Placing entertainment at the core of today’s retail
To pull in repeat visits and attract new ones, entertainment zones are the new pivot for malls
I vividly remember my childhood while we were growing up in Dubai and entertainment was not exactly playing Angry Birds or Temple Run. Exploring the outdoors and, yes, the occasional camel rides and other adrenaline pumping events like dune bashing and mountain climbing were firmly embedded within our youth.
There was no sign of malls for miles ... but fast forward to 2015 — you have mile-long malls. The closest thing to a mall was the good old grocery store, which today has transformed into multibillion dollar retail establishments.
In the 90s and even in early 2000s people visited malls for household items, clothes and electronics. Retail was always at the forefront and entertainment was not considered a necessary component. Some coin-operated musical toys were the only equipment you could see in some malls.
However, there has been a paradigm shift. The whole approach has evolved and entertainment zones have become as important as retail stores. It’s a convergence of entertainment and retail in its true sense.
And, without a doubt, malls in Dubai and across the region thrive on Family Entertainment Centres (FECs). The trend started a number of years ago but accelerated during the downturn as retailers and mall owners desperately wanted to devise new ways to rebuild and attract new consumers.
We have been in this industry for over two decades through our entertainment and leisure show — DEAL — and have seen the industry grow over the years. We are a few months away from summer, and I can confidently say that seven out of 10 people would prefer to go to malls than any other place.
Either it is for shopping or for entertainment or both. ‘Retailtainment’ has become the buzzword in the marketing mix to attract new customers and to retain the old.
Indoor FECs have proved successful in all type climates — from Canada’s chill to hot and rainy areas such as Central America, and the arid Middle East. This is one key component that will help indoor theme parks and FECs grow at a remarkable pace.
Indoor theme parks are here to stay as you are more likely to go to the mall every week than an outdoor park due to the region’s climatic conditions. Indoor FECs have a competitive advantage over outdoor parks since they are fully-equipped facilities with air-conditioning and heating. Customers can be entertained regardless of the weather.
Consumer preferences are moving towards adrenaline-pumping rides, interactive gaming zones, redemption games and high-tech video games among others. Leisure is an all-round term and an important facet of malls as it draws the families with kids together.
One of the key reasons for the optimism in this industry is its growth. Globally the amusement and leisure industry is set to touch close to $120 billion (Dh440.7 billion) in the next few years. There are several upcoming projects in the region that will trigger remarkable growth. The GCC’s retail sales are expected to grow at a healthy 7-8 per cent to reach $285 billion by 2018.
FECs are the main pillars that will be supporting retail operations and developments within the Middle East and they are pegged to grow at a fast pace. Malls with FECs have registered a considerable hike in earnings in the last few months — mainly due to the influx of tourists from other regions.
Malls are thus striving to bring in new leisure attractions each year to keep customers engaged. Retailers on the other hand are leaving no stones unturned in their quest to transform shopping into an entertainment experience.
FECs form the crux of the retail industry on a wider scale as without their fusion within malls, the whole sector would have been just another brick-and-mortar retail space. It is important to note that unlike tourist attractions or theme parks that draw customers on a regional basis, FECs are highly dependent on repeat business from residents.
The successful FEC formula is to offer an in-depth assortment of attractions, products, programmes and services tailored to all kinds of customers.
The writer is Chairman, International Expo Consults, the organiser of DEAL 2015.
