Outsourcing Gaining in Gulf Retail Structure

[box type=”shadow” ]Facilities management no doubt is being increasing opted for, but what is interesting is the fact that it is expanding into different sectors. One such sector that is fast gaining prominence is – Retail. This article gives a brief on Retail Facility Management (RFM) in the UAE.[/box]

RFM is a lucrative, niche industry within the much larger facilities maintenance industry. RFM differs from other segments of the industry because it focuses on maintaining and managing retail stores, distribution centres, outlets, lifestyle centres, malls and standalone stores. RFM covers a wide range of functions from general maintenance/repair to disaster preparedness, preventive maintenance as well as ensuring the smooth functioning of the retail space.

[box type=”shadow” ]“Each stakeholder has their own requirements and needs, and everyone always thinks that their issues are the most pressing!”

– Youssef Abillama

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Overview

Within the retail sector, a ‘one size fits all’ approach to FM is impossible, as every retailer has a unique set of assets and the FM solution must reflect that, particularly in the UAE where many developers construct residences, hotels and other entertainment outlets alongside their major retail outlets. Compared to other facilities, providing FM in a retail centre is literally a 24/7 job, notes Youssef Abillama, Co-founder and CEO of MMG Overseas Ltd, a regional facility management group present since 1999 in the Middle East, Lebanon, Qatar and Syria with more than 700 technical and administrative staff. He says that in a retail sector, the FM provider has to ensure that, for example, the outlet is clean, the AC is working and the POS is working, during opening hours, but also has to carry out other works after closing which cannot be done when there are customers there. Attention to detail and rapid response to any issues is also critical.

[box type=”shadow” ]“He increased use of social media to air complaints, potentially damaging a supplier’s reputation, is a concern.”

– Steve Beesley

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One of the companies that provide integrated facilities management to retail spaces is Transguard. While they specialise in the delivery of FM and Security services into retail and leisure space, they are also responsible for delivering services into some of the most iconic malls and theme parks across the UAE as well. Besides providing the required technical training,whether in maintenance, cleaning or security, they deliver customer service training for their retail contracts through the dedicated Transguard Centre of Excellence. According to Steve Beesley, Transguard Chief Operating Officer – Managed Services, at an operational level, services such as cleaning and security take on a much wider remit with a significant focus on customer service. “More often than not, the cleaner or security guard is the first point of contact for retail customers and it is, therefore, important that staff at this level have excellent customer service and language skills,” notes Beesley.

[box type=”shadow” ]“In retail today, the easy days of retail are fading. Sales growth rates are slower and competition is for the consumers and tenants are intense,”

– Colin Dowall

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JLL’s Property and Asset Management Services team in the Middle East provides consultancy services to shopping mall owners. The purpose of this work is to promote and educate on the best practices of retail management to future proof the assets against the changing retail environment, trends, and competition. Colin Dowall, Head of Property and Asset Management Services, MENA – JLL, states that it’s key to note that the mall is not just competing with other malls but also with the four O’s of shopping – Online shopping, Overseas shopping, Outlet shopping, and consumer’s Opinion. “You are competing with e-commerce, trends, and malls further afield where services and comforts are better provided. In retail today, the easy days of retail are fading. Sales growth rates are slower and competition is for the consumers and tenants are intense,” he adds.

Challenges

FM companies face a multitude of challenges while dealing with the retail sector. Be it frequent cleaning of high traffic areas, scheduled maintenance during holidays and weekends, AC maintenance, and glass/facade cleaning are just some of the challenges FM companies face on the job. Having handled the demands and providing FM services for the retail sector both in UAE and Oman, Ali R. Deryan, General Manager, Tanzifco Emirates / CFM Facilities Management Services L.L.C, says that the design element of these structures are the first challenge to reckon with in terms of the maintenance work to be carried out without disrupting the look and feel of the place. Further, most retail operators have several outlets spread regionally and individual outlets cannot afford the cost of permanent technicians and cleaners. “Therefore, mobile FM workforce solutions are the most practical and cost effective answer. Additionally, most malls will only allow repairs and cleaning outside opening hours which compel retail operators to rely on a service provider to be able to meet these demands,” Deryan.

[box type=”shadow” ]“Most malls will only allow repairs and cleaning outside opening hours which compel retail operators to rely on a service provider to be able to meet these demands.”

– Ali R. Deryan

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Thanks to rising overseas experience and globalization of retail brands, the consumer is increasingly discerning and less tolerant of an unpleasant shopping environment. Dowell says that for shopping centres, the failure to provide proper wayfinding, a pleasant environment, and clean facilities results in shorter visits as customers leave hours earlier than they might otherwise, especially if they have young children. Less time at the mall means less time for impulse purchases and spending on food and entertainment.

“We hear a lot about innovation in the form of virtual reality fitting rooms, smart apps that track you as you walk around the mall, and other high-tech solutions to help boost sales at traditional shopping malls. But what about getting the basics right?” asks Dowell, who adds that failure to get the basics right contribute to lost sales in shopping centres and performance that are underwhelming.Within the retail environment, there are a number of customers to satisfy the ‘client’ through to the retail customers. “Sometimes, in particular during economic downturns, cost reductions drive service levels down which in turn leads to end customer complaints. Keeping both parties happy can be challenging and the increased use of social media to air complaints, potentially damaging a supplier’s reputation, is a concern,” states Beesley.He goes on to add, “With potential economic downturns always a threat, it is important that the FM solution is flexible enough to scale up or down in line with a client’s budget changes. At Transguard we work closely in partnership with our clients and ensure a truly flexible service offering.”

MMG has a long and proven track record of working with retail groups such as Alshaya, Azadea and Chalhoub Maghrabi, in addition to leading brands like Virgin, Boots, Starbucks, Dunkin Donuts, Marks and Spencer and Galeries Lafayette.According to Abillama, one of the biggest challenges is dealing with retail groups which operate 40 to 50 brands. “The facility management company has to understand and adapt to dealing with the requirement, not of one customer, but of 40 to 50, whilst also balancing the needs of the retail group as a whole,” adds Abillama. The key, Abillama says, is to balance the needs of all stakeholders. “Even within the retail groups, there are a number of stakeholders, from the store managers to shift managers, and the merchandisers to the brand manager, in addition to the head of the FM within the retail group. Each stakeholder has their own requirements and needs, and everyone always thinks that their issues are the most pressing! It is an intricate balancing act, but one which we thrive on at MMG,” he adds.

International Standards

With many Best Practices being followed, the standards in the FM industry, in many ways are on par with the international standards. The showcase malls in Dubai have excellent management standards with footfall and sales stimulated by their location, marketing, the shopping environment, their tenant mix and of course the weather.

Deryan says, “UAE is perhaps one of the most advanced countries in terms of technology and customer experience. Following this, we service-providers toe the line of providing highly professional services at par with international best practices and certified as per ISO and other bodies.”“In most cases, the front-of-house standards are up to world class,” says Dowall. “The challenge for the operators is to continue to attract new tenants and retail offers to maintain performance against increasing competition, e-commerce sales growth and changing consumer trends. Only by employing proactive retail asset management services and of course continuing to get the basics right will these malls be able to maintain their dominance in the market.”The required levels of performance across the UAE are varied. The luxurious or boutique malls tend to invest more in facilities management in order to ensure a world class service. “There are many examples of world class retail facilities across the region and this,” Beesley says, is a must in a country where people spend a significant amount of time within malls due to the climate. He also notes that in more conventional malls, often a more ‘cost-efficient’ and conventional solution is chosen. Despite this, he adds, that the standards would still be considered high when compared to international counterparts.

Megha S Anthony
Editor FM Today