How will your business address the enormous business opportunity that lies within the so-called “female economy?” Did you know that:
Women now drive the world economy.
As a market, women represent a bigger opportunity than China and India combined — more than twice as big.
On a global basis women control over $20 trillion in consumer spending each year, potentially growing to $28 trillion over the next 5 years.
These assertions were published in the September issue of the Harvard Business Review, based on a global study commissioned by the Boston Consulting Group in 2008. (For details refer to “The Female Economy,” Michael J. Silverstein & Kate Sayre, HBR, 9/2009. Or get a copy of Silverstein and Sayre’s book, Women Want More.)
Where Are the Biggest Opportunities
Based on purchasing power, American women represent the lion’s share of this opportunity, because we control or influence almost $6 trillion in consumer spending. Japanese women are the next largest segment, with power over $1.6 trillion in annual spending.
According to the HBR article and the BCG study, some of the largest near-term opportunities fall within the investments and financial advisory services sector, the life insurance business, and payments/rewards processing. Another area where women are hugely dissatisfied with current offerings is the healthcare sector.
The BCG study found that:
Financial services wins the prize as the industry least sympathetic to women
I must admit: that research finding does not come as a surprise to me…
Despite the enormous opportunity within the “female economy,” few companies have effective strategies to serve women’s needs and preferences. Many who try stumble at first, falling into the classic “make it pink” trap – a sure sign that the product planners are looking for superficial shortcuts or have under-invested in needs-based research.
Potential Root Causes
So if this opportunity is so huge, why do companies so often under-serve women? Here are some of my hypotheses:
- Ineffective segmentation when it comes to needs, attitudes, lifestyle drivers and purchasing power
- Not enough women in true leadership positions, exercising authentic control over the world’s largest enterprises
- Too many men driving product planning and targeting decisions – case in point: think about the fashion industry…
- Not enough intelligent or insight-seeking market research
- Not enough women with the courage or authority to dissuade their male colleagues from falling into the traditional “make it pink” trap
- Too much conventional thinking: “If it’s good enough for men, it works for women too”
In a future blog post, I’ll describe some of my recent experiences as a consumer where I’ve encountered situations of missed opportunities or female-dumb marketing.
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