Mega sales help, but may not revive Singapore's retail sector
Retailers are ending the year with a bang by pulling out all the stops for possibly the last mega sale of the year. The 12.12 sale on Dec 12 comes on the tail of three successful clearance rounds last month - but analysts say that such mega sales may do little to revive Singapore's retail scene.
The 12.12 mega sale reportedly has its origins as Chinese e-commerce player Taobao's response to Alibaba's hugely popular 11.11 - or Singles' Day - sale, which is now the world's largest 24-hour shopping event.
In Singapore, retailers - encouraged by the good showing from Singles' Day, Black Friday and Cyber Monday - are not letting up on Dec 12, especially given its proximity to the year-end festivities.
"The festive buying mood will be strong. We believe many consumers will start Christmas shopping earlier," said Terence Ang, head of digital marketing and e-commerce at electronics retailer Gain City.
E-commerce platform Shopee said Dec 12 is a key date for the firm as it is running a two-week-long birthday sale campaign with promotions such as free shipping and cash-back offers.
While this is all good for consumers, analysts were less upbeat about the impact of having several mega sales in quick succession.
"When there're a lot of promotions, people might get used to them in the sense that promotions become a new reference point for consumers, and they may be more reluctant to buy until the next time there's a sale," Leonard Lee, associate professor of marketing at the NUS Business School, told The Business Times.
He added that the volume of mega sales could also create scepticism about whether these are truly good deals.
Wong King Yin, who teaches marketing at Nanyang Business School, believes that competing on price creates a vicious circle for retailers in an already cut-throat industry.
"It's not very favourable to the retailers themselves because once the consumers buy because of low prices, the whole scene has become even more challenging to the retailers," Dr Wong said.
But mega sales and promotions can serve other purposes, Prof Lee said, as they clear inventory and create a touchpoint for new customers.
Charuvagun S, regional director of customer success for South-east Asia at e-commerce analytics firm Capillary Technologies, said that shopping sites can use mega sales to showcase their integrated and seamless shopping services from display to selection and checkout.
"If it is a good experience, customers will come back, and this would translate into sales after non-sale or low-peak periods," he said.
Source: The Business Times, 12 December 2019
As to whether mega sales can build brand loyalty however, Patricia Lui, marketing lecturer at the Singapore Management University, was doubtful. She said: "Loyalty is about customers' psychological attachment to the brand, which involves one's emotional connection and devotion to a brand over time."
This can be done in several ways, Dr Wong suggested, for example by having good service quality, after-sale services and loyalty programmes like exclusive sales.
Mr Charuvagun said the key lies in providing a personalised experience. "Running loyalty programmes can help retailers keep track of their member data that can significantly help in personalising the offers," he said, adding that his clients have seen an improvement in overall repeat revenue thanks to personalised
recommendation e-mails.
As economic uncertainty lingers into 2020, Prof Lee said, having a targeted strategy would give retailers a competitive advantage.
"They have to think about where they're located in the entire retail space - are you a luxury player or a Walmart?
"The sharper and more refined your market position is, the easier it will be for you to design marketing strategies to reinforce that position, and the clearer the position will be in consumers' minds," he said.
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