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With more options, Great S'pore Sale not so great anymore, say local retailers
THE Great Singapore Sale (GSS) isn't as "great" as it used to be, say an increasing number of retailers speaking of the nation's most anticipated annual shopping festival.
Industry insiders like R Dhinakaran, managing director of Jay Gee Group, cite factors like increasing competition from online retailers, the strong Sing dollar, Singaporeans' increasing penchant for shopping overseas, and the proliferation of numerous other sales events throughout the year for taking some of the sheen off the two-month shopfest every year.
Mr Dhinakaran says GSS used to account for more than 20 per cent of his group's total annual sales some 10 or 15 years ago. "GSS is no longer that great, even though it has 'great' in its name. Now, it's a lot lower in terms of dollars, and in terms of percentage of total units sold." GSS has not helped increase sales as far as Jay Gee's shops are concerned, he added.
It's a sentiment echoed by James Che Weng Foo, sales and merchandise planning manager at Isetan, who added that the retail market has been softening for some years now. "The Great Singapore Sale does not feel like a national event anymore."
Sally Tang, senior manager at department store group OG Pte Ltd, said her group had also seen dwindling response during GSS in recent years: "Generally, its the impact has certainly reduced from 20 years ago."
Held from May 29 to July 26 this year, the annual shopping campaign falls smack at the middle of the midyear school holidays. And that is also the second biggest travel season for many Singaporeans, noted Ms Tang.
"When travel becomes cheaper through budget airlines, people have more options to leave the country and shop overseas," she added.
Wong Sioe Fang, executive chairman of department and specialty stores owner Metro Pte Ltd, added that the strong Singapore dollar has made overseas shopping much more attractive now, especially for those travelling to Japan, Australia and neighbouring Malaysia, whose currencies have all depreciated relative to the Sing dollar.
And this is an important factor as the resident shopping segment has traditionally been important as it tends to form the bulk of spending during GSS.
Outbound departures of Singapore residents during school midyear holidays in May and June have steadily increased over the last five years. In 2014, outbound departures of Singapore residents during the period were 730,861 and 896,499 respectively - a strong growth from 622,358 and 685,279 in May and June in 2010. This year, outbound traffic from Singapore in May rose 8 per cent to 789,999 (data from June onwards is not yet available).
According to MasterCard, the official card brand for GSS, expenditure by visiting MasterCard cardholders increased 9.9 per cent to S$350.6 million in the first month of GSS. But local cardholder spending shrank to S$684.9 million, or by 12.7 per cent this year. The overall volume of transactions dipped 7.2 per cent compared to the same period last year.
"There is a slight dip in spending from the locally issued MasterCard (credit) card holders during the first month of the sale. This may be attributed to more Singaporeans travelling overseas during the school holidays and making online purchases," added Anthony Gan, executive director of the Singapore Retailers Association.
Local retailers have also been battling rising competition from online shopping portals. Mr Gan says there has been "a dramatic increase in online shopping, and this explosion is partly fuelled by the high penetration of Internet-enabled smartphones".
Dione Song, managing director of online fashion retailer Zalora, said consumers are starting to demand a more seamless shopping experience across channels and devices. Zalora has been taking part in GSS since 2013, when traffic and sales both peak compared to other periods of the year. The store's omni-channel offering allows customers to purchase products online, and later redeem them directly at the physical store by showing proof of purchase. More than five million people in Asia-Pacific have downloaded Zalora's app, according to Ms Song.
Online shopping website Lazada also jumped on the GSS bandwagon this year, after launching in 2014. The store has experienced double-digit sales growth, month-on-month since its launch in June 2014.
Cooking studio and kitchenware retailer ToTT opened its e-store in 2013, after the launch of its brick- and-mortar store in late 2010. ToTT director Grace Tan noted that the online marketplace is very competitive, with information easily available mere clicks away.
"Savvy consumers tend to do their research to compare between merchants before making a purchase decision, (which) makes it difficult to compete on price alone," she said.
But these "online stores" compete with traditional retailers, not just during the GSS period, but all year long.
Still, in compact and convenient Singapore, brick-and-mortar stores remain an important component of the shopping experience, with an outing an opportunity to visit not just retail outlets but also other establishments like restaurants, wellness stores, pharmacies, and places of interest. Window shopping in itself is "retail therapy" for many Singaporeans.
Mr Gan added: "There is still a role for physical stores, and the top reasons for this include the tangible benefits of touching and trying on the product, getting a salesperson's advice and getting their items faster."
But getting the right mix of these outlets in malls is the key to attracting and retaining clientele, said Heidi Yong, head of retail at property consulting firm Knight Frank. Landlords and department store operators have to develop win-win partnerships and innovative concepts and solutions in the current softer retail market to ensure mutual success and sustainability, she said.
So after 20 years, is GSS still relevant? "Singapore has sort of lost its place as a shopper's paradise," said Ang Swee Hoon, associate professor of marketing at NUS Business School, noting that prices of goods have increased over the years, making it easy for savvy shoppers to find cheaper items elsewhere or online.
"There is always a 'sale' (in Singapore) around the corner. Consumers know that if they miss a sale now, they can always come back later," she said, noting that after GSS, there are usually the National Day sales.
That said, there will always be a need for brick-and-mortar shops. But brands have to establish a strong physical presence and attract consumers to want to touch and try out products in person, Prof Ang added.
"People will always want to go out," she said.
But then, few retailers will deny that the Great Singapore Sale has lost some of its "greatness".
With additional reporting by Elizabeth Mak