THAT CONCEPT STORE PICTURES

Printable version here

The IADS recently had the opportunity to visit THAT Concept store, located in the Mall of the Emirates, which represents a new breed of retail in a region dominated by malls and department stores.

THAT Concept store, taking on many of the concept-store codes known elsewhere in the world, includes many of the recent innovations spotted here and there across the planet, often made by department store companies looking to reinvent themselves through smaller formats, acting as showrooms located closer to communities of customers. Interestingly enough, this concept store is owned and operated by the Majid-Al-Futtaim Group (MAF), which uses it both as a window of its retail savoir-faire and also as a testing ground for brands.

For all these reasons, we review our store visit below, in order to understand how a mall owner turned franchise operator is using a concept store to deepen its retail expertise in all formats and test brands for further expansion, and share learnings for department stores across the world, especially for the ones currently experimenting new formats.

Company history and background

The eponymous individual founded the Majid Al Futtaim group (MAF) in 1992. Majid Al Futtaim (1934 – 2021) was the cousin of Abdulla Al Futtaim, head of the Al-Futtaim group, founded in 1930, an integrated commercial, industrial and services organization in the UAE, Qatar, Egypt, HK and Macau, and specialized in automotive, consumer electronic retail, and franchised retail (Robinsons, IKEA, Toys’R’Us and Marks & Spencer). Both cousins split in 1992 with Majid willing to focus on retail real estate.

MAF is now divided into 4 divisions:

-    Properties, including ownership and operations of 29 malls (including the Mall of the Emirates in Dubai, the Mall of Egypt in Cairo, the Mall of Oman, the Mall of Saudi, City Centre Bahrain, Mirdif City Centre, City Centre Muscat and City Centre Suhar commercial centres) for a total of 1.8m square meters, and 13 hotels and communities,

-    Retail, including 450 Carrefour franchised hypermarkets and supermarkets,

-    Entertainment, including 580 cinemas and 4 brands such as Ski Dubai,

-    Lifestyle, including a selection of brands ranging from Lego to Lululemon, to All Saints, Hollister, Abercrombie & Fitch, and THAT Concept store.

MAF reported in 2022 a revenue of AED 36.3bn (€9,96bn, +12% vs 2021) and a net profit of AED 2.4 bn (€0.6 bn, -2% vs 21), of which the lifestyle division, to which THAT Concept store belongs, represented a revenue of AED 801m (€199m, +38% vs ’21) and an EBITDA of AED 25m (€6.24m, +317%).

The Mall of Emirates was opened in 2005 and boasts 245,000 sqm of retail spaces, with an occupancy rate of 98%. It includes 630 retail outlets, 80 luxury stores, 250 flagship stores and more than 100 restaurants, as well as Ski Dubai, a 500-seat capacity Community Theatre and Arts Centre, as well as Magic Planet, an indoor family entertainment centre.

THAT Concept store initial promises

THAT concept store was opened in January 2021 on 4,500 sqm and two floors, in an area of the Mall of the Emirates (Via Rodeo) which was previously dedicated to luxury mono-brand stores, now relocated either on the ground floor or in a new luxury section.

The promise of this opening was to bring a new perspective in terms of the shopping experience, in a market where immersive retail is omnipresent. Just like a true concept store, it is all about bringing a very special experience, combining fashion, beauty, art, and lifestyle products under one roof, completed by a full set of services, in order to cater for the needs of a demanding clientele. For those reasons, THAT Concept store is built on the following 6 key pillars:

1. An innovative shopping experience: the goal is to provide a fresh and immersive shopping experience by showcasing a wide range of handpicked products from both international and regional brands, usually (but not systematically) not available elsewhere in the UAE.
2. A curated selection: the store features a carefully curated selection of fashion, beauty, home, and lifestyle items, with the ambition to cater to a diverse clientele.
3. A platform for local talent: local and regional designers are able to showcase their work and connect with shoppers.
4. An art and culture scene: Art exhibitions, cultural events, and other interactive experiences are hosted, fostering creativity and promoting a sense of community.
5. Personalization and customer services, such as styling consultations and beauty treatments, are here to enhance the overall shopping experience and cater to individual needs.
6. Design and ambience: The store boasts a visually appealing interior design, with contemporary aesthetics that encourages exploration and discovery.

In addition to that, according to the store CEO, MAF also uses this store as a lab to test brands candidates for further expansion in case of success. Potential successful brands are assessed by gathering data in terms of try-ons, selection and purchases so that the group can engage in conversations with such brands in terms of distribution enlargement (MAF has the possibility to engage in franchised development in the region).

Visiting the store: how to bring something new on an oversaturated market?

First of all, one can say that the location of the store is not exactly the easiest, even though MAF (which owns the whole commercial centre) has implemented clear signage across The Mall of The Emirates in order to guide customers: THAT Concept store is located at the end of Rodeo Drive, in a space which used to host luxury boutiques flagships.

In that area, one can find a mix of luxury and fashion brands, such as Isabel Marant, Roger Vivier, Etoile, as well as gourmet food such as Ladurée, so the issue is not so much the immediate adjacencies, which all make sense. What is more problematic is on the one hand the series of hoardings still installed (Thom Browne, Bvlgari or even generic hoardings) which suggests that the revamping of the area is not yet finished and on another hand the proximity of Harvey Nichols (which has a clear high-end positioning) and Bloomingdale’s (more mass), which makes it difficult for something intermediate to position itself and capture market shares. In other words, it is difficult to get there, and there are many distractions on the way including competing value propositions.

However, once customers are in the store, the look and feel is radically different from anything available in the mall and probably in the whole of Dubai, with a profusion of innovative and edgy brands (more than 150 fashion brands such as JW Anderson, Simone Rocha, Paco Rabane or Vetements) all displayed in a holistic, proper and specific concept that reminds a bit of what Galeries Lafayette did in their Champs Elysées location.

The store concept is all about contemporary décor, making nods to the Arabic culture in a giant suspended display designed by local artists. It can be a little disconcerting as it is thought to be a space for exploration, so many retail codes have been reshuffled. The goal is to display a great edit in a uniquely designed space, thought to be versatile and adaptable to different situations (brands, popups, new spaces, etc..).

The store, which opened on January 21, was initially designed to be fully genderless and tried unprecedented ways of displaying products (e.g. shop by colours), however, this proved tricky for the region, which is why this approach was dropped during the summer of 22 when a new management team took over. The new GM, who boasts an extensive experience at Al Tayer Group and Emaar, worked closely with the Creative and Visual Director at MAF (also an Al Tayer alumni), and reviewed the zoning, with areas divided into categories and brands sometimes mixing gender (a nod to the initial intention).

The first floor directly leads to the jewellery area (the second best performing area after fashion, which represents 70% of the business) where brands are presented with THAT-specific signage (a common trait across the store which again reminds of the Galeries Lafayette Champs Elysées location). The product category is coupled with the very large and extensive sunglasses area, both presented on generic wall units and coloured carts, which really encourage customers to touch and try the products. A sushi restaurant completes the space, which will be replaced by a tea room with sweets in order to encourage all-day long lounging.

On the other side of the floor (as the very large Atrium divides the space and provides a great visual perspective on both the upper floor and the ground floor giving access to the carpark, even though it also complexifies the in-store journey), women’s fashion, shoes and accessories are presented in clearly divided spaces, with a special mention to the shoe space, which encourages try-ons and product exploration.

Private shoppers and salons are also available in this space and can be booked for now on the premises. An app allowing customers to book such services and also to connect THAT Concept Store to the MAF group loyalty program is on its way.

A very surprising element on this floor is the access to the elevator: to enter it, customers have to go across the recreation of a local supermarket (a ‘baqala’) selling only very typical brands resonating with every Middle East young customer (Oreo cookies, Lay’s and Pringles snacks, etc…). As a consequence, it really is a visually enticing magnet, and a smart way to upgrade this otherwise dead space. For now, the monetization of the whole installation is still to be fine-tuned, and ideas to connect this space to MAF-operated Carrefour hypermarkets were discussed during the visit.

The second floor is dedicated to unisex and male fashion, including streetwear and sneakers, beauty & cosmetics, as well as the home and design category (the third-best performing category). Again, special care has been brought to the overall experience and feeling, with strong visual designs and attention to detail (such as decorations integrated into the concrete flooring). The home and décor area, in particular, is extremely appealing and presents a selection of products and brands which is unmatched in the country.

On that floor, customers can also find an on-site hair salon, a barber, a nail and brow bar, as well as a yoga and fitness studio, with classes starting as early as 6:30 am in order to cater for working customers. When it comes to services, THAT proposes a very wide palette of options, from the tailoring service to the possibility to drop off laundry or ask for dry cleaning.

Finally, tech is all across the place, with smart mirrors in fitting rooms (allowing shoppers to ask for other colour or sizing options from the cabin), and interactive pop-ups for shoppers to try new tech. The idea is to further invest in tech in order to gather more data about brand successes and be able to leverage that data to consider further investing in brands (for instance, Santa Maria Novella is being tested that way).

Like it or not, one must say that the value proposition of the store is very different from what can be found elsewhere in the market, and would not even be out of place in any European capital (a feature that could raise the question of knowing if such a proposition is not too edgy, or perhaps early, for Dubai).

Are all promises fulfilled?

There are some elements in the concept that might be questionable, such as the location of the store as already mentioned, but potentially also the name itself, which might prove difficult to market on a larger scale (and which made writing this article difficult).

But the special sauce at THAT concept store is that it is run as a department store (in terms of back-of-store operations or brand purchases, all merchandise being own bought) but creatively managed like a concept store. This, completed by the size of the space (4,500 sqm), puts THAT Concept store in a category of stores which include department store companies-backed concept stores, such as Galeries Lafayette Champs Elysées as already mentioned, but also SKP-S, Coin Excelsior in Italy, U-Plex in Seoul, WOW in Madrid, Showfields in NY or, to some extent, the concept-store part at la Samaritaine in Paris or Bloomie’s in the US. THAT Concept store captures this current trend within department stores of having smaller formats, thought to be fully immersive and experiential, with a special display that takes distance from the traditional approach.

Having said that, the store promise is yet to be completed, as the perspective of being a lab to test brands is great but not yet fully operational, and probably very expensive to run if the purpose is only to test them. This is why it will be interesting to follow the evolution of the space in terms of tech equipment and additional experiential spaces, such as F&B offers, to assess to what extent MAF is ready to innovate in a market which is not particularly in demand of such innovations.

THAT Concept store is not a department store and does not claim to be. However, its approach in terms of the customer journey (especially by proposing a lifestyle approach rather than a category one) and store feeling is resonating with department stores’ efforts to reinvent the way they curate and present their offer, as well as their efforts to create a concept store feeling in order to assess their fashion credibility. It is a great inspiration for companies looking for ways to revamp their multi-brand areas with a specific brand identity and a compelling customer journey and visit.

For that reason, the store is an interesting visit, even though a bit frustrating when it comes to its present capability to gather data and truly act as a lab for brands, which is now the main focus of the managing team. However, it already managed to propose a radically different way to sell brands on the market, which has not gone unnoticed. While some are wondering if this is not too innovative for an otherwise conservative clientele, THAT Concept store provides a new option on the market and a refreshing take on how brands can enter Dubai and the GCC countries

Credits: IADS (Selvane Mohandas du Ménil)