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The rise over recent decades of female wealth and decision-making has had a major impact on purchasing trends and buying behaviours globally. Women are staying single for longer, having children later, and outliving men well into a financially secure old age. But has the recession caused a halt to the growing economic power of women, and should marketers revert to a man-size fits all approach?
This article forms part of our ‘Future watch’ series: comment pieces with even more of a slant on what will be. While all our trends pieces are about where we (consumers) are going, topics such as the burgeoning economic power of women really lend themselves to this future watch treatment.
Companies should take note of the increasing spending power of women globally, Goldman Sachs urge in a 2009 report. It argues women are the economic engine of the future, and notes that their spending tends to focus more on health, education and children’s well being, and that they tend to save more than men. Significant improvements in women’s status due to healthcare changes, fertility rates, education, legal protection and political involvement are contributing factors to the shift in economic power, says the report.
The report’s analysis is confirmed by a global study by the Boston Consulting Group, published in November 2009 under the title “Women Want More.” Women worldwide currently control £12.1 trillion in annual spending power, and the study predicts it could rise to around £17 trillion by 2014, as a new upwardly mobile class of young female professionals overtakes their male peers in wealth and status.
The rate of growth represents the world’s biggest emerging market. Companies who ignore this trend do so at the risk of alienating the planet’s most powerful spending bloc, warns one of the authors. Yet the study reveals women feel they are under served or even completely ignored by most companies, and its co-author says: “The current way companies appeal to women is to take a male product and paint it pink.”
Source: Euromonitor International from national statistics.
It’s a criticism backed up by research in the USA, where women control over 83% of all consumer purchases, making them the primary purchaser across nearly every industry. According to The Female Economy, a 2009 report by the Harvard Business Review, women feel “vastly under served” and “undervalued in the marketplace.” The study of over 12,000 women found that few companies are successfully responding to women’s needs for time saving solutions or products and services that match their specific needs.
Businesswomen and female leisure travellers are a lucrative market for hotels. To cater to this market, hotels, from New York to New Delhi, are adding women-only floors. They’re also offering rooms complete with feminine treats such as Aveda or Bulgari toiletries, plush robes and yoga mats, and serviced by an entirely female staff. It’s a market well worth pursuing, according to MaryBeth Bond, an author and expert on women’s travel: “With 67 million participants, the potential of the women’s market exceeds $19 trillion annually,” she says on her website The Gutsy Traveler.
And the “women only” trend isn’t just limited to hotels. Increasingly popular are women-only vacation packages, with everything from surfing lessons to creative arts classes on offer. According to a Forbes.com report, customers, 40% of whom are married, range from Midwest mothers and daughters to affluent businesswomen to “low income girls” from Los Angeles. And among Australians, incurable travellers, travel agencies note a 20% increase in inquiries about women-only tours, according to a January report by the Sydney Morning Herald.
Nearly 85% of all consumer electronic purchases are made by women, yet marketing strategies tend to be targeted at masculine tastes. US-based ChicBuds spotted a gap in the market and in 2006 launched a female-centric electronics brand. All its products have a feminine touch, such as Swarovski crystal-encrusted headphones and iPhone cases. And this year audio-electronics manufacturer Vestalife launched a range of earphones in three modish styles, as an alternative to the limited sporty designs currently available.
Meanwhile Hewlett-Packard is building on past successes. In 2008 it hired couture designer Vivienne Tam to design its HP Mini netbook, positioning it as a fashion accessory. Tam also created a clothing line marketed in conjunction with the laptop. Hewlett-Packard wanted to target discerning female technology consumers by employing something more original than just covering an existing PC in a hot pink plastic case.
The “clutch digital” had soft corners and a gleaming lacquer exterior decorated with Tam’s spring 2008 peony floral design. The marketing campaign focused on events and public relations instead of traditional advertising, and was sold at Macy’s, Neiman Marcus, and online, rather than at Best Buy. It was envisaged as a limited edition but demand, and output, pushed the run to special-edition status. The next Tam Mini, with a butterfly lovers theme, went on sale last November.
A similar strategy has been adopted by Samsung. In March it launched a female-targeted UK marketing campaign for the first in Samsung’s collection of fashion handsets, the Samsung Diva. Its distinctive quilted back cover is inspired by the world of fashion, and the campaign behind it has a high-end, glossy magazine vibe and a broad spectrum presence: print, online, social media, outdoor advertising, in-store and PR.
Part of the integrated campaign includes ‘gift with purchase’ retail promotions and in store advertising. To reinforce the handset’s fashion credentials, Samsung Diva has donned the mantle of title sponsor of the world’s largest modelling contest, Elite Model Look UK, reported Marketing Week in February 2010.
Console game publishers have also spotted an inroad into the female market, a demographic not traditionally drawn to their products in large numbers. Last year it launched a personalised fitness product for the Nintendo Wii, with women as a target audience.
Nintendo’s Wii Fit, and its balance board accessory, plays to women’s desire to stay trim. Other publishers are also surfing this particular Wii wave. At the end of 2008 THQ launched its All Star Cheer Squad, teaching cheerleading and dance moves using the balance board. Another publisher has announced plans for a pole dancing game. However, Celia Pearce, co-founder of the Ludica women’s game collective, says publishers can fall into the trap of seeing women as stereotypes, according to a report by UK newspaper the Financial Times.
It’s a theme taken up by other women commentators. Priya Ganapati, writing at Wired’s Gadget Lab, argues the “pink and sparkly” strategy is lazy, and so is wrapping a standard specification product in a designer label and selling it an at inflated price on the basis of its girly appeal. She says, “Real women want stylish products.
They want products that are fashionable, competitively priced and easy to use”. Dell computers “Della” website, launched in May 2009, also came under heavy criticism for being patronising and many women felt insulted. “Della” was dropped soon after.
The BCG survey highlighted the financial services sector as being the worst at meeting the needs of women. Worldwide, women from 40 regions said companies providing products such as internet banking, investment and insurance products and advice were totally out of touch with female consumers.
Yet attempts are being made to remedy the situation. With their tagline “The men don’t get it”, Chinese United Overseas Bank Lady Cards are offered exclusively to women. The standard and platinum credit cards carry an annual fee and eligibility criteria include a minimum income requirement.
The cards offer members exclusive female-friendly health and beauty perks, such as complimentary access to fitness classes, Air Miles rewards, and discounts on beauty services, travel, restaurants and shops. In the same mould is “Shine Club”, launched in 2007 by Lebanon’s Bank Audi, and also targeted at a female audience. Its MasterCard features a mirror, and loyalty points collected on use of the card can be redeemed for female-focused products. Other benefits of the programme include discounts at affiliated spas, health retreats, entertainment and fashion outlets across Lebanon.
And last year RBS Coutts launched a new initiative tailored to high net worth (HNW) women in Asia; the first specifically female-oriented banking service in the region. It comes after a study by the Centre for Economic Business Research estimated that 53% of millionaires are likely to be female by 2020. According to another study commissioned by RBS Coutts in 2008, the current penetration of the HNW woman segment, with investable assets of more than US$1m, by professional wealth managers is low.
The study shows there’s a large untapped market, potentially worth approximately US$55bn in Singapore and US$112bn in Hong Kong. Hong Kong has more than double the number of HNW women compared with Singapore. The head of RBS Coutts North Asia private banking, quoted by Wealth_bulletin.com, said: “Our study shows that high net worth women expect product offerings to be no different from those offered to their male counterparts, but they demand the approach in servicing them to be tailored to the needs of women. What this suggests, is that they wish to be treated like a man but spoken to like a woman.”
They’re also concerned about health issues. According to IMS, a leading healthcare market-intelligence consultancy, the women’s healthcare market exceeded US$16.5 billion worldwide in 2007 and this figure is poised to grow to $27.3 billion in 2019. And the Middle East is an increasingly attractive market. In 2008 62% of visitors to the Women’s Healthcare exhibition, held annually in Dubai, were 30 years or older, 85% were privately insured and 49% were married with children, according to Albawaba.com, the Middle East information, media and technology group.
Older female “empty-nesters” are also a demographic that shouldn’t be overlooked, as they typically have more disposable income and savings than their younger sisters. Spotting a gap in the market, last year Seattle-based Beveragette Ventures LLC added an extra product to their line of GEM functional beverages. “Keep it Cool” is designed to alleviate the symptoms of the menopause, such as the intensity and frequency of hot flushes. And the same year, food producer Danone launched a yogurt in Spain especially designed for women. It contains twice as much calcium as traditional yogurt, along with vitamin D to help calcium absorption. The brand has positioned the product as an aid in helping middle-aged women prevent osteoporosis.
Women with children at home use more social media, including Facebook, Twitter and blogs, than average US adults, according to a 2009 survey by the Retail Advertising and Marketing Association (RAMA), conducted by BIGresearch. It revealed that stay-at-home mothers are more likely to use Facebook (60.3 %), My-Space (42.4 %) and Twitter (16.5 %) than average adults (50.2%, 34.4% and 15% respectively).
A significant 15.3% of mothers also maintain their own blog. “Retailers that aren’t engaging customers through social media could be missing the boat,” said the executive director of RAMA. “Twitter, Facebook and blogs are becoming increasingly popular with moms as they search for coupons or deals, and keep in touch with loved ones.” Today, positive word-of-mouth often means positive words that are posted or tweeted, and can reach thousands of other likely customers in seconds. Mothers frequently use social media to share experiences and information, with 93.6% of those surveyed admitting they regularly or occasionally seek the advice of others before buying a service or product, and 97.2% saying they give advice to others about products or services they’ve purchased.
The future is female. Higher female earners in the developed world, coupled with growing female employment participation in poorer countries, is the reason that women’s earned income is growing at 8.1 % versus 5.8 % for men.
The financial crisis has widened this gap, by hitting male jobs hardest. But the rise of female earning power is a deeper shift that has gone hand-in-hand with the other economic megatrend of our era: the advancement of emerging markets, according to Newsweek magazine.
And as Goldman Sach’s report makes clear, improving gender equality has coincided with the rapid growth of the global middle class. From about 1.7 billion people today, this middle class is expected to more than double by 2030, and 85% of the newly wealthy will live in the world’s major developing nations.
The differing focuses in spending between men and women have important implications for businesses. Goldman Sachs estimates, for example, that more male-oriented product categories like alcohol and tobacco may show slower growth rates than areas like consumer durables, food, health care, and child care, all the areas women spend their money on.
While the female propensity to save may fuel growth of banking services in countries such as India. And the vast unmet desire among Western women for simpler, understandable financial products and services could also help make retail investing more accessible and transparent. Analysts say companies that already have a strong presence in the women’s market stand to prosper further from the female consumer boom.