Globally, they control
about $20 trillion in annual consumer spending, and that figure could rise to
$28 trillion in the next five years. His total annual earnings of $13 billion
could reach $18 billion during the same period. Overall, women represent a
larger growth market than China and India combined; in fact, more than double.
Given these numbers, it would be foolish to ignore or underestimate the female
consumer. Still, plenty of companies do just that, even those that are
confident they have a winning strategy when it comes to women.
Consider Dell's
short-lived effort to market laptops specifically to women. The company fell
into the classic "make it pink" mentality with the launch of the
Della della website in May 2009. The site featured colors, computer
accessories, and tips for counting calories and finding recipes. It created
quite a stir among women, who described it as "elegant but
disconcerting" and "patronizing". The blogosphere was quick to
react to the company's "very special site for women." Austin Modine
of the online tech publication The Register responded bitterly: “If you thought
buying computers was a gender-neutral business, then you've obviously got an
acute case of female hysteria. (Nine out of ten Victorian doctors agree.) The
New York Times said that Dell had to go to "hard marketing school."
Within weeks of launching, the company changed the site's name and focus.
"You talked, we listened," Dell told users. Kudos to Dell for quickly
correcting course, but why didn't its marketers pick up on the potentially
awkward positioning before launch?
Most companies have a
lot to learn about selling to women. In 2008, the Boston Consulting Group
conducted a comprehensive study of how women felt about their jobs and lives
and how companies have served them. It turned out that there was a lot of room
for improvement. More than 12,000 women, from more than 40 geographies and a
variety of income levels and lifestyles, responded to our survey. They
answered, often with disarming candor, 120 questions about their education and
finances, home and possessions, jobs and careers, activities and interests,
relationships, hopes and fears, along with their buying behavior and spending
patterns in about three dozens of categories of goods. and services. (You can
learn more about the survey and get an abridged version at
www.womenspeakworldwide.com). We have also conducted hundreds of interviews and
studied women working in 50 organizations in 13 fields of activity.
This is what we found,
in short: women feel very abandoned. Despite the substantial gains in market
power and status they have achieved over the past century, they still appear to
be undervalued in the marketplace and in the workplace. They have too many time
requirements and are constantly juggling conflicting priorities: work, home,
and family. Few companies have met their need for time-saving solutions or
products and services designed specifically for them.
It's still hard for
women to find a pair of pants, buy a healthy meal, get financial advice without
feeling patronized, or find time to keep fit. Although women control spending
in most consumer goods categories, too many companies act as if they have no
say in purchasing decisions. Companies continue to offer them ill-conceived
products and services and outdated marketing narratives that promote female
stereotypes. Look at the auto industry. Cars are designed for speed, not
utility, which is what women really care about. No SUV is built to accommodate
a mother who needs to take two young children with her. Or consider a recent ad
for Bounty paper towels, in which a husband and son watch a spill of water
cross the room, until Mom arrives and gleefully cleans up the mess.
Meanwhile, women are
gaining more and more influence in the world of work. As of this writing, the
number of working women in the United States is about to surpass the number of
working men. Three-quarters of the people who have lost their jobs in the
current recession are men. To be fair, women are still paid less than men on
average and are more likely to work part-time, factors that
Where are the
opportunities
Each person's story is
different, but looking for patterns in our findings, we identified six main
page types from respondents. These types, defined in particular by income, age,
and life stage, are swift, quick, relationship-oriented, self-sufficient,
nesting, and subsistence. Few women belong to just one type. For example,
married children who return quickly are likely to fall into the category of
instant kitchen chains at some point in their life. (See the exhibition
"Six Major Segments of the Female Consumer.")
Despite its
limitations, such segmentation is useful for developing and marketing corporate
offerings. Knowing who you are targeting and what you are looking for in the
market can be a huge benefit.
Women decide to buy
94% of home furniture ... 92% on vacation ... 91% of homes ... 60% of cars ...
51% of consumer electronics
It would be wise for
any business to target female customers, but the biggest potential lies in six
industries. There are four companies where women are most likely to spend or
trade money: food, fitness, beauty, and clothing. The other two are companies
with which women have expressed their dissatisfaction very clearly: financial
services and healthcare.
Food is one of the
biggest options. Women are responsible for the lion's share of food shopping
and preparation. Food is also one of the most important budget items for the
consumer, which can be adjusted but can never be left out.
The favorite grocery
stores of the women surveyed were Whole Foods and Tesco. Although segments as
diverse as the two channels, they each have a loyal following. Despite the high
prices, Whole Foods has managed to appeal to discerning (but efficient)
fast-food enthusiasts who want quality meat and produce and professional staff.
Tesco stores, which offer a wide range of homewares from one location,
including books, furniture and financial services, appeal to time-limited
pressure cookers who seek practicality.
Fitness is also a big
deal. In the United States alone, the health food market has grown at 6-9% per
year and is worth around $10 billion, while the global market is around $20
billion. The health club industry in the United States generates approximately
$14 billion in revenue annually.
About two-thirds of
respondents described themselves as overweight; what was until recently an
American problem has become a global phenomenon. But while women say their
fitness is a priority, it actually tends to take a back seat. When asked to
prioritize the needs of their spouse, children, parents, and themselves, almost
all women ranked their needs second or third, meaning they had hard to find
time to train.
The challenge for
companies is to make fitness more accessible to women. For example, most spas
are expensive and designed for men. They may look like nightclubs rather than
sports centers and are aimed at bodybuilders. In general, women are less
interested in gaining weight and more interested in losing a few pounds,
improving their cardiovascular health and increasing their tone. Bright lights,
electronic music, sweaty men and fancy equipment are often turned off.
The Curves training
channel recognized and responded to women's concerns and quickly grew
accordingly. Curves has a very simple concept: a cheap and fast workout for
women only with simple rooms suitable for middle-aged clients of average build.
Assistants are ready to guide them through a simple 30-minute journey, so
there's no need to hire a coach.
Beauty products and
services promote the emotional well-being of women. The people we spoke to who
spent most of their income on cosmetics felt more fulfilled, more successful,
and more powerful; they also reported lower stress levels, even though they
worked longer.
But even so, women are
fundamentally dissatisfied with the beauty business and the development of the
industry prevents them from spending as much as they could. First, there are
too many choices; it's the domain of men, where men think what women want and
where products come and go at a rapid pace. Women are passionate about the
industry and are well represented in primary jobs, but female employment is
declining among managers and executives. A good first step towards gaining
market share might be to guide more women to help them make important decisions
and provide information on what customers like and dislike.
Many successful
companies in the beauty industry have used creative technologies in creative
ways to satisfy women's desire to look younger. For example, facial skin care
products have reached $20 billion worldwide. Where once the shelves were lined
with products whose sole purpose was to moisturize the skin, now there are compositions
that contain various benefits, such as sun protection, skin firming and hair
strengthening, all at preventive or at least concealment purposes. , aging.
At the top of the line
is La Prairie Cellular Cream Platinum Rare, an anti-aging moisturizer in
Switzerland that retails for $1,000 for 1.7 ounces. The cream contains platinum
residue, which the company says "charges the skin's electrical balance and
protects the skin's DNA." Despite the price, customers lined up in luxury
stores to buy a jar when the cream was launched in 2008.
At the other end of
the range, the Olay brand from Procter & Gamble is available in drugstores.
It has evolved from a single low quality product with a simple purpose
(moisturizing) used by about 2% of the population, to many premium products
with many applications.
Apparel—including
accessories and shoes—is a $47 billion global industry with plenty of room for
improvement, primarily when it comes to fit and affordability.
Most women are not a
perfect size 6, and they don’t like to be reminded of it every time they shop.
Trying on clothes is often an exercise in frustration that just reinforces
women’s negative body images. Banana Republic, a favorite retailer of the women
in our survey, has won a loyal following by taking steps to solve the problem
of fit, particularly for pants. It offers a variety of cuts to suit different
figures, and sizes are consistent across the board. Once you discover your “fit
block” (the chain’s technical term for body type), you can buy multiple pairs
of pants, even online, quickly and dependably. Banana Republic has become Gap’s
most profitable brand, the only one that’s grown over the past five years.
By contrast, Express stores focused on style and color but failed to deliver a consistent fit. Women might try on four garments marked “size 8” that actually varied in size from 6 to 12. The chain’s sales began to lag so much that its parent company, Limited Brands, ended up exiting the fashion apparel business; it sold Express to a private equity group in 2007.
The costliness of
clothing was another sore point for the women in our survey. That explains why
respondents also favored Sweden-based H&M. Its stores offer inexpensive,
fun, trendy clothes and, with a rapid turnover of stock, an element of surprise
each time shoppers visit. Women value the ability to buy a new outfit without
breaking the bank. Perhaps contributing to H&M’s success is the fact that
nearly 80% of the company’s employees, 77% of store managers, and 44% of
country managers are women. So are seven of the 11 board members.
Few of the women we
talked to during the course of our research actually needed new clothing. Most
could get away with shopping once or twice a year just to replenish the basics.
But given that women say they are willing to spend extra to find clothing that
really works for them, manufacturers and retailers can find plenty of untapped
potential in the apparel market—if they listen carefully to what women want,
seek new technologies that offer superior fabrication and color, and improve
comfort and fit.
Financial services
wins the prize as the industry least sympathetic to women—and one in which
companies stand to gain the most if they can change their approach.
Despite setbacks in
the economy, private wealth in the United States is expected to grow from some
$14 trillion today to $22 trillion by 2020, and 50% of it will be in the hands
of women. Yet women are still continually let down by the level of quality and
service they get from financial companies, which presume men to be their target
customers.
Our survey respondents
were scathing in their comments about financial institutions. They cited a lack
of respect, poor advice, contradictory policies, one-size-fits-all forms, and a
seemingly endless tangle of red tape that leaves them exhausted and annoyed.
Consider just a few quotations from our interviews:
• “I hate being
stereotyped because of my gender and age, and I don’t appreciate being treated
like an infant.”
• “As a single woman,
I often feel that financial services institutions aren’t looking for my
business.”
• “Financial service
reps talk down to women as if we cannot understand more than just the basics.”
• “I’m earning close
to $1 million a year and should retire with $20 million plus in assets, so I’m
not right for a cookie cutter discount broker, nor qualified for high-end
wealth management services.”
An unhappy customer
with $20 million plus to invest represents a golden opportunity. Overall, the
markets for investment services and life insurance for women are wide open.
(For three of the largest opportunities, see the exhibit “Financial Categories
Where Untapped Sales to Women Are Worth Trillions.”)
Financial Categories
Where Untapped Sales to Women Are Worth Trillions
Extraordinary amounts
of money are up for grabs in the financial services business. The most
lucrative ...
Health care was a
source of frustration for women in our survey—and for middle-aged respondents
in particular. Women resoundingly reported dissatisfaction with their hospitals
and doctors. When polled about the service provided by their general
practitioners and specialists, more than 60% of them said those doctors could
do “somewhat better” or “significantly better.” Seventy-one percent of women
aged 30 to 49 were dissatisfied with general practitioners, and 68% of that
group were dissatisfied with specialists. More specifically, they were
irritated by the amount of time they spent waiting for doctors and lab results,
and scheduling and keeping appointments for themselves and their families.
Making matters worse, women generally pay significantly more than men do for
health insurance.
Again, the
opportunities for companies that do cater to women are enormous. Johnson &
Johnson, though not a health care services provider, was almost invariably
represented (in the form of oral contraception, baby care, bandages, and other
products) when we peeked into our respondents’ medicine cabinets. The company
spends 4% of its sales on consumer research and development—more than twice the
industry average—and thus in all likelihood has a better understanding of its
female customers than most companies in its space do. For instance, because
mothers of young children are one of its important customer groups, the company
conducted a clinical study in partnership with a pediatric sleep expert at the
Children’s Hospital of Philadelphia. Together, they developed a three-step
routine to help babies sleep better, consisting of bath, massage, and quiet time.
J&J then launched a line of products to complement the routine—with the
results of the clinical study to boost their credibility.
Overburdened and
Overwhelmed
Considering how often
the issue of time—and not enough of it—came up in our survey and our interviews,
offering easier and more convenient ways to make purchases would create a clear
advantage in all the industries we’ve discussed. We’ve seen that women don’t
make enough time for themselves. They are still far more burdened than men by
household tasks; according to our survey, about one-third of men don’t help
their spouse or partner with chores. In Japan women receive the least support,
with 74% getting little or no help from their spouses. At the opposite extreme,
71% of Indian husbands pitch in on household chores.
Our research also
showed that pressures change over time. Women are happiest in their early and
later years and experience their lowest point in their early and mid forties.
That’s when they face the greatest challenges in managing work and home, and
must deal with caring for both children and aging parents. So this group is
especially receptive to products and services that can help them better control
their lives and balance their priorities.
A Future of Parity,
Power, and Influence
When the dust from the
economic crisis settles, we predict, women will occupy an even more important
position in the economy and the world order than they now do. What might that
economy look like? In some ways it will be characterized by the same trends we’ve
seen over the past five decades. For one thing, women will represent an
ever-larger proportion of the workforce. The number of working women has been
increasing by about 2.2% a year. We expect an additional 90 million or so women
to enter the workforce by 2013, perhaps even more as employment becomes a
necessity. At nearly every major consumer company, most middle managers are
women. It’s only a matter of time before they rise to more-senior positions.
Already, women own 40% of the businesses in the United States, and their
businesses are growing at twice the rate of U.S. firms as a whole. (Admittedly,
the numbers are being skewed as small businesses position themselves for
government contracts that favor female-owned companies.) Women will also continue
to struggle with work/life balance, conflicting demands, and too little time.
Once companies wake up
to the potential of the female economy, they will find a whole new range of
commercial opportunities in women’s social concerns. Women seek to buy products
and services from companies that do good for the world, especially for other women.
Brands that—directly or indirectly—promote physical and emotional well-being,
protect and preserve the environment, provide education and care for the needy,
and encourage love and connection will benefit.
And women are the
customer. There’s no reason they should settle for products that ignore or fail
to fully meet their needs, or that do so cynically or superficially. Women will
increasingly resist being stereotyped, segmented only by age or income, lumped
together into an “all women” characterization, or, worse, undifferentiated from
men.
The financial crisis
will come to an end, and now is the time to lay the foundation for
postrecession growth. A focus on women as a target market—instead of on any
geographical market—will up a company’s odds of success when the recovery
begins. Understanding and meeting women’s needs will be essential to rebuilding
the economy; therein lies the key to breakout growth, loyalty, and market
share.
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