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E-commerce and fashion sales to younger women are the silver linings of a generally dark economic picture.
That’s according to Sarah Quinlan, group head and senior vice president of MasterCard Advisors, who has a better view on the world of commerce than most — MasterCard sees 160 million transactions an hour and runs the data through 700,000 rules and algorithms to track consumer spending.
“Spending for October will be weak, there’s no doubt about it,” Quinlan said. “You shut down the government for two weeks, put 800,000 people without a paycheck and people stop shopping. And everyone else stops shopping because they think it’s going to happen to them…the carry-on effect, that’s the issue.”
The government shutdown and the contentious debate to extend the debt ceiling were just the latest economic worries for shoppers, who have also weathered an increase to payroll taxes and, last year, concerns about the state of Europe.
And those worries come against the broader backdrop of a very slow climb up from deep recession. Quinlan also noted that median incomes are 9 percent below 2007 levels.
That’s made catching and keeping the consumer’s attention a very competitive and vital skill for brands and chains.
“The issue for you as retailers is, go out and capture a larger share of the wallet because the wallet is absolutely flat,” Quinlan said. “You can’t sit there and think, ‘I’ve got to find a new customer, they’ve got more money.’ They don’t. The key is you’ve got to love that person [who’s already shopping you], bring them closer and have them not going anywhere far from you.”
One way to keep that customer close is to be where they are — and today that means online.
“E-commerce is healthy here in the U.S., still double-digit growth year-over-year,” Quinlan said. “So understanding and having that omnichannel presence is beyond important.”
Web sites also aren’t discounting as much as brick-and-mortar stores — music to the ears of any accountant.
“We’re lazy, we go to maybe one, maybe two sites and then we shop,” she said. “So you’re able hold a bigger price point when you go online as opposed to when someone goes into the mall, they can go to 20 stores at once and so the prices are much more competitive.”
And while women’s apparel is a “very challenged” part of the market, Quinlan said there is hope in younger women.
Women’s apparel for 18- to 35-year-old shoppers has done “extremely well this year and continues to do well and rebound,” she said.
“That is the most important thing,” said Quinlan, who also sounded a note of caution in the area. “We see youth underemployment around the world, and that’s extremely concerning for spending because that’s the impetus, it’s the thought and the hope that you’re always going to earn more that causes you to spend.”