customer service in driving your retail business from great to legendary
NeTwoRKiNg exhiBiTioN over 26 participating Companies
gain knowledge on important mall projects in the middle east
ShoPPiNg CeNTRe MaNageMeNT
PASt Attendee PROfILe Organised by the largest Retail Industry Associations
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Building retail excellence
Building retail excellence
Building retail excelle
Smart PhoneS for Smart mallS
Ivana Gazivoda Vucinic, CMD, CLS, Manager Retail Analysis at BurJuman 20 | Retail People
mart phones are expanding the understanding of the commercial universe around us. We can collect information easier, faster and with lower cost than ever before. Implications and benefits of the collected data are multiple, and shopping centre industry is grabbing the chance to convert the data into the profit. The more data we collect on the shopping patterns of mall visitors, the higher the probability that the future strategy will duly address and accurately forecast the needs and expectations of mall customers. Informed decisions have
very little to do with intuition and subjective judgments â€“ decision makers are expected to know who their customers are, how they shop, how long they stay in a mall, when and why they shop; and analysing additional patterns of shopping behavior can also help enhance the mall property which will lead to the increase of the property capital value. The collected data assists in optimising the merchandise and creating an ideal tenant mix, along with adjusting the marketing course to communicate more personalised messages to the target groups.
The perceived rivalry between the online and offline world might not be as fierce as it is often portrayed. To some extent, online sales indeed affect the turnover of the brickand-mortar stores negatively. On the other hand, the possibilities of enhancing customers’ experience in a physical world using online platforms are truly limitless. Smart phone users (connected to a mall’s open Wi-Fi) can provide valuable information about their behavior through log-in and signal tracking system. This in turn can be analysed to improve the offering and the environment and stimulate customer’s desire to come back often, stay longer and spend more in a specific retail destination. In the past, few techniques were used to learn about shopping habits of the mall visitors, and those were usually limited to intercept surveys and focus groups. The methodological issues were numerous (sample structure, expertise of interviewer, high cost) and failed to create an accurate portrayal of the visitors’ shopping routine, as the studies would usually encompass only one or two weeks in a given year. Eventually, the shopper traffic counters evolved to provide not only generic visitor numbers, but also the breakdown by age and gender, and assisted in examining the customer base. With the arrival of smart phones came the revolution in this segment: from the analysis perspective, smart phones are remarkably similar to website cookies, as they reveal information about the physical movements of customers throughout different mall areas. As of today, the mall rent is an estimated or realistic function of the sales generated within the store. In an ideal situation, good performance means that the tenant is reaching the turnover revenue threshold and shares the portion of the extra profit with the landlord (commonly known as ‘turnover rent’), as a reward
The possibilities of enhancing customers’ experience in a physical world using online platforms are truly limitless. for the management efforts to continuously optimise the property. The trend of ‘showrooming’, which represents the act of browsing items in brick and mortar store before purchasing them online, limits the landlords’ capacity to charge
the turnover rent. In future, smart phones data can be used to measure the traffic to each store and thus the lease agreements might evolve from turnover-based rent to traffic-based rents, in a case when a given store is used for showrooming rather than for direct sales. There are already announcements that several malls in North America are planning to introduce this rent-charging system for specific retailers. In addition, the data collected through smart phones’ signals can positively impact the indoor revenue, as the advertisers would be able to precisely measure the potential of the most suitable advertising options based on their reach and CPM.
Retail People | 21
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JTR SCHOOL FOR PROFESSIONAL DEVELOPMENT
2015 JTR Levels 1 and 2
David Macadam, CEO Middle East Council of Shopping Centres 24 | Retail People
ne of MECSCâ€™s roles in the region is to offer education and awareness about the retail sector. JTRâ€™s 5 day programme, held from May 24-28, 2015, at the Shangri-La Hotel Dubai, covered comprehensive, concentrated, rigorous courses taught by prominent shopping centre industry experts from the USA, Europe and the Middle East who serve as faculty. Every year JTR receives tremendous support from the region,
with this year setting a record number of 113 students. In conjunction with JTR, a Next Gen Networking Event was held on May 27. Sponsored by McArthur + Company, Emirates Airline, Brands International Menswear and Dalma Mall. We thank our sponsors for their support in so many ways! A boisterous crowd of 200+ attendees enjoyed this networking event and was a great success by every measure.
Leasing versus commerciaLisation − Foes or aLLies?
S Gergely Bodó, Head of Retail Leasing, TGM
Simona Ioana Ion, Head of Commercialisation, TGM
ome developers consider commercialisation as part of the leasing activity although commercial leasing per definition means the longer term rental contracting of leasable premises which are defined as GLA of a commercial asset. Commercialisation (or Speciality Leasing) however, specifically focuses on generating income from non-GLA areas and for shorter periods, typically within 12 months. As retail markets develop, the role of commercialisation becomes increasingly important, moreover, it claims its independent role within the professional property management scope. Commercialisation should represent up to 5-10% of the total NOI of a commercial asset - this alone sheds enough focus on this service line, especially when we analyse how and when it overlaps with traditional leasing and how landlords can maximise revenues without creating a constant conflict between long term and short term retailers. Commercialisation, as a short term leasing format of non-GLA areas, usually takes diverse forms such as Retail Merchandising Units (RMU’s) or kiosks always intended to be positioned either in high
frequency areas within the mall or specifically attached to certain anchors, profiles, clusters, thus leveraging on the complementary role of these vending modus. As retailers learnt the ways of the landlords and experienced the sobering repercussions of the financial crisis in the real estate sector, instead of signing long term leases some of them intend to “try” the shopping centre by taking a Retail Merchandising Unit (RMU) or a kiosk with an option to switch to a proper unit upon expiry. The freedom of “stay or go” of the short term leases creates the real value and buzz in commercialisation and that is what makes a well operated shopping centre lively in addition to the slower changing tenant mix. And this is where the responsibility of the property manager comes in. In an ideal world established brands take GLA and with proper strategy, they ensure the
necessary footfall and turnovers, while commercialisation is focusing on the opportunity driven, ‘wannabe’ or simply experimental type of brands and activities which are supposed to be perfectly blending in the big picture and should play a complmentary role by adding profiles and brands not present on GLA. Although there is a clear distinction between GLA and non-GLA tenants, the problem that property managers increasingly face is how to properly follow this distinction with the leases. The line between commercial leasing and commercialisation sometimes is a very thin one. The good manager aligns longer term strategies by fixing long term and established players on GLA while securing and constantly revising short term leases on non-GLA areas and encouraging short term tenants to convert to longer terms having carefully evaluated their performance, their brand and functional value for the overall shopping centre. The interest of the owner is best served by this everyday cooperation between leasing and commercialisation, therefore these two service lines are far away from being foes, they are the strongest allies in securing the delivery of the required KPIs of a commercial asset in the long run. Retail People | 25
Retail innovations – Global tRends and Retail concepts chanGinG the industRy
hen looking at retail across the globe, there are clear indicators that the industry is changing at an accelerated pace. The way consumers communicate and shop is shifting, e-commerce and m-commerce is gaining global momentum, and the growing internationalisation of brands further boosts the competitive landscape. As a result, retailers need to step up their game and innovate by constantly refreshing their ideas, by keeping their concepts relevant for tomorrow´s shoppers and by integrating innovation into their organisation´s DNA. For the past ten years at Ebeltoft Group we have closely monitored global developments in retail by compiling an annual study called Retail Innovations, a synthesis of the most relevant trends from around the world detailing how these trends materialise in-store with case studies from over 25 countries. Looking back, the diversity of trends has been intriguing: how they mature over time and how new ideas and concepts emerge across the globe almost simultaneously, demonstrating the strong international dimension of today´s market and shoppers. Local teams submitted cases from across the globe to an expert jury who reviewed a wide range of concepts, from brick and mortar to pureplay and everything in between, and identified the 7 major global trends in retail innovation that are here to stay:
1 Curated ColleCtions lourens Verweij, Global Manager, Ebeltoft Group Works with retail advisory firms around the globe, his work is comprised
retailer Outfittery and American retailer Trunk Club offer ‘try before you buy’ menswear delivered to the home or office, a curated clothing service based on personalised online profiles completed by customers and sessions with the company´s fashion stylists.
of Strategic Alliance Management and International Expansion Development. Furthermore, Lourens conducts and co-authors global retail, trend and consumer insight studies and publications. 26 | Retail People
The heart of successful retailing lies in creating a coherent and compelling assortment for customers. Today, consumers are faced with greater access and more choices than ever before, so retailers must deliver assortments that are brought together in a unique way. The German
distinguishes between a leader and a follower.” Steve Jobs
Once predicated on scale, with many SKUs in store and focused on pricing, customization in retailing is reaching critical mass. The US retailer Birchbox allows customers to build their own box of cosmetic products, creating a customisable experience in their SoHo flagship store.
4 HypEr loCal
There is real power in truly being local. The trend has been around for some time but retailers are bringing it to the next level (hyper local) by demonstrating how local, organic and meaningful it can be. Au Bout Du Champ in France brings click and collect to locally sourced and fresh products with small individual lockers in downtown Paris.
Retailers are breaking new ground by creating differentiated business models and concepts that recreate a category. The Dutch retailer Bilder & de Clercq reinvented food retailing, positioning their concept as a ‘cookbook’ offering fourteen dishes rather than aisles of product.
7 tECHnology intErvEntion
5 onlinE offlinE masHup
3 ExpEriEntial rEtailing
The global growth in popularity of e-commerce and low price commoditisation has forced retailers to rethink the role of the store. What is the actual proposition of brick and mortar? With the goal of developing the optimal Italian food experience, Eataly Smeraldo in Milan emerges shoppers in the rich heritage of its gastronomy.
With the industry focusing on cross-channel and omni-channel, it is important to remember that it is still about retail. Concepts focusing on this trend blend best practices from both the online and offline worlds to deliver the optimal experience to the consumer. UK retailer Argos created the perfect brick and mortar showroom, complete with digital ordering stations, only stocking essential products in-store and offering free home delivery on out of stock items.
A type of enabling tool, technology allows customers to bring things together, have more choice and information than ever before and experience solutions such as a seamless check out. TeamLabHanger in Japan takes in-store communication to the next level using interactive clothing hangers and demonstrates how technology is applied to create value in the customer´s shopping experience. Looking at these trends in the near future, evidence will show how they further develop with even better examples of retail concepts, thereby raising the bar for the industry, and likely intensifying elements of technology, omni-channel and clear relevance for the shopper. Retail People | 27
conGratulations 2015 Gold ViVa aWard “the best of the best” Winners!
ICSC VIVA Awards honors and recognises the most outstanding examples of shopping center marketing, design and development, sustainability and community service worldwide. Gold winners from all regional competitions are automatically entered to win. Special recognition goes to: • McDonald’s Egypt-Sodic, Cairo, Egypt • Dhamani 1969, The Dubai Mall, UAE
Giordano celebrates 20 years in the KinGdom of saudi arabia (Ksa)
(L-R): Ahmedullah Abdul Hadi – General Manager, Giordano Saudi Arabia Ishwar Chugani – Managing Director, Giordano Middle East Hani Saab – Chairman, Giordano Saudi Arabia Mohamed Jeelani – Regional Director, Giordano Saudi Arabia
Giordano, the global apparel retailer and one of the top five clothing brands in the Arab world, celebrated 20 years of successful presence and growth in the Kingdom of Saudi Arabia this April. From its first store at the Al Faisalia Mall in Balad, Jeddah, Giordano has opened an average of over four stores per year across the Kingdom establishing 100 stores in 2015.
forbes middle east’s top 20 indian leaders in the arab World 2015 Ishwar Chugani, CEO and Managing Director of Giordano Middle East FZE and Executive Director of Giordano International was hailed by Forbes Middle East as one of the Top 100 Indian Leaders in the Arab World this year. Ishwar was placed among the top 20 of the most influential Indian leaders in the region. Retail People | 29
Retailing with wasl
Leith Hoffensetz, Urban Edge Real Estate Consulting
Zainab Mohammed, CEO Property Management and Marketing Wasl Properties 30 | Retail People
asl is one of the oldest and most distinguished property management companies in Dubai. As the asset management arm of the Dubai Real Estate Corporation, wasl has traditionally focused on residential properties and has over 30,000 units under management. These days, as consumer needs and demands change, enhancing its focus to concentrate on retail offerings across
the city, as well as residential developments. As Zainab Mohammed, CEO Property Management and Marketing, wasl properties will attest, the environment is changing. The traditional G+4 residential development with retail on the bottom has had to re-invent itself. And when you look around, it is easy to see that wasl has indeed excelled at re-inventing its offering.
These days, wasl provides a strong retail component to its residents through the inclusion of community centres. Zainab says that all new residential developments from the Dubai Real Estate Corporation are required to have such centres. These centres should have a design which blends in with the residential community it surrounds; not be stand-alone but be seen to be a continuation of the one development. When asked about the main points of distinction between wasl retailing and the traditional retailers in the region, Zainab Mohammed explains: 1. Target market: “The primary target customers will always be the community and not tourists or the general public. Our retail offering is driven by the needs and demands of the people who live in the wasl communities.” 2. Complementary role: “wasl retail is not intended to be in competition with traditional retailing. Instead, wasl retail complements the large shopping malls. wasl retail is intentionally a neighbourhood retailing concept and as such, we do not necessarily focus on attracting international brands. Instead, we focus on the every day needs of the communities we serve.” 3. Tailored offerings: “As a neighbourhood retail offering, we ensure the tenant mix is priced to suit our
communities. If we have a community where the average income of the occupants is high, we may offer luxury brands. The concept is that we offer brands geared to the average income level of the community it serves.” 4. Flexibility: “As a neighbourhood offering, we are mindful to ensure consistency and continuity. Therefore, we offer favourable terms and have the flexibility to adjust rental terms dependent on the business and the community requirements.” 5. Tenant mix: “Because we have such flexible terms and our pricing points are different to that of the large shopping malls in the region, our tenant mix is also varied.” dar wasl is the latest mixed use development to be managed by wasl, with units from 60,000 square feet Moroccan architectureinspired development currently being released onto the market in stages. The first set of 20 villas have been launched from the AED 500 million project, which is located close to Safa Park on Al Wasl Road. The Andalusian heritage-designed development features 108 units for commercial applications. Of these, 87 units will be dedicated to retail; including supermarkets, fashion outlets, nail spas and laundry services, while 21 will be allocated
for restaurants and cafes. dar wasl’s retail centre is expected to fully open by March of next year, providing residents with a full array of options right on their doorstep and acting as a magnet for visitors from outside of the area. When asked about how the new dar wasl development differentiates from other retail community malls in the area, Zainab explains that the other offerings are only retail and draw from the existing residential areas around them. Her view is that the offering is secure for its tenants, as the retail component has an assured customer base found in its residential community.
wasl is a success story within Dubai and Zainab explains that wasl has a large internal team which assesses development design and standards, sets the criteria and standards for development and subsequently monitors and enforces guidelines and standards for all its developments. Clearly, the success of wasl is found in its people and its ability to maintain the assets it is contracted to manage.
Retail People | 31
SUSTAINABILITY: THE NEXT BUSINESS MODEL
T Edurne Gil de San Vicente, Partner at Open Doors Consulting firstname.lastname@example.org www.ae.linkedin.com/ in/edurnegil
32 | Retail People
hE GoldEn nuGGEt The other day I was facing a message in my inbox saying that I have reached the mailbox capacity only to find out the culprit: the galactic number of newsletters and group’s updates I am receiving. Before getting rid of most of the subscriptions I decided to have a look, and found a golden nugget!! The latest Nielsen Global Survey (June 2015) that made my day. The survey report’s title said it all: “Looking to achieve new product success? Listen to your consumers”. Basic. Yet, Nielsen highlights that consumers’ reasons for purchasing aren’t always in alignment with what they say they want. In other words, existing offerings are not currently fulfilling some needs. The key revelation from the survey is that consumers want more new products on the market that are affordable, healthy,
convenient and environmentally friendly. This desire for more affordable and sustainable new products discloses the fundamental changes our world is going through and sends a clear signal to the retail industry. The scope for gaining competitive advantage by changing a product’s composition or by creating a cleaner supply chain is definitely expanding.
Although these concerns are most pressing in consumer product markets, they affect business-tobusiness environments, too. McKinsey defines Sustainability as a term used to describe the business programmes, products, and practices built around environmental and social considerations. It is often seen as a luxury investment or a public relations tool, but in fact, a growing body of evidence indicates that sustainability initiatives can help to create profits and business opportunities.
INNOVATION FROM WITHIN MATTERS Profits with purpose can only happen if change comes from within the
industry. Better to start with a deep analysis of your current business model revealing bottlenecks: waste of resources, rising raw-material prices, risk, employee disengagement, or environmental and social degradation caused by operations, to name a few. Success requires both a structured programme to improve performance and a sustainability philosophy guiding your company’s strategy.
MARKS & SPENCER: THE BUSINESS CASE FOR SUSTAINABILITY The fundamental questions described above have been at the source of one-of-a-kind revolution, when in 2007 Marks & Spencer (M&S) launched ‘Plan A’. Plan A, because there is no plan B. With a number of 180 commitments, M&S is continuously on a mission to become the world’s most sustainable retailer: “we’re doing this because it’s what our customers want us to do. It’s also the right thing to do.” M&S has fully embraced Sustainability, in depth and breath. Central to their goals are carbon neutrality, zero waste to landfill, sustainable raw materials, improved living conditions for the people working in their supply chain, and improved (healthier) lifestyle for customers and employees. Mike Barry, M&S Plan A director explains in 4 points why it makes business sense:
1 Last year alone M&S has made a net profit of $290 million from Plan A, counting new business opportunities and improved efficiency. 2 Consumer trust in the marketplace has been consolidated as premium. 3 M&S employees are motivated to work with a purpose, making the company more attractive as an employer. 4 Our supply chain has become more resilient and stronger in the long term, helping our business become more robust.
It is not just about savings, nor tangible results only. It is about taking a systemic approach to embrace all possible business benefits. M&S demonstrates that better financial results with a shared social and environmental value are the next business model. This has been achieved through radical innovation: developing new business models, new ways of working, and new ways of interacting with customers. The good news is that you can do it too. Catch the golden nugget!
Profits with purpose can only happen if change comes from within the industry. Retail People | 33
MANAGING CUSTOMER EXPECTATIONS Giordano Shares Best Practices
Ishwar Chugani CEO and Managing Director of Giordano Middle East (FZE) Executive Director and Board Member of Giordano International, Hong Kong. 34 | Retail People
As one of the region’s fastest growing brands, Giordano has changed the face of apparel retailing, not so much in terms of trends, but by breaking down clothing to its basic elements. The company’s simplistic approach to fashion is complemented by its success in creating a multifaceted approach to customer service. People are always talking about customer service, whether it’s to praise, criticise or demand. But what really defines effective customer service and what does this mean to our bottom line? In the textbook sense, customer service is defined as the delivery system of a product or service, and the manner in which the customer is treated upon entering a store. It includes the employees and the policies, practices and procedures they put to use. However, there is no guidebook on delivering the best in customer service, rather it is an instinct, which continues to evolve. We are in the customer experience business where a future purchase is directly impacted by how customers feel about doing business with you, rather than what they think about your product or service. Experiences are what consumers’ value most. Businesses must be finely tuned to what customers think and feel, as well as observe what they do in order to anticipate the customer’s needs and desires. Never lose sight of your customers; strive to understand their needs and buying patterns. A company must maintain constant contact through customer surveys, product reviews, regular telephone contact, and feedback cards. When an organisation is imbued with this kind of empathy for customers, employees are more likely to anticipate and respond to customers in a consistent and reinforcing manner. Customer experience is affected by signals, which leave a lasting impression on shoppers. These signals may be rational or emotional, each carrying a message, suggesting something to the customer. Sensitising your people to recognise and evaluate customer signals is an essential part of experience management. The goal is always the same: eliminate negative signals; overhaul neutral ones to enhance a
positive impact; and insert a variety of positive signals that encourage brand loyalty. Customers will tally every signal they encounter as they experience your business, product or service. A carefully crafted experience ensures that every signal is tailored and targeted to register or reinforce a specific take-away impression and never detract from it. Experience management systems are designed from the perspective of the customer. The experience signals are synchronised with customer desires at each step of the experience from learning and selecting a product or service; to purchasing and ultimately using it. By managing the signals your business emits, you can establish a template for the experiential expression of your brand. These are your tangible brand ‘edges’. Customers value experience so highly that even a slight improvement can contribute to building greater customer loyalty. The goal is to create a broad experiential ribbon for the customer by creating signals that tie back to the specific targeted customer impression. In this process the business can leverage the full preference-building powers of experience. Remember, customers expect your core service to be good, or they wouldn’t use your product or service in the first place – can you exceed their expectations? Welcome to the experience economy, where what you sell is less important than how you sell it. Forget about product differentiation, retail today is in short supply of distinct experiences, create one, and you will establish a long-term relationship with your customers. Your competitors may be able to match your products and services feature for feature, but the experiences you create are yours alone; this is your true competitive advantage.
Globally, Giordano International operates over 2,800 stores in 40 countries with plans to explore many more untapped markets across the world.
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