Who spends, and how? A credit card executive explains

Sarah Quinlan, of MasterCard Advisors, talks to students during an International Business Week event.

Sarah Quinlan of MasterCard Advisors talks to students during an International Business Week event.

What’s new in consumer spending?

Luxury is lagging, and lodging is leading, the senior vice president and group head of market insights for MasterCard Advisors told a group of Fordham University students this week.

Sarah Quinlan, who visited the Lincoln Center campus as part of the Gabelli School‘s International Business Week, gave an overview of how people are using their money. Luxury goods is one of the areas that is not strong today, she said, while travel—including hotels and airline tickets—shows growth.

This insight was among the many Quinlan shared with her audience on Tuesday, along with how MasterCard uses this information to help businesses tailor their practices.

It’s not just what people spend their money on, she pointed out. It’s where.

“We in the United States do not like department stores,” Quinlan said, offering an example that will ring true to most American shoppers.

The layout of the stores, she said, is contrary to shopping patterns. It is not convenient, or in sync with the people – namely women – who actually purchase things. For example, men’s clothing is often on the first floor.

Quinlan looked at the male students in the audience. “You never buy,” she joked. “I notice.”

Taking the escalator up one level does not help matters much, Quinlan said. She pointed out that a department store’s second floor is typically devoted to things that “millennials” like, but their spending power is not the strongest.

Sarah Quinlan

Sarah Quinlan

Whose is?

People just like Quinlan—whom department stores are mostly ignoring.

“[Things I want are] on the sixth floor in the back,” she said. “Really? And I just told you I have no time.”

Data show that unlike department-store behemoths, smaller specialty stores are doing better. Another data shift indicates that in previous generations, parents did not spend money on their past-teenage children— but that has now changed, Quinlan said.

“So what does that mean? What do you do if you’re thinking about marketing?” Quinlan asked. “You market to me for my millennial child. Come on! We’re suckers! We will spend enormous amounts on them.”

The marketing required is a tricky two-step process — businesses must build interest in their products among millennials and then market to their parents to generate sales.

“It’s more work for the retailers, but it’s the way to ensure that stickiness of spending,” Quinlan said.

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