How the Great Singapore Sale benefits Singapore’s economy
With both locals and tourists bargain-hunting, the Great Singapore Sale benefits not only retailers and brands, but less obviously also helps the economy overall.
An indirect government stimulus program, it is the largest retail event in Southeast Asia, lasting from June 9 to August 13.
The Great Singapore Sale (GSS) is organised by the Singapore Retailers Association (SRA) and supported by Singapore Tourism Board (STB) and UnionPay, the official card for the second year running.
This year a mobile app, GoSpree, has been introduced, following up from SRA president R. Dhinakaran urging retailers to explore technology innovations to stay ahead in a competitive environment.
This and other technology tied to the GSS prompts shoppers to seek out discount codes, and helps them make value comparisons.
Unlike other sales that are independently initiated by individual retailers, the GSS is a concerted government effort to boost consumer spending by encouraging retailers on a national scale to engage in price cutting.
Researchers at the National University of Singapore (NUS) Business School have been studying the GSS and its impact on consumption, based on credit- and debit-card transaction data.
They drew on a comprehensive dataset of transactions from more than 120,000 card holders, including demographic information such as age, gender, income level, credit limit and ethnicity.
Before and after
Led by Low Tuck Kwong Professor Sumit Agarwal, NUS Associate Professor of Finance Qian Wenlan and PhD student Kang Mo Koo, the research team studied Singaporeans’ shopping behaviour starting four weeks before GSS and ending one week after the event.
“While we expect the average spending per transaction to drop after GSS, we found the number of transactions were no different. We also noticed that total daily spending and average spending per transaction before and during GSS were no different,” they report.
Overall, Singaporeans spend 27 cents more on a daily basis during GSS, they found.
“While there were no differences in spending on dining, spending on apparel was affected. Specifically, Singaporeans spent 39 cents less on apparel in the week right before GSS and 25 cents less in the week right after.”
While spending on entertainment followed the expected pattern of a significant upturn during GSS with a drop afterward, sales of supermarket products only rose near the end of the event before tapering off after the sale.
Card use varied during GSS. Consumers preferred using credit cards first, later switching to debit cards.
Also, Singaporeans preferred to spend first on durable products, followed by non-durables – a sign of more sophisticated spending, with only left-over money being used for non-durables, say the researchers.
In summary, they say that as a stimulus program, the GSS has a greater impact on consumers with financial concerns, such as low credit, account balance and income, making them vary their shopping behaviour more as they respond to various discounts.