PLEASE STEP INSIDE!

RETAILERS in Bahrain are facing tough challenges as they attempt to woo shoppers into their stores instead of watching them walk on by.

Although the current global economic crisis appears to have least affected the region, many outlets are struggling to convince mall visitors to spend and not just look.

Shopping malls across the kingdom are offering an array of enticements to attract custom and get those tills jingling.

Just 12 months ago Bahrain and its neighbouring Gulf states were experiencing an unprecedented boom, a banking bonanza alongside a construction frenzy. Times have changed and money is tight.

"Currently cash is king," said Rodolphe Melki, CEO of Millennium International, a Bahrain-based trading, retail distribution and representation company.

"The retail market in the GCC and certainly in Bahrain - and by that I mean the fashion brands - have definitely been affected because shoppers are window shopping more and spending less.

"Although the economy started slowing down late last year people continued to buy due to Ramadan, Eid and Christmas. Now, since the beginning of 2009, we have started to feel the crunch."

Retailers are particularly concerned that a large number of expats will leave these stores for good at the end of their contracts when schools close for the summer holidays.

"There are a lot of uncertainties this year. I'm concerned about summer because many expatriates will leave due to job cuts, the impact of which will have to be assessed. But, people may not go away on summer vacations as they normally would and will end up spending their money here - so summer is going to be a double-edged sword.

"A true indicator will be the month of Ramadan when people generally buy ... but if consumer morale remains low then people may not spend," said Mr Melki, 41, who lives in A'ali.

News of a general global economic improvement may, however, help produce the necessary feel good factor, according to Bahraini, Nayla Asgharali, director of compliance at Ithmaar Bank. "It's more psychological ... when you keep hearing that people are losing their jobs then you feel guilty shopping.

"You always save for a rainy day and these days with job insecurity the rainy day does not seem very far off."

Nayla, who admits to being a keen shopper, agrees that her attitude towards shopping has changed and her shopping budget has come down by around 25 per cent.

According to a poll of 100 GulfWeekly readers, most agree that although they continue to visit malls their focus has shifted from buying to window shopping and dining at the food court.

In fact, shoppers are becoming more prudent, even with increased sales and special offers available - with some outlets slashing their prices up to 50 and 75 per cent.

GulfWeekly readers are looking for bargains and special offers when they come to parting with their cash, according to a consumer poll carried out by this newspaper.

Retail experts support our findings and say that shops are having to pull out all the stops to entice customers through their doors.

"When I go to a mall I look for bargains now more than ever and then only do I pick up something that I really need as opposed to buying previously just because it was on sale," said one GulfWeekly reader in our poll.

Kareem Jawad, corporate divisional manager of Bahrain-based Jawad Group, explained: "Promotions are always part of the seasonal strategy for any business. It is likely that in the current climate there will be more frequent promotions to create demand and increase footfall. Having said this, the consumer is also intelligent and attempts by any brand to put on the pretence of promotion, with no real savings on offer, are unlikely to drive sales."

So the magic combination of good product, price and service will attract the shopper to spend during a time when it appears everybody is tightening their belt. "It is very important to have a tailor-made customer service. It's all about communication.

"A creative employee who is service-oriented is important at all levels of the organisation. Working smart and ordering the right amount of stock, doing a complete 'due diligence' and a market study are the needs of the day," said Rodolphe Melki, CEO of Millennium International, who draws from his previous experience as the country manager of the Azadea Group.

Halcyon days of blatant consumerism have given way to smart shopping.

And experts believe that many retailers will have to rethink their strategies and make business decisions accordingly. Retail is detail and the market is no longer thriving to absorb the glut of brands.

"Times such as these offer opportunities to re-examine the way you do business and to bring in efficiencies in all that we do.

"Our focus in managing costs has been in the back- office across our businesses and across the countries we operate.

"Brands do enjoy loyalty among consumers and it is this bond that is very important in current times.

"New brands which have entered the market in the last 18 to 24 months will need to work hard to secure similar bonding with consumers and this warrants staying power.

"We need to be efficient in whatever we do and stay lean. Also, expansion will be driven by sensible rentals and the days of landlord's rent expectations being at a total variance with sales potential is over," said Mr Jawad who has fashion brands like Hush Puppies, Monsoon, Accessorize, Pumpkin Patch, Mango, Bhs, Shoe Citi in his group's portfolio.

But all agree that the current depressed activity will give a new dimension to the retail industry where the retailers will be obliged to stretch beyond their comfort zones and make extra efforts to satisfy the customer so that they are tempted to dig deep into their pockets to spend their cash.