by Delphi Cleaveland
March 26, 2020
If the consumer market had a sex, it would be female. Women today are the world’s most powerful consumers and their prowess in the consumer market ecosystem is only expected to grow over the next decade. This is due to higher workforce participation, higher brand influence, and growing numbers of women in market leadership positions. It is in businesses’ best interest to address their needs.
Women control roughly $20 trillion in annual consumer spending and this figure is expected to increase by up to 40 percent in the next five years. This trend is largely the result of female-powered households, in which women are responsible for between 70 and 80 percent of all consumer purchases — accounting for themselves, their partners, their children, and other miscellaneous household needs. A study published by Harvard Business Review determined that on average women make 94 percent of home furnishing decisions, 92 percent in vacations, 91 percent in homes, 60 percent in automobiles and 51 percent in consumer electronics.
One study conducted by the European Commission, focusing solely on online shopping found that across six categories of consumption — clothes and sporting goods, electronics, film and music, homegoods, travel and holiday accommodations, and tickets for events — women made marginally more purchases than men across the board.
Even so, companies continue to overlook the particular needs and lifestyles of women, representing a missed opportunity. Cars, for example, are designed for speed, not utility, with airbags that accommodate the average 250 lb. man, but often result in injury when deployed for women and children. Voice controlled gadgets — like Siri and Alexa — feature women’s voices, further reflecting the androcentric nature of consumer product development. Even progressive-thinking companies like Apple, Fitbit, and Nike have failed to include period trackers until recently in their products, despite half of their target customer base relying on such insight in their health and wellness routines.
When feminists first through the gauntlet in the direction of big consumer companies, many responded by gender washing their products to meet the demands of the female consumer. This method, also referred to as the “shrinking” and “pinking” of a company’s products to fit the female buyer, has rarely yielded positive results. Take Dell’s attempt to suit the female consumer. When the company launched its “Della” website in 2009, the new platform was vibrantly colored and featured a multitude of computer accessories, including recipe and calorie counting apps reminiscent of 1950s-style housewife archetypes. When surveyed, women expressed outrage at the site, calling it “condescending” and “disconcerting.” Shortly thereafter the site was taken down.
So, what is the key to unlocking the bounty of women’s consumption? The answer is ironically similar to the logic driving their omission in advertising and consumer production. Stereotypes characterize women as domestic queens — tasked with cooking, cleaning, and child-care — and men as breadwinners with purchasing power. Though, given the purchasing trends exposed above, we know this not to be how most household wealth is spent.
In recent years, the catchphrase ‘womenomics’ has been tossed around, inspired by an increasing awareness of the purchasing power of women in the market economy. In addition to purchasing trends within the home, the number of working women in the United States is about to surpass the figures of working men — a further indication of the changing tides of consumer economics. Even though women still lag far behind men in terms of earning — between 35 to 75 cents to every dollar respectively — their influence on consumption has already surpassed that of men.
In fact, women represent a growth market bigger than China and India combined; and, collectively, they represent the second largest economy in the world, based on earned income versus GDP. This seems like a logical assumption, given that women make up half the population. However, due to a lack of data and failure of GDP to account for domestic labor, numbers underestimate female contribution to the global economy at large. McKinsey Global Institute found last year that empowering women in the economy could add as much as $12 trillion to global GDP by 2025. This means catering to women’s consumption is not just a compelling case for women’s equality, but also for increased profits for businesses in meeting the demands of women in the workforce..
Companies should address the rise of women as economic agents and business people in the following ways:
- Tackle Gender Bias
First of all, companies need to end the practice of gender washing and start gender innovating. Product development that lends itself to the actual lifestyles of working women could drastically change the interaction of women and incentivize female consumption. Advertising to the empowered woman is not only a more realistic approach, but also one that could inspire progress and lead to increased profit for businesses.
2. Appoint Women in Business Leadership
Another way to ensure that the needs of female consumers are adequately met is to have women making the decisions for company development and advertising. It’s simple: Who knows women better than women? Missed targets in advertising should really not come as a surprise, when only 5% of Fortune 500 CEOs in 2019 were women. Product design, advertising, and corporate strategy can all benefit from the perspective of women at the top levels.
3. Invest in Women
Finally, men currently control systems of investment and wealth. Even though women influence up to 85% of consumer spending, they only receive 2% of venture funding. Companies like Ellevest, an enterprise that was founded by CEO Sallie Krawcheck, have sought to address this disparity by teaching women how to infiltrate the historically male-dominated field of capital investment.
Women’s work in the informal economy and inside the home is uncounted or undercounted, and so too is their purchasing power. Structural and cultural barriers continue to keep perceptions of women as monolithic and domestic actors in the economy — a fact which entirely omits both their potential and active participation as consumers.
Business ecosystems would be well-advised to prepare for the wrecking ball impact of a woman’s economy. They should identify, invest in, and nurture the next generation of female driven consumption. Because after all, the future of consumption is female.
Delphi Cleaveland is an M.A. Candidate in German and European Studies with a focus on women, peace and security at the Georgetown University School of Foreign Service.
You might also enjoy this episode of The Europe Desk podcast, in which renowned feminist scholar Myra Marx Ferree discussed gender dynamics in European politics, and the crisis of masculinity: