The Future Of Malls In Saudi Arabia Post-Pandemic: How Can Shopping Centers Can Encourage People To Return

Malls have always been sites of innovation and at the crossroads of cultures, particularly in the Middle East and North Africa. Stretching back to the original souks of Cairo and Marrakech to the prestigious shopping centres of Riyadh, visitors have travelled from around the world to experience their delights.

Indeed, the modern mall grew out of curated sites of entertainment such as the Crystal Palace. Even the word ‘mall’ comes from a street in London called ‘Pall Mall’ which contains a leisurely selection of restaurants and social clubs. In turn, the London street got its name from an Italian form of alley croquet called?‘pallamaglio.’ ?So we can see that at the heart of the meaning of the mall industry is a commitment to community and entertainment.?

But the rise of e-commerce and the social restrictions that came with Covid-19 has prompted the retail property market to rethink the modern mall. By looking to the past, we can take inspiration from commercially successful historical examples while also keeping an eye on future technological changes. It will be vital, over the short to medium term, for both retailers and mall landlords to create environments that will prompt a return of footfall and customer dwell time.?

Luckily, Saudi Arabia, along with the wider GCC, already has a strong mall culture that our sector can utilize for growth. Much like in Victorian London, Saudi Arabia’s malls are more than just shopping centers: they are hubs of entertainment, culture, culinary exploration, and lifestyle choices. There are over 150 shopping centers in the capital Riyadh, a city defined by its large number of young people (50% under 30) and high levels of discretionary income. This has been recognized by the Saudi government with strong commitments being outlined for retail sector growth as a percentage of GDP in the?National Transformation Programme 2021-2025? ?and as part of Vision 2030. The GCC is already a world leader in developing cutting-edge malls that are world-beating in terms of scale. On a national level, Saudi Arabia is pursuing its?Giga Projects : several large-scale developments intended to diversify the economy and build the kingdom’s retail, hospitality and tourism sectors.?

However, there are still several vital steps that can be taken to vastly improve customer experience by those operating in the private sector. From enabling widespread use of order-online and curbside pick up, small, efficient, and nimble omnichannel retail exhibition spaces, automated stores linked to customers’ phones. As the Group CEO of Abdullah Al Othaim Investment Co., we are committed to creating mix-used retail spaces that incorporates restaurants, tourist attraction sites and entertainment centres. This will contribute to improving local peoples’ quality of life – a key pillar of Vision 2030.

2022 will be a turning point for Saudi Arabia’s malls. As?Euromonitor ?has reported, Saudi Arabia’s retail market is expected to grow by about 20% by the end of 2022 and Al Othaim is excited to be a part of this success. We recognise that the mall market needs to secure high levels of footfall from customers who have been living inside and shopping online during lockdown.?Marmore , a MENA intelligence firm, has suggested, that the GCC retail sector is poised for a ‘K-shaped’ recovery with the possibility of high and low growth curves hinging on the ability to innovate.????

The modern Saudi Arabian mall-goer expects a high level of safety and hygiene and will want to check out companies safeguarding operations. They will also need to be able to choose between quick ‘in-and-out’ trips using buy online-pickup-in-store (BOPIS) capabilities and centralized return areas and boutique personalized trips that combine tailoring through customer data, smart marketing, and highly trained sales associates.?

The largest innovation we can champion to ensure customers return to Saudi Arabia’s malls is the ‘omnichannel’ approach. The term ‘omnichannel’ describes businesses that seamlessly combine brick-and-mortar premises with strong e-commerce offerings. For instance, one should be able to browse at home, order items into shops to try on, explore out-of-stock collections through virtual and augmented reality, and receive personalized offerings in-store based on past online sales data.??

Returning customers will expect that services and technological innovation receive an equal emphasis to traditional goods. The growth of the??Internet of Things (IoT) ?suggests that in the future, Saudi Arabian customers, linked to the digital infrastructure of malls by their smartphones might not even need to physically purchase items while shopping, but instead will have bought goods registered and sent via express courier to their homes. With Saudi internet penetration standing at 95.7% in January 2021, according to??Datareportal ,?establishing widespread interactive data zones should be comparably easy. Consequently, the browsing experience alongside pop-up entertainments and green spaces will become vital pillars of the post-Covid mall experience. Indeed, the act of shopping and the act of buying might become very different things in the future.??

As we come out of the pandemic, with a highly vaccinated population, we must rethink the traditional mall. If customers are to return to physical sites we must offer innovative incentives that combine the best of technology, diversification of space, and entertainment offerings. Malls must?again??become community hubs that seek to improve the kingdom’s overall quality of life. The task is to recognize what Saudis collectively want from their retail spaces. When the community changes: successful malls change with them.?