Global con­sumer spend­ing shifts from shop­ping to travel

Sunday Times - - Thebackpage Global Consumer Spending Shifts From S - Arthur Gold­stuck Gold­stuck is founder of World Wide Worx and ed­i­tor-in-chief of Fol­low him on Twit­ter @art2gee and on YouTube

It’s not yet the death of re­tail, but it’s a fact that we don’t buy as much goods in stores

Anal­y­sis of global spend­ing data has re­vealed a mas­sive shift in spend­ing pat­terns, par­tic­u­larly among trav­ellers. Clothes buy­ing is fall­ing glob­ally, shop­ping in stores is slow­ing down, and peo­ple are di­rect­ing dis­cre­tionary spend­ing more at ex­pe­ri­ences than ma­te­rial pos­ses­sions.

These were some of the find­ings re­vealed by Sarah Quin­lan, se­nior vi­cepres­i­dent for mar­ket in­sights at Master­card, speak­ing dur­ing the World Cities Sum­mit in Sin­ga­pore this week.

“I don’t shop any­more, we don’t shop any­more,” she said. “Amer­i­cans have stopped buy­ing clothes, and ap­parel spend­ing is drop­ping world­wide. The first rea­son is that we dress more ca­su­ally for work. The sec­ond thing is that we no longer value clothes as much.

“It’s not yet the death of re­tail, but it’s a fact that we don’t buy as much goods in stores. So they have to of­fer more than shop­ping. They have to an­swer the ques­tion, how do you keep us oc­cu­pied?”

It’s not that peo­ple are spend­ing less, though. It’s that they are spend­ing it dif­fer­ently. Re­tail spend­ing is swiftly mov­ing on­line, while travel has be­come the way peo­ple ex­press their wealth. But, says Quin­lan, there is also a shift in travel.

“One of the chal­lenges Hong Kong has, for ex­am­ple, is that it was to­tally set up for re­tail and shop­ping. But peo­ple aren’t trav­el­ling for shop­ping any­more, they’re trav­el­ling for ex­pe­ri­ences. Peo­ple still shop, but it has dropped dra­mat­i­cally.”

Ev­ery coun­try has to fo­cus on what is unique about the op­por­tu­ni­ties it can of­fer, says Quin­lan. She points to the suc­cess of Tourism Aus­tralia, which re­alised that no one knew what to do in that coun­try be­yond the Syd­ney Opera House and look­ing at koala bears.

“They re­alised they had to do a bet­ter job of cu­rat­ing their at­trac­tions. As a re­sult, peo­ple are stay­ing longer, spend­ing more, hop­ping mul­ti­ple cities. It’s not a cheap place, but tourists are spend­ing more be­cause Aus­tralia has shown them what they can ex­pe­ri­ence.”

Part of the chal­lenge of part­ing tourists from their money is com­mu­ni­cat­ing loudly and of­ten, and us­ing so­cial me­dia ef­fec­tively. As a reg­u­lar vis­i­tor to South

Africa, says Quin­lan, she was shocked to learn only now that Cape Town had in­def­i­nitely post­poned its Day Zero dead­line.

“In the US, the nar­ra­tive is still that you can’t get wa­ter in Cape Town be­cause of Day Zero, so peo­ple are not plan­ning trips there. I had no idea Day Zero was gone. Given the city’s past, and given its de­pen­dence on tourism, it was re­ally im­por­tant to share that in­for­ma­tion with the world.”

The Master­card data also re­veals that vis­i­tors from dif­fer­ent coun­tries spend money dif­fer­ently. Bri­tish vis­i­tors to South Africa are in­creas­ingly buy­ing ex­pe­ri­ences. Those from China are typ­i­cally pre-pay­ing for all meals and tours, so are not spend­ing money once they ar­rive.

“It’s very im­por­tant to seg­ment groups and not just say a vis­i­tor is a vis­i­tor,” is her ad­vice. “Fig­ure out what you want to mea­sure and the fre­quency of mea­sur­ing it. Then it gets down to seg­men­ta­tion. We are crea­tures of habit, and ev­ery­one has a spe­cific pat­tern. You can use that to grow tourist spend­ing.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.