An oversupply in the retail sector in Dubai has forced shopping malls to use technology to help sales.
The emirate is due to have another 600,000sq.m of retail by the end of this year bringing the total to 3.8 million sq.m with the arrival of the new Dragon Mall now being completed.
The main problem for the malls is going to be footfall with the over-supply and the growth in e-commerce, said the real estate company JLL.
A recent report by the company on the real estate sector in Q2 of this year, indicates that rents in primary malls have fallen by 14 per cent compared to 24 per cent for secondary malls. Availability of space has risen in the same period.
Additionally, another 1.6 million sq.m of retail will open by the end of 2021, a research associate from JLL MENA, Dana Salbak, told Arabian Business. Notable upcoming additions to Dubai’s retail scene will include Meydan Mall, Dubai Hills Estate Mall and Nakheel Mall on Palm Jumeirah.
“These are all super regional malls and there’s also the challenge of e-commerce,” Salbak added. “In terms of how expensive it’s become for shoppers and oversupply and choices, that’s always going to be a threat.”
Fresh strategies to overcome the problem are now being tried, to help increase dwell time, operating performance and tenant mix in face of the rise in online retail and a consumer shift away form luxury brands.
“A consequence of that has been that a lot of retailers have had to come up with innovative solutions and strategies,” she said. “MAF [Majid Al Futtaim] for example has partnered with Will.I.Am to introduce AI into Carrefour and cinemas, and you have a lot of random stores with robots. People are focusing on these kinds of elements to secure consumers and footfall into their stores."
In 2020, a Dubai-based tech firm known as Mall Global plans to launch a digital mall, which will provide over 2,500 brands and experiences that will combine immersive technologies and operational practices like brand immersion, virtual reality, on ground AR cues, micro influencer reviews and multi-cryptocurrency acceptance.
