Virgin aims for 100% growth in the region
The landscape of music retail is changing rapidly as the digital download age threatens to consign CDs to the dustbin of history.
But that fundamental change in consumer habit is happening slowly in the Middle East than some experts anticipated.
Nisreen Shocair, the Regional President of Virgin Megastores (pictured above), gives compact discs a shelf life of another five years.
“I think in this region CDs have about another five years left,” she told Emirates Business. “When I first joined Virgin I thought it would be about one year, but it turns out a lot of people still need a physical product when they buy music.
“Music sales have not gone down as much as we thought they might. We’re selling iPods in the knowledge that the customer buying it is going to go and buy the CDs, too.
“Of course, we’ve seen a decrease in CD sales in some Virgin stores, but music sales in the Mall of the Emirates are compensating for the decrease in sales elsewhere.
“However, the younger customers will soon end up buying music in an entirely digital format – we have plans in the next three to four months to introduce a content area in-store, where customers can carry out physical downloads using USB or wireless.”
At the relatively tender age of 33, Shocair is at the helm of a sizeable empire: Virgin Megastores is currently the largest entertainment retailer in the Middle East with more than 60 per cent market share – Shocair claims market share is closer to 80 per cent.
Megastores employ more than 700 people regionally, receive an average of 15,000 customers daily and operate 11 stores in the Middle East, including five in the UAE.
The company plans to open three stores every year, as it aims for 100 per cent year-on-year bottom-line growth in the region.
Shocair explained that the biggest growth area for the business is currently multi-media and books. But she believes the key to ensuring future growth lies in making Megastores more appealing to women and children.
“We’re trying to get mums and kids, because at the moment the growth is coming from men over 25 years old,” she said. “So, we’ve launched the Virgin boutique – the first one opens in Qatar City Centre, then the Mall of the Emirates, and it will focus on things such as jewellery and gadgets.
“Then we’ve got the launch of Virgin Kids, which will also probably start in Qatar, selling toys, activities, arts and crafts.
“I think at the moment there’s a situation where you may have a married couple with a child, and the man wants to go to Virgin but the woman doesn’t want to. To attract more women, we’ll sell more mind, body and soul products, books on managing your wedding and that kind of thing,” she said.
Shocair compares the evolution of Virgin Megastores to the way in which shopping malls have developed into an all-round leisure experience.
She said: “A shopping mall used to be just a range of stores, but today it is much more than that. You spend time there, your children play there and on the way round you also do some shopping.
“Virgin Megastores evolve in the same way as the malls, with activities built into the experience. We have about an 80 per cent market share of the retail entertainment sector in the region. We’re looking for 100 per cent bottom-line growth, which is not an easy task,” said Shocair.
Following the announcement in September this year of Richard Branson’s plans to sell the United Kingdom and Irish Virgin Megastore division, the Middle East operation was quick to confirm that this move would have no effect on their local and regional business, as it is a franchised operation owned by the Lagardere Group, the French media company. This means all Virgin Megastore branding in the Middle East will remain intact; however the 125 UK and Irish outlets will be re-branded in line with the recent management buyout.
In 2001, the Virgin Megastore worldwide was split between the Virgin Group and the Lagardere Group. The Virgin Group kept the Megastore outlets in the UK, Ireland, the United States and Japan, while the Lagardere Group took over the shops in France and travel retail locations all over the world including Australia, China, Greece, the Middle East and North Africa.
Follow Emirates 24|7 on Google News.