CONSUMING EXPERIENCES: SARAH QUINLAN [UF D-TOUR]
Group Head Of Insights For Mastercard Discusses The Nature Of Spending & Human Behavior At Tourism Summit In Orlando
The texture of spending is what drives the world. How people consume goods and experiences drives both local and the global economy as well as destination and experiential travel. As Senior Vice President and Group Head of Market Insights for MasterCard worldwide , Sarah Quinlan is in a very unique position of being able to see how the consumer engages in all markets worldwide which then allows her to pre-visualize continuing economic trends. Quinlan sat down with MRV: The Buzz Editor In Chief Tim Wassberg at the University Of Florida D-Tourism Summit at the Disney Boardwalk Resort in Orlando to discuss goods, intentions and human behavior.
The Buzz: You were talking about priceless...priceless experiences. But the experience of travel is completely changing. When I was asking you a question earlier about online versus exclusives, can you talk about your perspectives of the idea of what an “experience” means?
Sarah Quinlan: It's actually blurred. And I think that's the most interesting thing. It's not just, "I travel," or, "I'm doing this." It's “My whole life is an experience” now. My daily life becomes experiences. And that's why you can, as I said, market locally, for example. I know that, for example, Disney World has always marketed [to] Floridians. But now I think they can even think it to one more level deeper because we're thinking about, "Let's just come for a day. Let's do that in an experience." It's very different than before where we would sort of compartmentalize: "This is our week for vacation and this is [that]." So our whole life is now thinking about, "Who are we going to share this with? What are we doing tonight? How are we going to enjoy our day?" And that's the interesting thing that was not what we did before.
The Buzz: Plus the aspect that we tend to work so much more and don't do enough play. Can you talk about the notion of play and the experience when we're trying to sort of save time for ourselves and how we don't do that?
SQ: Right, well...we haven't and that's been the big thing. We are a workaholic type of community as you know. The key thing, though, is that we changed a little bit in 2008. The recession really taught us that all this workaholicism didn't actually pay off for us. So now what we've done is we've found a balance between working and enjoying ourselves. And that's why you see a bit more mobility in terms of people quitting their jobs and moving on to things that they really much more enjoy. But I think this is the important part where we've actually, again, blurred the workplace where you actually see more companies trying to do experiential bonding at the office and doing activities outside of their own experiences which then a lot of people do themselves. I mean [at Mastercard] we've done things where we've gone cooking together as a team and things like that. Then people say, "Oh. Well, maybe we'll do this with our friends. Let's go to a place and learn how to cook for an evening with a chef." These are the types of things to understand as a change in lifestyle as opposed to, "Oh, I want to save to buy a new bedroom set." We're like, "I think it's okay. I'm pretty comfortable with this. I might, after 10 years do something like that," but the interesting thing, it's not a question of, "Can I afford it?" It's a question of a value of priorities and sitting there and saying, "I value spending on this versus this."
The Buzz: The great thing about you being Head of Insights at Mastercard is that you get to see everything.
SQ: Exactly.
The Buzz: Worldwide too.
SQ: Right.
The Buzz: And that must create a flood of data that you sort of have to go through in terms of consumer spending habits. It seems instinctual in a lot of ways because it helps you understand why people act this way. It's a about human behavior. Could you talk about that a little?
SQ: Well, I think this is the important thing. I've always been a behavioral economist, right? And so I focus things that way. I wanted to understand intent, and I think it's very important because as I mentioned we are creatures of habit. We definitely have a pattern in which we spend [and] in which we live our lives. We try to capture and understand that, but also capture it economically. That is very important because what am I really ultimately trying to do and what are we at Mastercard trying to do? We're trying to get the velocity of money accelerating because that helps the economy worldwide and gets people financially included. We feel abot that very strongly-- it's one of our big messages. We've committed to getting 500 million more people financially included worldwide by 2020.
The Buzz: Wow.
SQ: We've got 300 million. We've got 200 to go. These are the types of things that are very important [to us]. And the same thing occurs in the United States. If we get more people financially included...we understand if we capture more of these people traveling and therefore then that employs more people in that space, then thus far, and thus far. That is really the point of how to think about this. But it's data driven. If you're wasting your marketing dollars and doing sort of a broad shotgun approach, you're not going to target in and really get that lift to the behavior. The return of investment can be much higher if you actually know what people want to do.
The Buzz: Is that helped specifically by the fact that we can track absolutely everything we do online and that is what the companies do also?
SQ: I think it's helped by somewhat understanding data but also, how do you utilize it? So one of the companies we purchased last year's a company called APT. And what they do is “Test & Learn” software, so someone can go and test -- before they roll it out over 800 locations of their hotels – they can test it in 5 or 7 of them and mathematically measure [its impact in] that it's not a biased test. [It is a way to] really know, "Is this a lift? Will this add to my offering?" Right? Ahead of time. So I think it's really using data that way to sort of say, "Is this the right location? We've created a product that really focuses on the right location for a jewelry store or for a hotel or whatever. Will this actually attract enough people to actually justify this location versus another," for example?
The Buzz: Saying that, the one thing I thought was really neat towards the end of your keynote, you were talking about how everybody's using carry-on luggage. And we're all buying smaller and smaller things. But you want those exclusive things from “this place”, like say when you go overseas. When I been to Bangkok, you want to have just that unique thing that you can only get there, that nobody can find anywhere else. Can you talk about the balance of that kind of luxury good spending versus the luxury experience?
SQ: Right. So I think the key thing to understand is...I bought some beautiful silk scarves while I was in Thailand. Of course, one of the things they do quite well. But understanding that it's also -- it was a value for money purchase because I know that because they do it well, there's an enormous amount of competition. It was more, can I find the unique colors that work for me, right? As opposed to, I just need a silk scarf from Thailand, right? So it was [about] looking very carefully to understand, “Could I have a very high-quality one?” And that's the difference of how. So for me, it was a value for money purchase that I could say, "This is something I could do here." And I think that's the key thing. It's not saying that people will never buy a luxury good. But they'll say, "This is the one purse I've really wanted forever. And this is really special for me." I have a watch, for example. I forgot to wear it today (laughing). I didn't wear any watch this week. I forgot to put them on. But suffice it to say, the watch that I wear, even though I have multiple watches that have been given to me, is the one I bought with my very first paycheck. So it has the most emotional meaning to me, right?
The Buzz: Yes.
SQ: And I think that that's the key thing. We are now packaging our experiences that way. Why do we go back to a hotel chain, like the gentleman mentioned or anyone? Because we've had an experience that we want to replicate as we go around the world so we know that the quality's going to be there. And we're not necessarily going to try someplace new, all right? That's they key thing -- the loyalty for a hotel...it's much more about the actual experience we had at the hotel rather than the points. But we also want to share that experience with the next generation.
The Buzz: But in many of these destinations, it's also about that outdoor experience, which is whole other element we're not even talking about. Could you talk about that?
SQ: I think it's very important. Again, we want to experience in the reality and be there, present, right? And so that is an outdoor experience. It's also understanding the scarceness of the planet and the rare resources. And this is where, frankly, social media's been wonderful. Because we now all do -- rather than buying a huge picture book that sits on the coffee table, that nobody looks at, we now get pictures all day long on our phone from our friends and people we don't even know who are sharing an experience with a beautiful place. And that's the point. So again, it forces you, if you're in the business, to work even harder to create those experiences and reach people and really make certain that they're hitting your destination and landing page. These types of things and understanding is what is driving that spend. Because again, that's the key thing to appreciate. Because the economy's much better than everybody thinks, even globally.
The Buzz: But also we're looking at what the trends are. I mean, I came back from Qatar a couple weeks ago. And I flew from Beijing. Literally the whole electronics ban hit me right then. Would that make me hesitate or would that make other people hesitate to travel and do that spend? These are the things that we have to think about.
SQ: It actually does impact. And we've already seen an impact. I don't know if it was security-related or not but suffice to say it's economically having good impact (laughing). And myself, I didn't go back through Dubai the last trip. I went over up through Hong Kong and back when I came from Australia.
The Buzz: So that completely affects consumer spending?
SQ: Absolutely. And it is very important to recognize that consumers carry their laptops when they travel and not just business people. And I think that the people-- it had a wider impact than people thought it was going to have, for that very reason.
The Buzz: In your keynote, you were talking about sporting events, and that is an experience I think people will follow and go back year after year. Can you talk about the influence of that because that's sort of an outdoor element too.
SQ: I think it's huge.
The Buzz: And obviously, it's important to you too personally.
SQ: Well, not just important to me, but I think it's something we truly see behavior in. At Mastercard...we sponsor the Champion's League [in Europe], for example. And that's very important because we know that's a huge destination, a huge focus for people, and it fits in with being “priceless” as it is one match a year, right? We also sponsor the Australian Open and things like that. What it does is it creates an urgency to buy. See that's the interesting thing. If you think about it from the economic experience, it's saying, "It's on this date, so if I want to do it, I want to buy it for that date." But what's been done in advance is [that it has] already [been] pre-marketed to understand, "Do you watch this? Do you know the personalities? Have we made this personal enough for you?" And that we should see it. And that's the key thing to understanding, again, behavior. We can track who over-indexes on spending, not just on the actual events, but on the goods. In that case, there are team colors and things that people buy, But understand that the key thing is – and one of the great things about sporting events [is that it] creates an urgency, as opposed to just an experience So how do we create the urgency to get you to go?
The Buzz: Make it harder to get, right?
SQ: Right. Make it harder to get, Also maybe there's a rugby match going on that's only going to be there in Colesmoy at that exact time. It's about understanding that that's the uniqueness of it. And I think that's the key thing to appreciate. I think New York City's going to have to be a little cautious, in the sense that they had a ton of boutique hotels open, and there's the question of, "Are there too many?" And how are you going to not just boutique hotel hop when you go there and try each different one?
The Buzz: That's what I've been doing, actually.
SQ: Exactly. Right? And how are you going to create the loyalty so someone gets the returns, right? And not the last person on the agenda? That's going to be the challenge when you have entrants and things like that. So creating barriers to entry, which is one of the greatest things about, of course, as we know, our business. There's really only four players, right? But now we have new entrants all the time. That's why we partner with them. So we're partnering with Square and PayPal and all these people as opposed to letting them [dominate.
The Buzz: But then the consumer will switch over to the next new thing.
SQ: Yeah. We're a partner. Right.
The Buzz: My last question is, you're here, you're speaking with the industry and I like how you challenged them. That was really important. You said “You need to be doing more!” Could you talk about that? The importance of having that push/pull with the community and this specific industry.
SQ: I think it's very important. I think it's easy to become very complacent and say, "We've got this. We've got the experience. No one can come here." Well, no one, yes, can replicate Walt Disney World, right?
The Buzz: True.
SQ: But, again, we have every other place in the world we can go. This is what I try to say to department stores, "Your competition is not another department store. It's a restaurant. It's an experience." So, in other words, what are you doing to create an experience here? I think the key thing is that they must keep evolving but also just understand the way that consumers spend. They are much more informed. As I said, 85% of people use a mobile device while they're shopping and looking at other stores. So it is about understanding how am I reaching them? How am I curating? I use the word “my brand” specifically because I think it's very important to recognize “What's the distinction? What makes me unique?” That's the strength of small business spending we see around the world, not just in the US... that tells you that I'm willing to pay full price. I'm willing to pay whatever it is because you delivered [something] unique, personal, and something I want. So that fits my value for money. It's more about want than need, I think, at this point.
Tim Wassberg
A graduate of New York University's Tisch School Of The Arts with degrees in Film/TV Production & Film Criticism, Tim has written for magazines such as Moviemaker, Moving Pictures, Conde Nast Traveler UK and Casino Player. He enjoys traveling and distinct craft beers among other things.
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