Data on consumer spending patterns can help retailers target their marketing campaigns more effectively, according to Sarah Quinlan, global group head of Mastercard.
Data on consumer spending patterns can help retailers target their marketing campaigns more effectively, according to Sarah Quinlan, global group head of Mastercard.
Speaking at the ICSC European conference in London on Tuesday, Quinlan said retail landlords can use big data to understand and rate a store and how the flow of traffic works. ‘Data is priceless. We use data to drive a business, to understand who’s spending and who to attract.’
One indicator for understanding future consumer spending revolves around the purchase of air tickets, data on which is available well in advance of the actual trip, Quinlan pointed out. ‘Retailers can reach out to these consumers instead of using shotgun marketing. They should target those who have the propensity to spend and where they are likely to be. Retailers need to see the patterns and understand who will have the ability to buy.’
Thanks in part to falling oil prices, consumers are spending again on air travel, Quinlan said. In terms of travel destinations, London is number one in the world, with a total tourism spend of some $19.2 bn, followed by New York with $18.57 bn. Feeder cities of tourism spend are New York whose average traveller spends $1,016 a day, followed by travellers from Amsterdam who spend around $324 a day and Frankfurt at $271, data from Mastercard shows.
Americans in particular have the travel bug, Quinlan said. ‘We want to travel more than anything. But you only need to target 27% of the population. They’re the only ones who have a passport. That’s how you can use the data.’
Commenting on consumer spending in the US, Quinlan said confidence has been growing since October 2013 when more consumers started to buy more expensive jewellery. This is an indicator that more robust spending is back, she added. ‘Jewellery has a permanence about it…25 months ago we saw a secular change in spending behaviour. You need to focus on behaviour which will be repeated.’
American consumers are also spending more time in restaurants, she added. ‘Consumers are absolutely spending more in this space, it used to be more on fast food but now fast casual or just casual is in. You must lead in a shopping centre with a restaurant. We don’t cook anymore. We’re putting our boots in the oven, using them for storage. We like our family and friends again.’
At the same time luxury shopping is falling, she said, pointing to a decline in spending by the Saudis and Russians. And in the US boutiques are more popular than department stores, she said. ‘US consumers don’t like department stores. We’ve seen negative growth there for the past 14 months. The format works in the UK and Canada but we don’t like it. Americans prefer to go shopping in specialty stores. We shop small. That means landlords need to think about the mix.’
While ecommerce is making inroads into spending in physical stores, Quinlan is convinced bricks and mortar will never die. ‘Ecommerce is just a way to complement the physical store.’ The social aspect is also important, she added.
What retail landlords need to do is think more laterally, Quinlan said. ‘You need to think about tying in a hotel next to a shopping centre. Think about retail space as an ecosystem and how you can capture all the spending.’ Partnering initiatives between mall and local wineries are another option, she said. ‘Landlords need to explore how they can capitalise more on retail tourism. Create an experience and I promise they will spend.’