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.
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?
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.
With the recent news that a mega shopping centre will be built in Rabat, it seems that the development of Morocco’s retail landscape shows no sign of slowdown. The future Mall of Rabat has been widely talked about as “Rabat’s Morocco Mall” because it has the same designer and owner – Aksal Group, a leading retailer in Morocco – as the Casablanca-based Morocco Mall, North Africa’s largest shopping centre.
But, as it turns four this month, how is Morocco Mall doing? What lessons can be learned from its fortunes and taken into account, not only for Rabat, but also for the just-opened or upcoming malls in Luanda, Accra, Cairo, Abidjan, etc.
When it celebrated the Morocco Mall’s first anniversary in December 2012, Aksal said that visitor traffic, totalling 16 million, had exceeded expectations (14 million/year). In 2014, 17 million people reportedly visited the Mall. Although very little information has been made available about the its actual performances, the Mall is generally credited to have tremendously contributed to turning Morocco into a first-class shopping destination.
The Mall Boom
Following the Mall’s launch, medium-sized and large scale shopping centres revived or opened at frenetic pace across the country. In fact the days ahead will see the mall boom further rolling out: 2015-16 sees the opening of Menara Mall in Marrakesh, Sacco Alto in Tangiers and Founty Mall in Agadir. By 2017-20, with at least ten shopping malls of 20K sqm and above on its soil, Morocco will have the highest density of malls in Africa.
Developers see no bounds to their ambitions, as they are backed by a combination of factors – the growth of middle-class consumers’ spending power, urbanisation, the consumption context shifting from informal to organised formats, a business-friendlier legal framework. But because 95% of mall tenants are franchises, it is perhaps their exponential development over the last ten years that really drives the mall proliferation. Growing at 17% per year, the franchising sector – totalling 650 networks and 4100 points of sale in 2013 – is continuously looking for new retail space.
The Mall of Rabat intends to house more than 200 retailers. With Gulf investors and global brands – from Spain, France, Italy, Turkey, USA – regarding Morocco as a retail Eldorado; with Aksal Group already owning a 20-plus brand portfolio, Rabat will undoubtedly achieve its goals.
But what experience can shoppers expect in Rabat? Will they have a replicated Morocco Mall? What is the customer experience at Morocco Mall to begin with?
To find out, I field-researched, spent time with and interviewed many shoppers, shop owners and staff members, inside the mall, in public transportation and elsewhere. This report focuses on the key factors that impact the consumer experience.
Located on the Casablanca Corniche, the Morocco Mall offers a commanding view of the Atlantic Ocean. The waterfront promenade, where restaurant terraces, luxuriant planting and manicured gardens create the sensation of both togetherness and intimacy, is very popular with families and young couples.
But for all the Mall’s natural assets, it is no easy task to reach. There is no door-to-door public transportation. You must rely on the semi-formal system of “petits taxis” whose fares, frequency and service vary significantly from one to the other. On a Tuesday afternoon, my taxi charged 1.5x the “regular” fare because “there is nobody at the Mall right now” he said. He explained that he had no choice but to make me pay for his return to Casablanca city centre.
The main access to the Mall is the 2×2 lane Boulevard de L’Ocean Atlantique which is notorious for being one of the city’s most hazardous places. The traffic either moves too fast at off-peak times or too slow at rush hours. On top of huge traffic jams and frequent car accidents, walking down the boulevard is a long, strenuous and unsafe affair: how seriously does the automobile-centric access to the Mall affect shoppers?
Equally important is the question of sustainability. On several fronts, from energy consumption to air pollution, the direct and indirect implications of the Mall’s activities deserve the highest attention.
Take a 10-20km radius: there is no doubt that the Mall would considerably benefit from improving its urban integration and structuring effect on the surrounding communities, the city and the region.
For instance, at the Casablanca tramway’s station Aïn Diab Plage, situated at a 10-minute drive to the Mall, one can see the greatly positive change that an extension of the tramway route or a shuttle bus service would bring. Taking the public directly to the Mall, these solutions would greatly benefit the families, the environment and the Mall (in such aspects as planning, crowd management, security, audience engagement).
Inside the Mall, the design and layout amazingly stand out. The designer Davide Padoa said: “At the inner core (…) is the Galeries Lafayette store (…) designed as a ‘building within a building’. The state of the art, back-illuminated façade is both an homage and 21st century reincarnation of the original store on Boulevard Haussmann in Paris. An intelligent lighting design graphically creates the shape of the Art Nouveau dome of the original store on the façade, which illuminates the surrounding mall area and creates a glamorous atmosphere”.
For visitors the multiple awards won by the Mall at various global retail and property industry events translate out in the form of a seamless circulation in wide and spacious walkways, the abundant interior lighting, the stunning view on the Main Court.
The Tenant Mix
From a consumer perspective, at the core of a mall visit is the need-and-want to find a large choice of products and services. The tenant mix is therefore crucial as it influences shoppers’ visit duration and spending.
Secondly at individual store level, for consumers to spend quality time (interactions, shopping), both the retail space and the size of the product offering are key factors.
Thirdly when rating their experience, shoppers consider whether the mall has the right tenant placement and strong anchor tenants.
But most importantly an ideal tenant mix must meet consumer demand (which is driven by demographics, trade catchment, shopping behaviour and cultural influences).
Ten years ago a study found that the Moroccan retail environment was dominated by prêt-à-porter, lingerie and food franchises. This reflected the rise of a mass consumer culture and the resulting insatiable demand for “Zara, Mango, Etam, la Senza, Okaïdi and others, [which are] international brands that form part of [consumers’] daily environment in large cities”.
Over the years, Casablanca’s middle class kept on growing on the back of strong socio-economic fundamentals and showed a great affinity and readiness to enjoy mass market products.
This is precisely what Morocco Mall sells.
Source: Patrick Gaincko, onsite, March+October 2015
Today, as the graph above shows, prêt-à-porter, lingerie and food dominate the retailer mix; when adding the shoes and accessories category, that’s more than 70 percent of the space.
Zara and other Inditex brands thrive, so does a legion of low-end and mid-range ready-to-wear clothing stores, from H&M, Jennyfer, Gap, Benetton to Banana Republic, Orchestra, Next.
I found that a majority of shoppers embrace three behaviours at the Mall.
They are ready-to-buy shoppers – those who have a sense of urgency and go with a precise idea of what they need; they also do impulse buying – they decide on a purchase based upon a satisfactory trial session at, say the cosmetics store MAC or a compelling sales pitch at the watch seller Chronos; and finally, they are discount shoppers. Forming the biggest visitor contingent, discount shoppers look for sales and best deals on specific items.
I meet with Rania and Sara, mothers of two and four respectively. They came together sans their families, so that they could make the most out of their trip, they say. They are doing extensive searches, stopping at each kidswear, accessories and womenswear store and meticulously going through the shelves. They shop either individually or together. They compare prices in real time on the phone, and when one finds great deals somewhere, the other joins.
Organised, price-sensitive, sociable, the two thirty-something-year-old shopping warriors – sporting blue jeans, t-shirts, minimal make-up – are already planning a new visit in the same month, “to have fun with the families and relatives” they say.
The second reason middle class Casaoui’s (inhabitants of Casablanca) flock to the Mall is that they find three things: convenience, affordability and choice at the Food Court.
This is perhaps Casablanca’s largest and most diverse gathering of fast- and casual food under one roof, including modern outlets such as the McDonald’s Moroccan Mall branch, value-for-money specialists and popular menu formats.
In fact the Food Court acts as an irresistible magnet to family groups as soon as they pass the main entrance. On weekends, it is sold-out from start to finish.
In addition to the Food Court (second floor), the back of the building also houses a supermarket (ground floor) and the very popular theme park Adventureland and adjacent stores selling mother-and-child clothing, kidswear, toys and candies (level one). As a result of this clustering of complementary tenants, the food & play area is the Mall’s busiest section as families enjoy multi-purpose shopping.
However, not everybody is happy with this.
Two small families enter the Mall, stop at the Reception Desk, ask where McDonald’s is and how long is the walk. Once they arrive, they spend a big chunk of hours in the Food Court, then they go one level down to Adventureland and spend the rest of the afternoon. This has been the cause of discontent to several tenants. They argue that the food-entertainment duet eats away much of the visitors’ spending dirhams.
What could entice families to not just go for eating, playing and hunting deals? What other types of shoppers the Mall could attract?
How to Recapture the Riches
On busy days (weekends, bank holidays), the luxury section is a hit. It turns into a hot spot for window-shoppers and wanderers who gaze the sleek exteriors and dazzling displays of the Dior, Louis Vuitton, Max Mara, Ralph Lauren and Gucci stores. They take souvenir photos in an upscale nightclub-styled, glitzy décor. A shop owner is unimpressed: “People take pictures, post them on facebook, pretend they are in France or Switzerland. The riches come only on Tuesday and Thursday mornings” she says.
When it opened, the Mall positioned itself as a leader for luxury fashion, competing with Middle Eastern malls, and even with European malls. “Contrary to Dubai Mall, whose opening had been twice postponed and ended up opening with 40% vacant lots, Morocco Mall opens on time and is 98% occupied” said Aksal Project Director to the French newspaper Les Echos in 2011. The Mall also ambitioned “to attract Africans who no longer have to leave the continent or fly to South Africa for shopping” according to the magazine Jeune Afrique Intelligent in 2012.
But several upper class Casaouis, also nicknamed “A-plus”, say that over the years they kept on travelling overseas for shopping sprees. They use the Mall for specific needs. They are either potential customers – those who enter a store with no hurry to make a purchase and simply gather product information; or they look for discounts.
At Dior, a young moneyed couple enters and requests to see a handbag. When the saleswoman returns from the stock with the item, the man enquires about the price and takes close-up photos with his cell. The couple leaves empty handed. This, according to the saleswoman, has become routine, adding “we have become more advisers, than sales”.
On a Thursday afternoon, a middle-aged woman enters nonchalantly the Prada store. She makes her way straight to the back room devoted to dresses and shoes. She tries various items, asks whether there are ongoing sales, photographs price tags, and leaves with no purchase.
What would it take for them to unlock their wallets, become ready-to-buy or loyal customers?
According to an authoritative study, affluent households represent 13% of Morocco’s population. When the economy grows, they are the biggest beneficiaries, the middle-class is increasingly less impacted. Those at the top allocate only 33.5% of their income to food and clothing and spend more than any other social class on transport, communication and discretionary products.
As a result, they feel that the Mall, whose 70% sell food and clothing, does not cater to their needs.
At the Maserati dealership on the Zerktouni Boulevard, Mr Abdellatif Lebbar, a Sales Adviser, says “good times come and go [in our business]. Like in everything pricy. But when a buyer comes in, he wants everything Maserati, not only the car”.
The riches are willing to spend hours at a mall if it means an immersion into their sophisticated world. They want a large array of premium products in beauty and personal care, sport and wellness, food and gastronomy, bakery and confectionary, gifts and fineware, technology and home entertainment, travel and leisure.
They also strongly desire personalised services such as dry cleaners and repairs, stylists, dieticians, interior designers, personal trainers, bespoke tailors, concierges and curators.
They seek a retail space that is aspirational and engaging, beyond being just transactional. For instance in recent years the Dubai Mall has hosted grand displays of a real Renault F1 and Rolls Royce’s latest editions. It also hosts an Emirates Airlines official store where visitors can experience an A380 flight simulator.
The Johannesburg-based mall Sandton City offers the Nelson Mandela Square which is an outdoor, Mediterranean-styled piazza housing a 2.5-ton bronzed Mandela statue, sidewalk cafés, fine restaurants and exclusive couture and designer labels. It’s a hit with tourists and shoppers on any weekday.
The Agent of Modernity
Well-connected, well informed, A-pluses have higher expectations than average Moroccans. While middle-class crowds expect to be informed and persuaded about modern products, the affluents expect the extra mile, the newest, the freshest, the latest.
Increasingly, they influence retailers’ approach. Meriem B.K., a piano teacher whose clientele includes some of the wealthiest Casaouis says “now the women who run luxury fashion boutiques downtown possess a better knowledge of elite buyers’ tastes. A-pluses therefore feel their needs are met either in the city and when they travel”.
Faced with an ever-growing pack of local competitors who are becoming smarter at servicing and cajoling A-pluses, sharper at designing and stocking their assortments, quicker at following trends, is it a worthwhile endeavour for the Mall to try to regain the riches?
After all the Mall is a monumental enterprise that enjoys extraordinary, undisputed success with almost 75% of Casablanca population. It can further capitalize on its positioning as the champion of the middle-class, as the premier home of masstige products (“prestige for the masses”), as the epitome of the modern lifestyle the vast majority of Moroccans aspire to.
As every year thousands of sub-Saharan Africans chose Morocco for higher education, quality healthcare and shopping (a trend poised for growth in the medium term as 2015 has seen an increase of the trade between Morocco and West- and Central Africa), the Mall could strengthen its profile as a landmark of Casablanca hospitality.
Finally it could invest in its urban integration and partner with the numerous projects aimed at turning the city into a continental financial powerhouse, such as Wessal Casablanca Port.
In 2004, in the wake of her first major breakthrough – the opening the third largest Zara store in the world – Aksal Group CEO, Ms Salwa Akhannouch said: “I invested in these projects because I wanted my country to also benefit from them. Establishing this type of brands, the care we put in this megastore, the financial investment are key elements for the country’s image, for contributing to its modernization”.
“Inside Morocco Mall, Casablanca: A Photo Report” coming on Dec 29 on gainxperience.com
Prices: most are beyond the reach of the Moroccan median income (5308 DH , $500 ). Middle class consumers therefore limit their mall visits during a single month, adopt price-sensitive and event-driven behaviours (discounts campaigns, “back to school” campaigns, etc.).
Amenities: seating area, mobile charging stations
Access: no door-to-door public transportation, no dedicated taxi stands
Information: no brochure (tenant list, map), no touch-screen directory onsite
Website: non responsive, outdated tenant list, no interactive tour
Design and layout: multiple property and retail industry awards, one Guinness World Record
Kids-friendly facilities (kiddy cabs, boys urinals)
Tenant mix: in tune with the growth of the middle class, the demand for mass market products, the aspiration for modernity, the expansion of the franchising sector and local entrepreneurship, the growth of Made in Morocco products/brands
Entertainment attractions: musical fountain, theme park, giant aquarium, IMAX cinema
Security: smart, not overzealous, they provide a sense of protection and comfort
Fast- and casual food offering: American, Belgian, Italian, Moroccan, Indian, Turkish, French, Chinese, Spanish, Mexican, Vietnamese, etc.
Year-long events program: product demonstrations, fashion shows, motor shows, concerts, etc.
Exclusive tenants (at city, national, continental levels) and strong anchor tenants: Galeries Lafayette, FNAC, Adventureland, Marjane, Aksal Group (20+ brands)
Positioning x pricing: there is no coordinated sales campaign set at fixed periods in the year. Sales are seemingly at the discretion at each individual store. Price cuts can be as large as 70% at any time, for almost any product category. Result: the annual visitor traffic is high as, in addition to other factors, the general perception is that there is always something going on at the Mall, always great deals to catch.
Unique value proposition:
Combining existing shopping centres and upcoming projects (Boulevard Ibn Tachefine, Californie, Marina, etc.), Casablanca is set to become a very competitive place for retailers.
The Mall can define a clearer value proposition, reintroduce itself as mini city centre of its own, activating its brand assets, capitalizing on what has made its leadership – a place for young couples, families and friends to spend quality time, a grand platform for extravagant happenings such as the World Guinness record-breaking Oreo tasting party.
The millions of consumers who visit the Mall every year represent a sea of opportunities, at the very least in terms of audience engagement pre-, during and post shopping on one hand, and designing and delivering an enhanced customer experience on the other hand. Leveraging technology also allows to do advanced marketing.
Inclusive tenant management:
Many retailers have expressed – some in the press – a keen interest in having their perspective and economics taken into account by the Mall management. As they have direct access to shopper purchase data and deep interactions and relationships with shoppers, the demand of those on the frontline for more inclusiveness is a solid opportunity. The Mall could create partnerships with retailers that would bring serious benefits in such areas as customer experience programs, customer loyalty programs, productivity improvement programs.
As you take the Boulevard de L’Océan Atlantique leading to the Morocco Mall, you see huge billboards advertising online retailers that offer discounts and comparisons all year long, promise fast delivery and 24/7 assistance. With internet penetration peaking in Morocco, online shopping is going from strength to strength with aggressive players and hungry new entrants, all set to capture a bigger share of middle class families and young shoppers.
Mixed used formats:
Right now, the Morocco Mall is primarily about shopping. You have to get into a car, drive to the Mall and be locked in for the entire day. But today’s ambitious and winning malls are shifting to mixed used formats that consumers find very attractive. Mixed-used formats allow consumers to enjoy a mix of living, working and shopping at the same place. This is actually already the proposition of several developers in Casablanca.
THE BIG PICTURE
Opening Date: December 2011
Retail space: 70,000 sqm
Total space: 10 ha
Cost: 200 mlln EUR
Number of shop units: 300-350
Number of brands: +/- 600 incl. 300 at department store Galeries Lafayette
Type of brands: 60% retail, 10% catering, 30% leisure
Immediate catchment area: 5 million (Greater Casablanca)
Secondary catchment area: 6.2 million
Number of visitors: 17 mlln in 2014 (press reports)
Vacancy rate: low
Total population: 33.008.150 (*)
GDP growth (2014, projection): 4.6% (**)
GDP per capita: $ 7606 (***)
Status in world income classification: Lower Middle Income (*)
Average monthly income: 5308 DH ($500)
Spending power growth/year: 2.3% (btw 1998-2006)
Wholesale and retail trade, hotels, restaurants/GDP: 12% (**)
Source: Moroccan High Commission for Planning (2009) except:
(*) World Bank (2015), (**) Morocco Outlook 2014, African Development Bank, (***) IMF (2014)
Size (% of total population): 53%
Monthly income in urban areas: 4402 DH ($400)
Primary expenses: housing, food and health (72.8%)
Primary location: Greater Casablanca (72.7%)
Evolution (when the national economy grows): stagnant/slightly growing
Source: Moroccan High Commission for Planning (2009)