The rise in spending power by women, the largest market opportunity

We know women represent half of the population and half of the work force. But they represent 85% of consumer buying decisions–$7 trillion in consumer and business spending.  Women are considered the largest market opportunity in the world, controlling $20 trillion in annual consumer spending globally. In the next five years, the number is expected to rise to $30 trillion (sources: Fona international and Forbes).

Cultural stereotypes assumes women handle the bulk of purchases in grocery items and household goods. And sure, 93% of food purchases are made by women. But did you know women also control purchases of 90% of new homes, 92% of vacations, 93% of pharmaceuticals? Women also control 89% of bank accounts, 80% of healthcare, 68% of new cars and 66% of computers.  And the kicker: women also purchase 50% of products marketed to men. They even stay in the loop of everything you need to know about USDA home loans.

The rise in spending power by women is clearly attributed to more control and power women feel in all aspects of their lives….from working outside of home, to earning more… and in 22% of households, out-earning their male counterparts (according to Census)…and most of all through education which has brought women greater influence, skills and self-confidence. Between 1970-2004, the percent of women 25-54 with college degrees tripled. Today, for every 2 men graduating from college, 3 women are and with better GPAs.

Women in the US should be considered the true economic engine:

• Women own 40% of all privately held companies

• 1 out of 5 companies with $1m+ revenues is owned by women

• Women led companies will account for $5.9m new US jobs by 2018

• 70% of new businesses are started by women

• 3 million women earn salaries over $100,000, and 60% of all personal wealth in the US is held by women.

• (Sources: Fona International, Pew and Bureau of Labor Statistics)

I read and review all these stats, and then scratch my head wondering why we still use the term “working women” and not working men? Men work. Women work. I still wonder why all daytime ads portray women as housewives and men completely incapable of doing any house chores. Why aren’t we seeing these roles in branding and advertising? We’re starting to see pop culture in movies and TV shows keeping up with these rapid gender cultural shifts….but why not advertisers and marketers?

Smart Design, a company focusing on female consumers, reported that companies flounder when they interpret women as smaller, softer humans….

• 91% of women say advertisers don’t understand them

• 66% of women feel misunderstood by healthcare marketers (women control 80% of healthcare purchases)

• 59% of women feel misunderstood by food marketers (women make 93% of food purchase decisions)

Is this because majority of creative directors and ad agency leaders are still men?

Let me put this in perspective, by not mentioning the word “women” at all:  what if you could enlist your largest, most powerful target audience to help you solve your most critical problem? And what if that particular audience didn’t only number in billions, but was also industrious, educated, family oriented, entrepreneurial, trust-worthy, civic-minded and committed? Would you pay attention to that target customers’ needs and values, then?

Couple of years ago, I wrote an article, Do you know the underlying needs and values to address women effectively? And 10 questions to ask your strategy team. I acknowledged then, and still do, that there is still a big gender gap in pay and salary negotiations…but women are increasingly feeling empowered, independent, knowledgeable and successful. In that post, you will find several research studies on how men and women view financial responsibilities differently, and key generational differences among women. I think you’ll find the article and the findings very interesting. But from my perspective, the 10 key questions to ask your strategy team still remains very relevant today:

• Have we re-evaluated our core target to primarily include women ?

• Have we defined which women, which needs and at what relative price?

• Does our Value Proposition(s) identify and align with evolving needs and values?

• How do we differentiate from competition?  Is this clearly being communicated?

• Do we know which one of our products/services is “her decision” alone, and which ones are joint with her partner?  Are we communicating accordingly?

• Are we enhancing “her experience”?  If so, how are we communicating this?

• Does she consider us “affordable” relative to competition?  (Note:  affordable is not the same as cheap)

• Are we avoiding gender biases and stereotypes in our communication strategies?

• Have we identified the sweet spot of commonalities cross-generationally?

• Are we recognizing and acknowledging The New World Modern Woman?

If you can answer these questions with your strategy team, I think you are ready to address and attract the largest, most powerful, most profitable target customer in the world.