American Express 2002 Annual Report Download - page 14

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enable us to benefit from the world-class expertise of
our partner while substantially lowering costs. Another
example is the expansion of our global servicing net-
work by accessing customer service capabilities and
educated workforces around the world. For example,
last year we opened a new customer service center in
India as a complement to our existing network. Broad-
ening our worldwide network enables us to improve
both the cost and quality of our overall servicing
infrastructure, expand our capacity and increase our
flexibility to meet the needs of our growing business.
Diversification of Card Spending Base
We also strengthened our business models through
continued efforts to diversify card spending and lower
our reliance on the travel and entertainment sector.
Historically, about two-thirds of spending on American
Express cards worldwide came from travel and
entertainment and one-third from non T& E sources.
We have now essentially reversed that mix. In 2002,
approximately 63 percent of our billings came from
retail and other non-T&E sources, and 37 percent
came from T&E.
This fundamental shift is primarily due to our ongoing
efforts to encourage consumers to use American
Express as their card of choice for everyday spending
at establishments such as supermarkets, gas stations,
drug stores and home improvement stores. We con-
tinue to increase the range of merchants in retail and
everyday spending categories who accept the Card.
In 2002, we added a variety of key merchants in the
United States including The Stop & Shop Supermarket
Company, Dairy Queen, Time Warner Cable and
H& R Block. In international markets, we added a
broad array of merchants including Mayne Group
Limited-Pharmacy Services in Australia; Canadian
Tire; CORA Hypermarkets in France; Arkio in
Mexico; and NTT DoCoMo, a telecommunications
provider in Japan. Along with expanding merchant
coverage, we also launched new card products and
promotions to build spending in retail and everyday
locations.
I12 AXPI
INVESTM
WE ARE STRONGER IN THE MARKETPLACE, AS WE INCREASED OUR