Property market wobbles and a fragile share market are forcing high-end retailers to resort to novel ways to keep big-spending customers ringing up the tills.
Their gambits include offering luxurious gifts to top clients and tying up with other brands to co-host special events.
Luxury retailers told The Straits Times that business is holding up and they forecast stronger sales in Asia as a whole this year, but they also expect they will have to work harder to get that business.
Although these retailers cater to a wealthy clientele with plenty of cash to spend even in downturns, they are not immune to economic slowdowns.
Global sales of luxury goods fell about 8 per cent in 2009 in the midst of the financial crisis, though they recovered quickly by 2010, according to consultancy Bain & Company.
Singapore is far from an economic crisis, but financial and property markets have been softening.
The benchmark Straits Times Index has been volatile since the United States Federal Reserve began tapering its bond-buying programme at the start of the year.
Private home prices fell 0.9 per cent last quarter, with economists expecting further softening.
"2014 will no doubt be challenging," said a spokesman for Ferrari Store Singapore. The company's sales have held up so far, helped in part by tourism spending, he said.
High-end travel agency Country Holidays said inquiries have slipped slightly, but the weaker market has given it an edge in negotiations with suppliers, allowing it to include perks such as room upgrades and charter flights into tour packages without raising prices.
High-end glass maker Zwiesel Kristallglas has also had to get creative, said Asia-Pacific managing director Christophe Oudin. "With the slowdown of the economy, there is a tendency to spend less disposable income, and this affects the retail business," he said.
The company noticed a 20 per cent decline in the sales of regular-priced items in the last quarter of last year, but still managed to increase sales by 15 per cent overall by launching special promotions.
This month, it tied up with tea firm Gryphon to make an exclusive "Kristall Tea" blend that was not available for sale, but would be given away to Zwiesel customers who spent at least $200.
Such collaborations are becoming more popular, said Ms Irene Ho, chief executive of marketing consultancy The Luxury Network Singapore.
Earlier this month, the firm brought together Ital Auto, the official Ferrari importer, and Savills for a joint super car test drive and luxury properties showcase.
"By coming together, fixed costs are shared and excess funds would be better directed to other areas to raise the quality of an event," Ms Ho said.
After all, the common tactic of offering discounts is not quite done in the luxury world.
"We are not so much into sales promotions because we want to maintain the luxury status of Gaggenau," said Gaggenau Asia managing director Denise Tan.
"So, to keep business coming back, we will continue to offer luxury experiences for our customers. We hold special gourmet events, we import white truffles to reward them, we work with celebrity chefs to demonstrate how the appliances work and we work with brand partners like Zwiesel to do joint events."
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