Women: The World’s Biggest Untapped Market

November 10, 2009

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.

Over $20 tril­lion in con­sumer spend­ing annually

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

Confident-Woman

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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