Five Minutes With… Hugo Van Der Schaegh, Director, Retail Access ME

Retail in the UAE, particularly in Dubai, is booming. Do you expect to see this growth continuing?

The retail industry is one of the fastest growing sectors in the country with the contribution of 10 per cent to its GDP. Forecasts anticipate an additional one million residents in the Emirates within the next six years and add to that Dubai’s goal of attracting 20 million tourists by 2020. Retail demand, driven by these two major factors i.e. tourists and residents, will surely lead to more malls being built in the near future. With leading property developers like Dubai Holding, Meraas Holdings and Majid Al Futtaim Properties announcing ambitious retail plans, hosting the predicted traffic seems realistic. However, with a plethora of malls, each one will need to have a differentiated value proposition. And herein lies the challenge.

Do customers in the UAE tend to be loyal or do they switch brands easily?

If we compare the UAE with other mature markets such as USA or Europe, customers are less loyal. The biggest rational is that the country’s demographic is much younger and more willing to embrace new trends. Secondly, Dubai is the second busiest retail market (behind London) in terms of active brands, except retailers are side by side in closed locations – which creates a more competitive environment.

What is the role you play within the industry?

Retail Access offers four services – creation of commercial concepts, improvement of existing outlets, adaptation of international concepts to specific markets and category management projects.

In Dubai, we are exposed to a wide range of clients. We get approached either by individual investors who have identified an opportunity in the market and would like to launch a new commercial concept or global brands or retailers who need consultancy to maximise the performance of their category, shop or restaurant.

Are you planning on expanding operations?

We are already supported by a network that includes New York, Paris, Geneva, Singapore, Hong Kong and Shanghai. So having a global exposure is definitely a strong asset to support our clients in their international development and the group is always looking at potential expansions.

Which are the areas for growth over the next 12 months?

We currently have regular projects in UAE, Qatar, Saudi Arabia and Oman. Dubai is and will remain the most dynamic market for us but we see significant demand coming from KSA and Oman with quite a few malls currently under construction. In addition, we foresee a steep increase in community malls coming up next to the residential areas.

Besides, real-estate, hospitality is another sector that is booming. The rise of standalone restaurant concepts is pushing hoteliers to re-think about their F&B offers and hence they are looking for ways to maximise their (non-room) revenues. The market has also started seeing three or four star hotels opening up in the region. These hotels might attract guests with a lower room rates but they still need to create opportunities for cross selling, so souvenir shops, convenient stores and casual F&B outlets are just some of the concepts we develop with hoteliers.

What are the main challenges you face?

One of the main challenges we face in the region is underestimating the value of consultation before the project begins. Going straight into the planning or execution phase without going through an informed research or competitive analysis can cost very dearly to the clients in the long run.

Another common mistake when designing a store, is not to anticipate the promotional aspect. You end up opening a well-designed outlet without any ways to create activations, showcase new products or communicate during peak seasons / festivals. With Dubai being such a competitive market with only a few very loyal clients, retailers have to move away from the conventional ways of designing their stores to attract more footfalls and keep them engaged.

Are you looking at hiring more people?

We are close to signing a few very large projects in the region. We will certainly be looking to increase the strength of our studio to handle the regular projects as well as new ones.

What’s your leadership style?

In terms of management I’m lucky to have a very good team of professionals who are passionate about their job and do not hesitate to go the extra mile to satisfy our clients. My role is to make sure we have the right resources and the right tools in place in order to deliver the right quality at the time.

Define success in five words

Deserved, shared, long lasting and appreciated.