Sara Quinlan

“How do you reach her and how do you curate for her?”

Those were the two overriding themes in the presentation by Sarah Quinlan, senior vice president and group head of Market Insights at Mastercard.

According to Quinlan, 75 percent of transactions are still made by women. And with the new normal being the shift toward experiences, Quinlan said that “airline spending is huge, lodging is huge, as is dining out.” She ended her presentation concluding that retail and apparel companies should “think of these [sectors] as partners.” She noted that their presence in malls could “actually drive sales,” because travelers in a new locale really don’t know where to go.

Quinlan also provided data points — culled from Mastercard transactions, which number about 160 million an hour — showing how retail spending has changed to back her conclusion.

Few in the audience raised their hands when asked if they thought the economy is strong, and Quinlan was quick to note that data on total retail spend indicates that the “economy really is strong.”

Quinlan also noted that regionally, the Southeast is the strongest and the West Coast the second strongest, mostly because those locations are where the jobs are. That also means that a company in West Palm Beach or Fort Lauderdale needs to find a way — think digitally — to sell to consumers who aren’t in the area. Another indicator pointing to strength in the economy is the fast bounce back shown in the Houston and Florida areas that were impacted by the recent hurricanes. According to Quinlan, “This is a healthy economy. We don’t have to wait for the insurance payment to start to spend again.” The same isn’t true for Puerto Rico, said Quinlan, who urged attendees to donate to the area since they’re not having the same kind of recovery.

“The U.S. consumer is in better shape than you think,” Quinlan said.

But what has changed is consumers are spending more on experiences and less on stuff. That’s even evident when it comes to buying homes, she said, noting that the average square footage of new homes being built has decreased by 200 feet. “The way we buy stuff is actually to replace stuff.…It’s about curating who you are and what makes you unique,” she told the audience.

She also noted that Mastercard’s data “shows price is not why people are shopping where they are shopping.” That’s mostly because there’s essentially full employment in the U.S. The only time when spending was weaker this year was during April and May, when there was debate over the health-care bill. Quinlan said, “She gets worried when her budget gets high a little bit, then you can see her pull back. Otherwise she is all in.”

There was another interesting point that Quinlan zeroed in on about pricing, and that is that the consumer is willing to pay full price. According to Quinlan, the consumer wants the retailer to know who she is and what she wants. “She’s what we call a value-for-money consumer. If she values it, she’ll pay for it. So the point here is, I’m saying have less [and] make it worth more and that’s where you get your margins back up.”

As for apparel and footwear sales, she noted that sales in the fall season and for back-to-school were down, and that consumers are buying “just in time,” or when they need it. According to Quinlan, that suggests that companies should consider “just in time manufacturing” and think about “how fast something is consumed.” She noted that the only time consumers really plan ahead is when they buy an airline ticket, usually about two months in advance.

As for other categories and regions, sales of handbags and accessories rose slightly from year-ago figures. Sales in the U.K. are up, but that’s at an inflated level because of the 20 percent drop in the pound. And sales in Brazil over the last four months are showing signs of improvement. Department stores in the U.S. remain challenged. Quinlan said consumers are staying closer to home instead of make longer trips to the mall. That’s a reflection of the general trend of being closer to work and family, she said. In the luxury sector, jewelry sales were off, and particularly weak was the higher-tier component. In other areas, Canada is showing signs of improvement and Hong Kong has “improved after 21 months of negative spending.” Indian, Russian and Brazilian consumers are also spending, but not those from the Middle East due to the oil issues in the region.

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