That's entertainment

Store managers must gain shoppers’ interest to maximise sales, according to a recent study.

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By  Roger Field Published  July 3, 2006

|~||~||~|With the rapid development of shopping malls across the Middle East, it is perhaps not surprising that a recent study has revealed that the majority of UAE consumers enjoy visiting retail outlets. But while most retailers are already aware that people visit malls for entertainment as well to shop, a recent report from ACNielsen, a research and marketing information company, reveals some interesting links between gaining shoppers’ attention and influencing their spending habits. More than two thirds of UAE consumers enjoy shopping, and ‘shoppertainment’ – or the ability to maintain shoppers’ interest – has emerged as one of the key factors driving the modern retail trade, according to a recent study conducted by ACNielsen. The study, called ‘ShopperTrends’ analyses the shopping and retail habits of shoppers in the UAE and KSA. The study indicates that with modern supermarkets, hypermarkets and malls accounting for an increasing proportion of consumer spending, retailers must do more to engage the shopper. Indeed, supermarkets and hypermarkets contribute to 45% of FMCG sales across the GCC countries. The UAE’s supermarket contribution is recorded at an all-time high of 53% towards FMCG sales. KSA supermarkets, meanwhile, account for 33% of FMCG sales, due to widely spread population. This is expected to pick up by more than 50% by 2010. “With the continuing trend towards retail concentration and the emergence of the marketing savvy consumer, there has never been so much competition for the retail dollar, said Piyush Mathur, managing director, ACNielsen, MENAP region. “This, in turn, has generated significant change and development in the field of grocery retailing,” he said. “The growth can be attributed to factors such as additional floor space, right location, greater variety and more consumers visiting these outlets,” he added. Furthermore, with almost six months of summer in the UAE encouraging people to stay indoors, people tend to seek activities in a mall or hypermarket once in every four days, caused by a desire for entertainment and shopping, which explains the phrase ‘shoppertainment’, Mathur said. Although frequency of visits is high, UAE shoppers have a repertoire of three to four stores that they visit every month. Their KSA counterparts frequent their favourite two stores, but spend 20% more money than UAE shoppers in supermarkets or hypermarkets, with groceries and personal care items usually taking top position. “Manufacturers need to have a better understanding of who they should be targeting in store and the decision making dynamics therein,” Mathur said. “Whilst females are the main shoppers in the UAE, their role in KSA is more of an influencer. In today’s busy lifestyle, shoppers tend to be on auto-pilot, essentially working on the sub-conscious rules they have formed both when it comes to selection of the retail outlet as well as deciding on brand purchase.” Hubert Lobo, retailer services manager, ACNielsen, MENAP region, said these trends mean that retailers will have to become more competitive in fighting for consumers’ money. “As the retail environment becomes more competitive, retailers will have to contend for their share of the wallet of the increasingly fickle shopper in this region. “To win the battle for loyal shoppers, retailers must market their banners and brands in addition to efficiently managing their processes. Turning a store into a respected and trusted brand with attractive and established values is vital to stay ahead of the competition,” he said. In the UAE, store equity in the retail market is driven by two broad factors – familiarity with the stores, and functional aspects such as accessibility and assortment. Another key finding is that while promotions are important, shoppers tend to seek them in their regular store rather than across stores. Ashok Nair, research manager at ACNielsen, added that the high frequency of customer visits to supermarkets should remind retailers that they need to offer consumers something beyond the average shopping experience. “Four visits a week cannot just be for purchasing things, so it has some kind of relaxation value to it. That’s what ‘shoppertainment’ is,” he said. “What consumers want is a choice, variety and a place where they can browse around, because they are not just going there to purchase things. It would have an impact on sales because of the contribution of supermarkets to the total FMCG sales has been going up so that in itself indicates that close to 90% of the people spend most of their money in supermarkets and hypermarkets.” Despite this, Nair thinks many retail managers are missing a trick. “Retailers right now are not doing too many things right, but by better layout, bigger spaces, and encouraging people to spend more time at the shelves by making the products more visible, they can improve,” he said. A further challenge for retailers is a lack of differentiation between stores, according to Nair. “There is not any real strong differentiation between outlets which means that going forward, the shop that creates more differentiation may perhaps lead,” he said. Retailers should consider creating special areas, such as promotional spaces, to gain consumers’ interest, Nair suggests. “They can create things like promotion areas, where people can browse through a number of products. They might consider creating areas within the retail outlet for people to spend more time,” he said. He added that services such as children’s play areas could add real value to a supermarket’s offering. “One difficulty for people is carrying their baby in a shopping mall or in the supermarket. They want to browse and see things but if the baby is a bit cranky, it is difficult. If there is a play-pen, it is a win-win for the child and the parents. “There could be a gaming section, or something like that, ways for involving people beyond just shopping within the outlet. From the retailer’s perspective, that could lead the consumer to purchase more."||**||

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