A massive power shift in consumer spending is taking place worldwide. It’s a quiet revolution bigger than the rising global buying power of the emerging BRIC nations—Brazil, Russia, India and China. It controls $20 trillion in consumer spending around the world, and that figure is growing annually. What is this economic force that is changing spending habits around the world? The answer, according to a worldwide study by the Boston Consulting Group, is women.
One billion women work around the globe today, and the trillions they control in the marketplace are a bigger amount than any governmental economic stimulus package or bailout.
Women make spending decisions for more dollars than most governments worldwide. And the numbers are only getting bigger. BCG found that half of all university students today are women, that females control half the wealth in the United States, and that the number of women in positions of corporate leadership is increasing in leaps and bounds.
What does this mean for the marketplace? It means that in order to effectively create and sell future products, companies must understand the wants and needs of the female consumer. More than that, as women continue to take leadership positions, companies will shift the way they do business from the inside out—from policies to hiring practices.
“The rise of the worldwide female economy will challenge assumptions about how companies do research, how they develop products, how they sell and merchandise, and how they add services to their value proposition,” BCG partners and managing directors Michael Silverstein and Kate Sayre say in their recent book Women Want More. “Companies must rethink how they segment their audiences, how they react to changes in consumers’ behavior, and how they capture the imagination.
“Further, the female economy will challenge corporate leaders and managers to reexamine their human resources practices—how they recruit, select, develop, integrate, retain, and provide support to their people and how they help nurture and facilitate a healthy work-life balance.”
Top Categories with Potential for Big Growth
In addition to these success factors, the BCG study points out several categories that they predict will grow worldwide as the shift to a female economy continues to occur. These include financial services, healthcare, apparel, beauty, fitness, and food. While financial services and healthcare are already two hot-button topics across the marketplace (male and female), the other categories are just as important, even if they haven’t made as many headlines.
Financial Services
Women take care of the household finances in many instances, and they desire products that make it easier, more understandable, and less time-consuming. Women tend to pay more for insurance than men and have retirement benefits and salaries and wages that are generally less than those of men.
Healthcare and Fitness
Women desire more contact with their providers and less complicated interactions, although they like their doctors overall. On the fitness side, women want to be healthy and fit but do not work out just for the sake of working out.
Apparel and Beauty
These two categories stand out among the rest, because they are the only two where women focus on themselves. Women want products that are comfortable, provide a natural look, and clothes and beauty products that make them look and feel good.
Food
This is a category with many possibilities, as women are still responsible for the majority of family meals and want healthy choices that take little time for preparation, cooking and cleanup. They need the shopping experience to be affordable and simplified. As with many of the other categories, they need to save time.
Women Today: Who They Are and What They Want
As companies develop products with women in mind, then need to know their customers well. Today’s female consumer is more educated and affluent than ever before. She has influence and spending power. She is also overworked and time-starved. She balances work outside the home with full-time work in the home. She wants more balance but almost never feels like she achieves it. She desires love and relationship harmony. Women build their lives around connections, love, and relationships. They are hopeful and optimistic, and believe that life will be better for them in five years than it is today.
With all these attributes, what do women want from their products? To sum it up in just a few words, women want their products to give them more time, value and a better life.
Time is a woman’s most valuable commodity. Any product that will free up a few minutes in her day, as long as it provides good quality and value, is likely to be a winner. Women overall no longer have time to deep clean their homes or spend hours weekly in the grocery store. Twenty minutes between work and picking up the kids, fifteen minutes during lunch break, a precious hour or two on the weekends is all a busy woman has to give to shopping and household maintenance. Any company that helps women fit a big chore into a manageable time slot of 45 minutes or less, whether it’s a workout (a major factor in the success of the Curves fitness chain) or shopping for groceries for the week, may be a winner.
“Good products act as agents that enable women to make the most of time, regain more of it, and spend it as they want to, rather than as they have to,” Silverstein and Sayre say. “Products that require them to spend time in ways they don’t want, or see as unnecessary, are villains.”
While women want to gain back time, they also want a good deal. Women know value. They know when they feel “ripped off,” and nothing will kill a brand faster than women who feel cheated or sold cheap goods under the guise of something better. Women studied said they will pay more for better products and services in the following categories: food, personal clothing, facial skincare, house or apartment, cosmetic surgery, shoes (not athletic), restaurants, bedding, perfume and furniture.
When women find companies that provide quality items that help lessen their stress levels by saving them time or making them feel good about themselves, they latch onto these companies and their products and don’t let go. Once a product helps make their lives better, women also spread the word. They talk with other women about the great deals they have found, and they warn friends away from companies that have alienated them.
The successful company of the future will get to know—and understand—the women they serve. They will cater to feelings and relationships, and seek to build connections with women. With trillions of dollars in buying power on the line, getting in touch with female emotions is a small price to pay.
The Four R’s: Keys to Capturing the Female Market
What does this mean for businesses? It means that the sooner they start to recognize the power women will have over their success or failure, the sooner they can start reaching out to the female consumer and make their company soar. BCG found that some companies are already doing this well, and cite Gerber, Banana Republic and Harpo as a few corporations that “get women and serve them well.”
How do they do it? Silverstein and Sayre found that these companies and others that win women’s loyalty have an exceptional level of dominance in their category because they practice what the authors have labeled the four R’s:
Recognize. These companies already know what factor women play in their overall success. Because they recognize this, they commit to figuring out what the best opportunities are for them.
Research. Successful companies in the female economy study products to understand how and where they are consumed. They pay close attention to women’s habits, how women become dissatisfied, how often they use a product, and the time it takes to use a product.
Respond. Companies capturing female loyalty put their research to good use, identifying the good and bad products they offer, then taking action to make good products even better and eliminate what isn’t working.
Refine. Companies ahead in the race to win women’s loyalty build relationships with female consumers. They provide more than a shopping experience; they build bridges and seek to strengthen ties at every opportunity.
Natalie Nichols Gillespie, former Editorial Director for WEALTH magazine, is a freelance writer based in the Tampa Bay area. This material was adapted from Women Want More by Michael J. Silverstein and Kate Sayre, The Boston Consulting Group. HarperCollins Publishers, 2009. Visit www.bcg.com/womenwantmore. For those wishing to take the survey, it’s at www.womenspeakworldwide.com.
Tags: consumer spending, female consumers, health, marketing, retailers, women shoppers, working women