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Analyst’s Take: Credit Cards as Lifelines, Consumers Revealed

credit cardLooking for some good news on traditional retail? Sorry, I don’t have any for you. Instead I’m going to pile onto this week’s earnings reports from the department stores. Here is a scary article about traditional retailers’ reliance on credit cards. While many disclose their reliance on credit card revenues, the article has several revelations. For instance, “at Bloomingdale’s, the company’s proposal to increase the credit card enrollment was a sticking point in recent contract negotiations, according to the Retail, Wholesale and Department Store Union. A company spokeswoman, Cheryl Heinonen, said credit card enrollments are only one aspect of how employees are evaluated, but declined to discuss the confidential negotiations.” More good times ahead!

Separately, The New York Review of Books has a review of Empire of Things: How We Became a World of Consumers, from the Fifteenth Century to the Twenty-First by Frank Trentmann, an 880 page (700 of text) book that I doubt I will ever get to. The review itself is a lot shorter, and while a touch dense, it’s really interesting, and challenges a lot of common wisdom about consumption, notably the notion that variations by country are rooted in deep underlying cultural differences. The review is largely a summary of the book – here’s a passage that is kind of a summary of the summary:

“How did we come to be such voracious, irrepressible consumers? And how has all of this consuming changed the world? Those are the questions at the heart of Frank Trentmann’s Empire of Things, a more-is-more sort of book, each of its nearly seven hundred pages of text jam-packed with telling facts and counterintuitive provocations. Trentmann deals with five hundred-plus years of history, from the Renaissance city-states, with their tastes for gilded goblets and Oriental silks, to present-day China, where state capitalism has proven that liberalism is no requirement for booming consumerism. It’s a book about material objects (such as a department store window featuring a model of St. Paul’s Cathedral composed entirely of hankies), but even more, about all of the consumption that cannot be so readily seen—unspectacular, everyday acts such as changing your underpants daily (only 5 percent of German men did so in 1966).”

Faye Landes, co-founder and general partner of Back to the Future Ventures, advises emerging consumer and retail companies on strategy, branding and fundraising. She was one of Wall Street’s leading consumer and retail analysts for over 20 years and was widely recognized for her ability to anticipate sweeping trends, such as the widespread adoption of activewear. She has frequently appeared on CNBC, Bloomberg TV and other media outlets and has presented at industry conferences all over the world. Read her “Analyst’s Take” column here weekly. Contact her at faye@backtothefutureventures.com.

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