Why Africans Don’t Spend at Malls: Three Reasons

Posted by Patrick Gaincko | August 24, 2017
african consumer mall patrick gaincko

Kenya will have 72 malls and Morocco about 40 in just a few years! If there are just a handful of places on earth, where malls are set for growth, then Africa is among them.

In what many observers call the “mall craze”, almost every capital city has or will have numerous of mega-malls and secondary cities are now planning to host malls.

The African consumer story is too big to miss: galvanized by Africa’s macro-economics, brands, retailers and developers favour a build-first-ask-questions-later approach.

There is just one problem: where are the shoppers?

A finding of my field-research in South Africa, Morocco, Kenya, and DR Congo, is that there are at least three reasons why Africans don’t fall in love with huge shiny malls at every corner.

Read my new piece ‘3 Reasons Why Africans Don’t Spend at Malls: a Lesson for Winning Consumers’ here.

ACROSS AFRICA, RETAIL, THE RISE OF THE AFRICAN MALL

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What’s Happening at Malls in Nairobi Kenya

Posted by Patrick Gaincko | August 21, 2017
shopping mall kenya patrick gaincko

shopping mall kenya patrick gaincko

KENYA, RETAIL, THE RISE OF THE AFRICAN MALL

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What’s Happening at the Morocco Mall, Casablanca

Posted by Patrick Gaincko | June 29, 2017
Morocco Mall Patrick Gaincko
MOROCCO, RETAIL, THE RISE OF THE AFRICAN MALL

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What’s Family Shopping in Casablanca Morocco

Posted by Patrick Gaincko | January 11, 2017
family shopping morocco mall

family shopping casablanca moroccofamily shopping casablanca moroccofamily shopping morocco

MOROCCO, RETAIL, THE RISE OF THE AFRICAN MALL

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What’s Luxury Shopping in Nairobi Kenya

Posted by Patrick Gaincko | November 4, 2016
african consumer luxury fashion kenya

african consumer luxury fashion kenya

FASHION, KENYA, THE RISE OF THE AFRICAN MALL

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Galeries Lafayette Left Africa: What’s In It For Consumers

Posted by Patrick Gaincko | October 16, 2016
african galeries lafayette

In my ongoing European conference tour, lots of good questions come up when I speak about the rise of the African mall, such as the sudden departure of the world-renowned, high-end department store Galeries Lafayette from the Morocco Mall, North Africa’s #1 shopping centre. What does this mean in the current context of a shopping mall proliferation all across the Continent?

As I am writing this, the website of Galeries Lafayette, a Paris France headquartered retail giant, still mentions “2011: Opening of a Galeries Lafayette store in Casablanca” and omits its March 2016 Moroccan exit. Understand: it was not a pretty affair.

The Casablanca store was their first-ever and sole presence in Africa and only their fourth overseas launch. It had around 320 brands, including ready-to-wear, cosmetics and accessories. Sitting on 10,000 sqm, the three-storey store was not only the mall’s largest anchor tenant, it was also its centrepiece, designed as a ‘building within a building’ with its own recognizable façade.

The departure of an anchor tenant is an extraordinary situation for a mall, let alone after only four years of operation like in the Galeries Lafayette case. In general, it is the direct consequence of huge financial losses. It has led to the agony, and ultimately the closing of numerous malls across the world. So Aksal, the company owning Morocco Mall, has speedily announced that Galeries Lafayette will be replaced by “a famous international brand, known for its low prices with its fashion, decoration, house and garden sections”.

What’s in it for consumers?

Two Galeries Lafayette staff. Among the 320 brands that the department store offered were Burberry, Michael Kors, Giorgio Armani, Calvin Klein, Dolce & Gabbana.
Two Galeries Lafayette staff. Among the 320 brands that the department store offered were Burberry, Michael Kors, Giorgio Armani, Calvin Klein, Dolce & Gabbana.

As part of my research in Casablanca last year, I interviewed a sizeable panel of affluent consumers about their shopping habits. They all reached a clear consensus: they had long divorced mass shopping. For various reasons, they look at a variety of alternatives – among which shopping tourism – to fulfil their great thirst for luxury and elitism. As a result, this consumer group may be looking at the Galeries Lafayette story with a mix of indifference and curiosity.

On the other end of the spectrum, middle class consumers, who form the vast majority of the mall’s clientele, are craving for cheap, low range, yet modern and foreign, brands. This is precisely the category to which around 70 percent of the Morocco Mall offering already belong to, notably in food, clothing and accessories.

During my several mall visits, I had noticed that the luxury stores including Galeries Lafayette, Dior, Louis Vuitton, Gucci and Prada (who exited the mall in 2015) were almost desert, whereas low-end ready-to-wear stores such as Orchestra, Okaidi and Next were relatively busy. It was also evident that, while average Moroccans were visiting the mall in massive numbers, particularly on weekends, they were relatively frugal in spending (the Morocco Mall does not provide information on its sales performances), preferring to splurge on fast- and casual food and children’s entertainment. Therefore, they will read the arrival of a mega clothing- and homeware discounter as an incentive to visit and spend more.

What’s next for Morocco Mall is an open question: with both a new positioning as a low budget mall and a greater embrace by the middle-class, will it make sense for the handful of remaining luxury stores to continue their presence?

In the broader context of the accelerated development of modern retail across Africa – in 2016 DR Congo and Côte d’Ivoire have seen the opening of their first malls, in 2017-18 Kenya, Angola and Mozambique will see the opening of their largest malls ever – the Galeries Lafayette case will likely be seen as an isolated episode by a number of African retail industry insiders. For one, Morocco is very different from Eastern and Southern Africa, particularly in terms of shopping culture. Rich Moroccans find it natural to catch a two-three-hour flight for shopping sprees in Barcelona or Paris. Affluent Eastern Africans do not have that habit and therefore will have different expectations vis-à-vis local retailers.

However, one of the most important factors for success in the mall industry, regardless of markets and cultures, is the tenant mix. The tenant mix must meet the customer demand which is driven by demographics, trade area, shopping behaviours and cultural influences. It is therefore expected that some of the future malls will focus on thoroughly understanding consumers as to perfectly align themselves with the needs and expectations of a specific consumer segment. If there were one lesson to be learned from the Galeries Lafayette debacle, is that trying to cater simultaneously to multiple consumer groups is a recipe for failure in today’s Africa. The successful malls will be those who will have clearly defined targets and uncompromising positioning.

MOROCCO, THE RISE OF THE AFRICAN MALL, WHAT'S IN IT FOR CONSUMERS

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What’s a Coffee Break in Johannesburg South Africa

Posted by Patrick Gaincko | October 3, 2016
consumer south africa

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FOOD & DRINKS, SOUTH AFRICA, THE RISE OF THE AFRICAN MALL

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