In a session moderated by Abdellah Iftahy, Partner, McKinsey & Company, Alison Rehill-Erguven, CEO, Cenomi Centers and Guy Perry, President, DevCo Development Arm of Diriyah Company (DGCL) discussed how the malls are changing into lifestyle destinations for the people of Saudi.
The prevailing model of retail destinations, primarily as places to go to shop, has been upended by the emergence and growth of e-commerce. Developers today are placing a great deal more emphasis on how these destinations can attract traffic for reasons above and beyond the simple shopping experience, creating new opportunities for retailers and customers alike.
The momentum toward lifestyle experiences in Saudi Arabia is being driven by the combination of a young, well-travelled population, a shifting social environment, and near saturation of social media. Research shows that retail spend in the Kingdom will grow by more than 50% through 2030, with a focus on F&B, fashion, accessories and beauty, as well as lifestyle, home and electronics. This creates a lot of variety for retailers to choose from in their asset mix.
The opportunity for mall developers and lifestyle destinations is to create timeless destinations that can match the famous streets of London, Paris or New York. Advances in technology and sustainability allow developers to challenge the idea that the Middle Eastern retail experience is limited to air-conditioned indoor malls. There is a growing appetite among customers and retailers for culturally authentic open-air destinations that combine dining and retail outlets with social gathering places.
The emergence of these new spaces requires close engagement with retailers to develop and deliver the kinds of seamless, customized experiences that will complement the model. It also requires investment in technology, both to integrate digital channels into the overall customer experience and also to manage the infrastructure. Pedestrianized outdoor spaces need new approaches to parking, air conditioning, traffic management and air quality that must be delivered in a way that meets growing customer demand for sustainable practices.
The result is the creation of an entirely new model of social retail for the region: places that people will want to visit for the lifestyle and social amenities they offer but within which retailers can take advantage of the high footfall to create highly personalized retail experiences with asset mixed tailored to the needs of visitors.
As we build new assets, our future lifestyle destinations, as well as the big flagships that we’re very excited about, we’re making sure that we are evolving with the consumer because we need to stay relevant.
As we build new assets, our future lifestyle destinations, as well as the big flagships that we’re very excited about, we’re making sure that we are evolving with the consumer because we need to stay relevant.
