The Middle East is rapidly becoming a global retail destination with growing cities, such as Dubai, Riyadh, and Doha, fostering a unique ecosystem of innovation, luxury, and high-footfall commerce. Capitalizing on these unique opportunities requires more than resilient brand strength; it requires having a strategic site planning approach to retail.
No matter how high the footfall, determining the best retail site is much more than foot traffic; it involves being aware of cultural trends and lifestyle positioning, urban development shifts, clustering competitors, and long-term demographic shifts. Businesses entering the Middle East region must consider retail site planning to be a core building block of their strategy for entering the market, not something they will consider after market entry. Whether it is high-end fashion outlets or convenience stores, choosing the best retail site determines visibility, accessibility, and profitability.
In this article, we will explore why retail site planning is critical to building an effective roadmap for expansion in the case of the Middle East context – and how it fits into the overall retail growth strategy.
Why Retail Site Planning is Crucial for Success
Site planning in retail is instinctive for most; yet, it can be a gap between average sales and heavy loss. In the Middle East where malls dominate, and urban culture is a tactical exercise in careful planning, retail sites become complex and not just about costs and feasibility.
The retail site planning process is complicated by layers. Public transportation access, future neighbouring anchor stores and their retail draw; cultural context, zoning all certainly matter, however regional differences matter also, particularly in buying and for sales performance at the end of the day.
Climate even matters; in hotter regions such as Dubai, having flat access to a mall is either a benefit to locally anchored retailers, or just means you are totally street facing. Therefore, importantly all the above exchanges need to be considered to understand all the behaviours and customs surrounding retailing and integrate them into your plan, including the behaviour and expectations of the local people and cultures.
Retailers entering this market with no location strategy, are putting themselves at a higher risk of poor visibility and conversion, and problematic logistics. Therefore, planning the retail site becomes an important fundamental for operational and brand success in the region. Site planning in retail has an effective, healthy, positive impact on all aspects of your retail growth strategy.
Aligning Site Selection with Your Expansion Roadmap
An expansion roadmap is an important strategic plan for growing a retail business that must be underpinned with informed site selection. All while bearing in mind that in the Middle East, urban centres have particular nuances in consumer taste, infrastructure, and regulations.
A retailer expanding to Riyadh may implement a different location strategy than a retailer expanding to Doha or Manama. Retail site planning supports you in understanding how to choose locations that resonate with your brand identity and its intended target demographic, recognising the operational realities associated with supply chain nodes, warehouses, and the availability of people.
A mapped expansion roadmap using data-informed insights facilitates avoiding many rookie mistakes such as saturation sites, below-expectation performance during off-peak seasons, or misplaced clusters of proximity. Our advanced tools such as heat maps, drive-time analysis, and socio-economic profiling will support data-informed decisions.
Location planning also plays an important role in ensuring the sequence that your market expansion is aligned, e.g., whether Tier 1 cities receive priority over satellite towns. The right location strategy integrated within your mapped expansion roadmap will ensure that you will grow your retail network, and elevate your performance sustainably and profitably while keeping cadence with the market.
Crafting a Strong Retail Growth Strategy through Site Planning
Retail growth is not just a matter of having more stores. It’s about having the right stores in the right location. To build a successful retail growth strategy, you will want to leverage local data-driven site planning discoveries.
Middle Eastern markets offer considerable dense consumer mixes, where consumers are comfortable and invested in experiential shopping. Retail locational decisions should consider footfall patterns, proximity to entertainment, and preferred demographic catchment areas. Consideration of high growth location planning, such as mixed-used developments or transit-orientated development, provide retailers a chance to have one of the most visible locations in town while building unique shopper experiences.
Consumer behavior is also changing, and with it will require the retail site-planning to allow for the shifts in consumer behavior. For example, planned omnichannel shopping behavior may require the retail location to equalize the walk-in customer with e-commerce delivery operations. As well, the retail location may serve as a fulfillment center, and impact the location in non physical ways.
Mapping competitors is critical too. Where, or how far away, from singular brands matters to a retailer’s pricing power; it reflects the market transport mix and audits the retailer’s marketplace awareness.
Retail Site Planning as a Market Entry Strategy
Retail site planning should be treated as a vital element of your market entry strategy instead of a last step in execution. When entering Middle Eastern markets, you are not only bringing products, you will also encounter various socio-economic and cultural dynamics.
You will start with insight into gender-based footfall in Saudi Arabia, take advantage of tourism zones in Dubai, and have the opportunity for local control of exposure and access to your brand! Retail site planning can be your testing ground before you roll out the big lift, kiosks, pop-ups, or smaller formats than you would otherwise.
Additionally, municipalities and real estate developers in the Middle East are often incentivizing retailers to enter defined zones. A solid market entry strategy will take these considerations into account at the outset.
The best site will see facilitation of relationships that both combine exposure, logistical considerations, and customer experience. Regardless of entering the market with either a flagship store or pilot concept your physical space should seek to establish the market positioning your intent is to cultivate. In conclusion, retail site planning is whether you can control not just where you open, but how you will be able to open, and how fast you will be able to pivot.
Role of Retail Chain Expansion Consultants in Site Planning
Retailers often do not know how to fully comprehend the level of complexity related to the markets of the Middle East, which is where retail chain expansion consultants play a role to assist their clients.
The consultants provide local site planning expertise in areas of consumer behavior, legalities and negotiations. They include some of the associated implications of site decision making beyond theoretical assumptions and include consideration of future site decisions that may be speculative in nature. The consultants experience will cover feasibility plans and studies, market zoning studies, lease structuring, and connection into local jurisdictions.
Consultants support localized location intelligence tools and access to proprietary data sets to support near-term risk of bad site selections. Your expansion consultants role is to get your brand proposition more aligned with realistic fruitions off of practical site use, and maximizing your return based off of your new outlet commitments.
How Growth Advisory Services Enhance Retail Site Planning
Utilizing growth advisory firms is a revolutionary way to think about retail expansion, especially around the quality and efficiency of retail site planning. They provide a more comprehensive approach, combining market data, financial modeling and acquisition of buyer behavior, in order to drive into a better location.
For instance, in the Middle East, their growth advisors engaged partners in the market to better anchor their companies in macroeconomic developments, infrastructure shifts, urban policies and more, which can weigh heavily on site viability, and the more traditional competitive benchmarking to get to any location white space or assess which markets are potentially at saturation.
It is important to note, however, that growth advisors are not brokers like most commercial real estate agents, they are the polar converse. Growth advisors look past the market rental rate and observe more closely the performance of where a site will be – over the long-term, for example, traffic evolution, tourism inflows, or established clusters of economic activity that may have a benevolent public sector component.