Dubai retail malls use tech and retailtainment as customers turn to online shopping

Shopping malls in Dubai and the UAE are under pressure as people increasingly turn to internet shopping, and as the retail market faces oversupply. As a solution, malls turn to technology and new experiences.

According to a JLL report on the UAE real estate market in Q2, major delays are expected in the retail sector, and some of the announced projects will never come to fruition.

In response to the challenges, shopping mall operators in the UAE are limiting expansion plans and closing branches. They are also employing new strategies to get people to visit and stay longer.

The report states the total mall-based retail supply was approximately 3.8 million square metres by the end of Q2.

Mall operators limit expansions and close shops

Another 1.6 million square metres of retail space is expected by the end of 2021. More than 600,000 square metres of it is set to complete by the end of 2020.

Major retail projects currently under construction include Meydan Mall, Dubai Hills Estate Mall and Nakheel Mall on Palm Jumeirah.

The report also says market rents in primary and secondary malls have declined by approximately 14% and 24% respectively, compared to the same period last year.

Market wide vacancies are estimated to have increased from 14% in Q2 2018 to 18% in Q2 2019, and average retail rents have declined by 5% year-on-year.

Digital mall to use AI, AR, VR and cryptocurrency

Retail malls, therefore, are investing in new technologies to increase retail sales and increase footfall. Dubai-based tech firm Mall.Global is planning a digital mall, set to launch in 2020.

The retail attraction will offer more than 2,500 brands and experiences featuring immersive technology and employing brand immersion, virtual reality (VR), augmented reality (AR), artificial intelligence (AI) and cryptocurrency.

Meanwhile, Dubai-based developer Majid Al Futtaim is spending $4 billion on shopping centres in Saudi Arabia. This follows news that the company will continue to expand in existing and new markets.

Elsewhere, Westfield has created an AI-driven pop-up shopping experience, The Trending Store, which features the latest retailtainment technology.