Dubai: In Dubai, the traditional and the virtual form of shopping mingle almost seamlessly.
On a day (March 28) when the world’s online retailer of choice, Amazon, secured a direct presence in the region by acquiring Dubai-based Souq.com, the Dubai Festival City Mall opened its doors to the newest department store attraction in the city — Robinsons. It represents a debut opening for the Singapore-headquartered 150-year-old department store, which, incidentally, was acquired by Al-Futtaim Group in 2008. It also has a presence in Malaysia. (Al-Futtam Group is also the developer of Dubai Festival City.) There was also a first-time UAE appearance for the UK’s revered retailing brand John Lewis, which takes up position as a shop-in-shop at Robinsons. Another John Lewis-owned brand, the Waitrose supermarket chain, already has a presence in the city.
For Dubai Festival City, the Robinsons opening caps a significant moment in the mall’s Dh1 billion plus expansion. The destination has already gone through an extensive makeover, stretching its outer boundaries to being as near to the canal-side as possible, offering more luxury-focused labels, a vastly expanded F&B option, and, now, Robinsons and John Lewis.
Visitor traffic to the Mall started to record some significant gains once some of the key milestones in the expansion were in place. And this sort of momentum is what it hopes to maintain with the Robinsons opening. There are other possibilities the brand can open up. Robinsons, for which the Al-Futtaim Group has a partnership with the luxury retail house Chalhoub, could find a home in some of the other shopping centres the Group is creating. Or go in as one of the anchor tenants at malls that other developers are building.
Bloomingdale’s and Macy’s
As such, the department store concept is in for one of its best phases in the UAE and elsewhere in the region. Kuwait saw the opening of a Bloomingdale’s (at the 360 Mall) this month, while Abu Dhabi’s under-development Al Maryah Central will play host to the first Macy’s outside of the US. Not just that, there will be a Bloomingdale’s in Abu Dhabi, too. (Macy’s owns the more upmarket Bloomingdale’s.)
For the US department store majors, key overseas territories represent the next big hope for their growth chances. In their home market, a combination of factors, not least the significant attention generated by online options, has shackled prospects.
But Europe continues to have a conducive environment for department stores, and in Asia these destinations still hold their ample attractions despite the onslaught from online. The same holds true for the Middle East shopping environment.
“When visiting a new prime department store, customers want to discover brands they may not be familiar with and exclusive products,” said David Godchaux, CEO of Core Savills, the consultancy. “As long as department stores are successful in meeting this criteria, we believe they will not go out of fashion.
“The likes of Harrods will never go out of fashion as they are a cultural icon and have established themselves as a must-see tourist destination. Shopping in one of the oldest department stores in the world makes it an experience in itself.
“The formula of remaining slightly exclusive and establishing a tourist attraction in a particular city seems to be the key to success, unlike “copy-and-paste” concepts that all look alike in every country.” Other projects
Department store operators will not have to wait that long to test out the formulae. The canvas to test new concepts — or even updated variations of the old — are being created right now.
Dubai, Doha and key cities of Saudi Arabia have major mall developments going on or all set to be complete, such as the Doha Festival City from Al-Futtaim Group. The Deira Islands Mall — a massive enterprise — is getting into full-development mode, while the Nakheel Mall on Palm Jumeirah is another ticking off key project milestones. The Meydan One Mall just had its groundbreaking and details of another mega-attraction — the retail cluster at Dubai Creek Harbour — are awaited.
“Dubai will remain a key retail destination on the global map, [though] already having the second highest mall density in the world,” said Godchaux. “However, with most major international brands already having a presence — many having multiple stores across super-regional malls — room for potential demand may start to contract as market penetration reaches its peak.”
