The small Emirate of Dubai on the Persian Gulf built its modern infrastructure on oil, but its government is aware of the need to build revenues from tourism to ensure continued growth.
Historically, Dubai was known as a nation of traders, with commodities such as pearls featuring heavily in its gross domestic product. Today, it is considered to be
the Middle East’s prime shopping location, helped by government-led initiatives. The city boasts the region’s premier shopping attractions and recently celebrated its annual shopping festival, an event that has drawn ever-larger crowds from around the globe since its launch in 1996.
The government’s relaxed attitude to tourists compared to its neighbours adds to its attraction
for both traders and buyers. Not surprisingly, the city has become a focus for point-of-purchase (PoP) innovations.
According to the Department of Trade & Industry, the United Arab Emirates (UAE), of which Dubai is one of the seven states, is the UK’s second-largest export market. UK-based company The Design Group has been active in the region for three years, working with an Arab partner (in common with most foreign businesses that want a presence there).
The Design Group commercial director Jerry Hall says Dubai really is the gateway to the Middle East: “It is an emerging market in that a lot of the traditional restrictions appear to have been removed or lessened. The oil is expected to run out in between eight and 20 years’ time, but the government has invested a considerable amount in Dubai’s infrastructure.
“They realised years ago that all they had was a large lump of sand floating on oil, and if they squandered the oil money, then all they would be left with was a large lump of sand. So they invested in the container port and established the large free-trade zone. They have also fostered tourism, particularly business tourism and the conference trade. Those factors have combined to make Dubai a good place to trade.”
Hall describes Dubai as “the Posh and Becks of the business world – it’s all new money, and the flashier and brassier the better. Signage and PoP tend to cross over to a greater extent in Dubai than they do in Europe, where stands tend to be permanent – and more expensive. It’s different in Dubai, where people are happy to spend money on impermanent stands. It is a very disposable society in many ways.”
The Design Group has developed a range of PoP materials that rely on electronics, called Lightstream. “It is too hot to go out during the day, so a lot of the shopping is done at night,” explains Hall. “Something that lights up will attract the eye, as well as being culturally acceptable to the people of the region. It is also viable in terms of the ambient light conditions.”
British-run supermarket chain Spinneys has witnessed the exponential growth of Dubai’s shopping sector since it opened there in 1961. According to general manager Richard Thorne, in recent years the chain has invested heavily in technology to gain an insight into what customers want and need.
“Spinneys has bought a 40 per cent share in the Air Miles customer loyalty scheme,” Thorne says, “which brings together key partners in the retail and tourism industry: a bank (HSBC), a supermarket (Spinneys), a travel agent (Thomas Cook Al Rostamani) and a jeweller (Damas).”
To complement this scheme, Thorne says Spinneys is installing sophisticated PoP technology in each of its seven stores. “The technology will enable Spinneys to develop an in-depth knowledge of the shopping habits of its client base.
“In conjunction with Air Miles, for example, we will be able to
identify families with babies and generate a pamphlet targeted at mothers with infants, or those who prefer ready-made meals. When a cashier swipes an Air Miles card, the customer’s details will appear on the screen, thus enabling the cashier to address the customer by name. The opportunities for direct marketing are obviously considerable.”
Credit on the increase
Visa International has significantly increased its investment in Dubai over the past five years and now sponsors the annual Shopping Festival. Visa country general manager for Dubai Peter Scriven says research by Middle East agency Merac on more than 2,000 retailers showed that credit and debit cards are increasing their hold on the region’s shops.
“The growth in shopping malls in the UAE over the five years we have been there has been phenomenal, from two or three main malls to 11,” says Scriven. Also, many of the small, family-run shops in the souks [Dubai’s traditional market areas] now take Visa. This is quite a transition from five years ago, when almost the entire retail sector would only accept cash.”
The highly competitive environment means card issuers have to offer enhanced loyalty programmes and attractive partnership deals. “We have partnerships covering about 20 merchant categories and offer special promotions and deals with hotels and car hire firms,” says Scriven.
“The more innovative banks have developed chip technology on their cards that can manage loyalty programmes. Emirates Bank launched a chip-based, multi-function card in the Middle East this year, which is linked to a points-based loyalty programme.
“This is setting the trend for the future, because with microchip technology on payment cards, there is a great opportunity for shops and banks to work more closely together. We are finding many new devices at point of sale such as chip readers, which are fulfiling some of those value-added propositions.”
To describe Dubai as a Mecca for shoppers may be geographically slightly off the mark, but it is certainly true in spirit. With its enormous growth potential – in terms of the number of shopping malls, the scale of the shopping
festival and other focal points for tourists – it should continue to attract interest from PoP practitioners on both the design and technological sides.