Research Spotlight: Brahim Fezzani on the Determinants of Retail Competitive Advantage

By the time researchers finished asking 394 shoppers why they kept returning to Naza Mall, the answer did not look like a price war. The crowded Erbil hypermarket’s edge, the data suggested, rested on five interlocking levers: service, policy, price, convenience and promotion. Price made the list, but it was never the whole story.

The 2013 paper, by the economist Brahim Fezzani, who has served as Economics Lead at the University of Central Asia, landed in the middle of a retail building boom that was remaking Erbil, the capital of Iraq’s Kurdistan Region. Its timing is what makes it worth another look. The analysis captured a popular mall at the exact moment the city’s shopping centres were multiplying and fighting over the same customers — and the mall itself would be gone within the year, pulled down to clear ground for a skyscraper.

That collision is the reason the study still earns a read. For a mall operator in Kurdistan, a retailer in a saturated suburb, or a business student learning the difference between a marketing slogan and a measured edge, the paper offers a survey-based answer to an old question: why does one store win when a rival across the road sells the same things?

The oil boom that turned Erbil into a mall city

In the early 2010s, Erbil was often described as “the other Iraq.” While much of the country grappled with violence, the Kurdistan Region’s capital was channelling oil revenue into construction. Local media reported a mall boom squeezing the city’s ancient bazaar traders, with developers promising complexes holding thousands of shops. New City Mall had opened in 2006, and Royal Mall and Family Mall were drawing weekend crowds by the time Fezzani’s survey circulated.

The numbers behind the cranes were striking. Erbil’s economy grew 8 percent in 2011, and its GDP sat about 50 percent higher than the rest of Iraq in 2012, according to Kurdistan Regional Government figures cited in contemporary reporting. A giant Downtown Erbil project, led by Dubai’s Emaar Properties, was announced in October 2013 with a price near $3 billion and a promise of tens of thousands of jobs.

Fezzani’s paper opens inside that competition. He described hypermarkets as among the most familiar daily destinations for Erbil’s consumers, and the explosive growth of malls, he wrote, had managers searching for any competitive advantage that could lift market share. Naza Mall was his case study: the most popular hypermarket in the city, in the paper’s telling.

Ask the shopper, not the manager

To find Naza Mall’s edge, Fezzani did not start with sales ledgers or management interviews. He went to the people pushing trolleys. A questionnaire was administered to 394 customers, and the responses were run through principal components factor analysis, with cross-tabulations used as a supporting check.

Factor analysis deserves a plain-language pass, because it is the engine of the paper. Imagine a long playlist of 44 songs. You suspect the tracks actually fall into a few moods, even though no song carries a label. Factor analysis listens for which songs move together and names the hidden moods. Here, the paper treated 44 underlying, non-observable attributes as the songs and condensed them into a smaller set of variables that explained Naza Mall’s appeal.

The variables that emerged were service, policy, price, convenience and promotion, with the paper’s abstract also listing “general advantages” alongside them. An Empirical Analysis of the Determinants Competitive Advantage: The Case of Naza Mall, Erbil, Iraq is available on Academia.edu.

Photo by Michael Weidemann on Unsplash

Five levers, and why price alone misses the point

Each variable is a practical, shopper-facing thing. Service covers how staff treat customers at the point of sale. Policy covers the store’s rules, from return terms to how a complaint gets handled. Price is the amount shoppers hand over and whether they think the value matches it. Convenience covers location and parking, plus how quickly a customer can get in and out. Promotion covers offers and advertising, along with the signals a store sends to pull people through the door.

The paper groups these into price and non-price dimensions of the same competitive advantage. That framing is the useful correction. Cutting prices is one lever in a five-lever system, not a strategy on its own, and the 394 responses suggest shoppers were weighing the whole bundle when they chose Naza Mall. A customer who finds a product quickly but waits ten minutes at the till has experienced good convenience and bad service at once; the method lets those two judgements stay separate instead of collapsing them into a single happy-or-unhappy score.

Rudaw’s reporting from the same period caught the calculation in a shopper’s own words. “You can get everything at the malls in one location and you don’t have to walk around everywhere to get what you want,” one customer told the outlet in 2013. That is convenience doing quiet, measurable work, the kind of thing a spreadsheet of prices alone would miss. Rudaw documented the wider mall boom as traditional bazaar traders felt the squeeze.

Fezzani’s discussion of the results points the same way:

“The 394 questionnaires show that Naza Mall’s advantage was never one thing. Service, policy, price, convenience and promotion carried the weight together, and a manager who competes on price alone misreads what keeps customers coming back.”

What the method can and cannot prove

A single mall in one city, studied at one moment in time: the paper’s scope is narrow by design. It describes Naza Mall’s customers at that moment, not a universal law of retailing. Factor analysis is exploratory. It groups survey answers that cluster together, but it cannot prove that improving service will cause a competitor’s customers to switch. The 394-respondent sample is respectable for this kind of work, yet it reflects a boom town with a young population and rising incomes — a context that does not travel everywhere.

Some retail researchers would be cautious about generalising for a second reason. The five variables map closely onto the marketing mix that business schools have taught for decades, so the finding is confirmatory rather than surprising. Its value is empirical: it shows that a real, crowded, successful mall in an unusual market was being chosen on those familiar terms.

The publicly available version of the paper does not specify funding sources or conflicts of interest, which is itself a transparency gap worth flagging.

An independent retail researcher put the caution plainly:

“Factor analysis can tell you which survey answers cluster together. It cannot tell you which changes will keep customers once a bigger, newer mall opens across the road. This is a well-executed snapshot of one mall, in one city, at one moment.”

The mall that vanished

No methodology section can prepare a reader for what happened next. Naza Mall did not survive the boom it symbolised. The Kurdish Globe reported in February 2013 that a three-storey mall building had been brought down on a main Erbil street to clear ground for Naza Tower, a planned 275-metre, 65-floor skyscraper. The tower was a joint venture between the former Naza Mall owner and another local company, with a reported price tag of $120 million. The Kurdish Globe’s account of the project captures the scale of the ambition.

An Erbil blogger later remembered Naza Mall as “the only modern shopping place” where you could push a trolley, before Family Mall took over and the old building was “destroyed and smashed down.” The study, in that light, reads as a field record of a place that no longer exists — a winning formula documented around the time the site was being cleared.

Photo by Viktor Bystrov on Unsplash

Why the five levers still matter

More than a decade on, the paper’s practical message has aged well because the five variables are cheap to measure and easy for busy managers to ignore. The lesson is not “be excellent at everything.” It is that shoppers evaluate a bundle, and a store that leans entirely on discounting is betting on one variable while competitors quietly win on the others.

There is also a planner’s warning in the Naza Mall story. Erbil built retail space faster than demand could absorb it, and the city’s most popular hypermarket was replaced by a tower before the decade ended. RAND researchers visiting in 2013 had called Kurdistan “the other Iraq,” a place where progress was measured by the opening of new malls. Their field notes from that summer describe a city mid-boom.

Over the next five to ten years, the same question will replay in every market where e-commerce meets the physical store. Which levers still justify a trip through the door? Fezzani’s answer, five variables measured from 394 real customers, remains a sensible starting point: ask the shopper, not the spreadsheet.