THE global economic crisis has led to a slowdown in our economy, greatly affecting consumer purchasing power and consequently the performance of the retail sector. The annual Great Singapore Sale (GSS) starts this Friday, but can it create a wave of excitement and stimulate growth in the retail sector?

my paper spoke to CIMB-GK analyst Mr Song Seng Wun who pointed out the fact that due to the credit crunch, the tourists entering Singapore are more likely to be budget travellers than business travellers. Thus their spending power is definitely lower.

He also thinks that some traditional sources of tourist inflow such as tourists from Indonesia may still come to Singapore because of the GSS, but their budget will most likely be lower than previous years.

On the other hand, the Singapore Tourism Board (STB) has already launched aggressive advertising campaigns in many other countries. Besides emphasizing on the huge discounts during the GSS, STB also urges tourists to purchase local brands.

Some retailers are giving early discounts

Some retailers such as Frasers Centrepoint have already begun their own GSS last friday. Promotions include giving out free shopping vouchers, gifts and holding lucky draws to attract shoppers.

Mr Song also mentions, due to the threat of the H1N1 flu virus, affected holiday agencies have been engaging in price wars and coming up with rock-bottom air ticket prices. This in turn creates more opportunities for Singaporeans to shop overseas.

He notices that flight ticket and hotel accomodation prices for many countries like Hong Kong and Japan have been reduced greatly of late. These never-before-seen low prices are sure to entice locals to go on shopping trips overseas. This is definitely not a good sign for the GSS.

In the face of competition from countries in the region, local retailers must take an aggressive stance. They must increase the variety of discounted goods in order to capture the hearts of locals.

Creative strategies from luxury brands

During this economic crisis of late, the hardest hit must be the luxury brand industry as consumers turn to lower-end alternatives.

When interviewed by my paper, Cartier Regional Manager Mr Christopher Kilaniotis pointed out the fact that Cartier is a long-standing brand of 162 years and has weathered many economic crises.

He does not feel that it is necessary for luxury brands to engage in promotions during economic crises in order to attract consumers. He has also noticed that consumer confidence is increasing and people are starting to spend again.

Mr Kilaniotis feels that GSS typically helps to attract crowds to shopping malls, thus sales figures during the GSS is usually better than other times of the year.

This year, Cartier launched its Love collection and limited edition Love charity bangles. He is confident that the sales figures this year will rival those of the previous year.

Club 21, famous for selling designer products is taking a more creative marketing approach this year. During the GSS, Club 21 is going to hold promotional activities in The Pit Building, the garage for the Singapore Grand Prix.

Heartland malls may perform better

Many retailers interviewed by my paper feel that suburban malls may outshine their counterparts in the city during the upcoming GSS.

Last month, Japanese brand Uniqlo was first launched in Singapore creating a frenzy in Tampines 1. It certainly brought life to the mall which opened its doors to Singaporeans early in April.

Another new shopping mall is the dazzling Iluma, which is located on Victoria Street.

There will be seven other shopping malls opening in the later half of 2009. Out of these seven malls, four will be situated along Orchard Road. They are: 313@Somerset, ION Orchard, Orchard Central and the Mandarin Gallery.

Another heartland mall, Jurong Point, has recently expanded its floorspace and introduced more retail outlets. Consumers now have a wider variety of products to choose from.

According to reatailers in Tampines 1, the crowd in the mall during its first two weeks of operation was very heartening. However the crowd has slowed down by a fair bit recently. Despite this, they are still optimistic about this situation improving during the GSS.

A reduction in crowd size after the opening of the mall

The Manager of Man Master, Kim, feels that the crowd during the first few weeks of operation of the mall is largely due to the curiosity of Singaporeans. As the excitement about the new mall dies down, the crowd dies down as well.

Kim also mentions that in times of economic crisis, Singaporeans will still shop, dine and purchase daily necessities at suburban malls that are situated near their homes. This is why in recent years we see the trend of crowd flow increasing in suburban malls as compared to their counterparts in the city.

Kim did not eliminate the possibility that suburban malls will outperform malls in the city during the upcoming GSS. Many Singaporeans fear the high ERP charges and parking fees when they enter the city.

Shopping at suburban malls frees Singaporeans of these worries. Moreover, many retail chains have made their way into suburban malls, so it is not a must anymore for Singaporeans to go to malls in town in order to get something from their favourite store.

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