The booming female economy – an opportunity not to be ignored
Can any business afford to ignore a market segment that exceeds the combined size of China and India? Ten years ago, the Harvard Business Review, predicted that women’s total annual earnings were set to exceed $18 trillion. In a piece titled “The Female Economy”, they said
“women represent a growth market bigger than China and India combined—more than twice as big”.
Today, women now account for $39.6 trillion of global wealth and Boston Consulting Group forecast that by 2028, they will control 75% of discretionary spend. Over the last few years, we have seen several banks establish special desks dedicated to servicing female entrepreneurs and set up networks to support them. It’s a good place to start but it is only part of the journey businesses must embark on if they want to tap into this increasingly powerful and influential market. With up to 80% of consumer buying decisions being made or largely influenced by women, this is clearly one consumer segment not to be taken for granted. In addition to controlling spend on household items, women also now spend large on luxury items. Five years ago, research by Luxury Daily – a leading luxury business publication – revealed that 42% of global spend on luxury items was made by women.
There is increasing focus on ensuring women participate more on boards, on executives teams and in politics. The business case for board gender diversity and having women in leadership is no longer debatable. It is sacrosanct. Female entrepreneurs also continue to take giant strides and women are becoming more intentional about taking charge of their finances and investments. They are demanding more and are no longer satisfied with just operating from the sidelines. Women are building their own tables and taking power. From all indications, the earning, spending and decision making power of women will continue on an upward trajectory.
Their status and earning power has changed significantly and the female economy is booming.
How can businesses position themselves to tap into this huge opportunity? In the words of Bridget Brennan, a pioneer in marketing to female consumers:
“Marketing to women isn’t about creating a side project in a silo – it’s about integrating and mainstreaming women’s perspectives into every area of the business.”
Businesses looking to maximise the opportunities represented by the female economy must come to grips with the gaps in their knowledge about how women spend, how they interact with money, what their consumer preferences are and what their priorities are. Businesses must go out there and talk to the women to better understand their needs and what they want. Product development, sales, marketing and advertising for instance will need to take all of this into cognisance and change how they have traditionally operated. Most of what has been built to date has been built from a man’s perspective. It is time for a change.
Women care about impact. They don’t just want the biggest car, they want to know how it will fit in with their lifestyle. Women care about making a connection and having a sense of community. They are invested in the common good. They are pressed for time because of all the demands they have to juggle. Businesses need to mine these insights and more and begin to tailor services, products and messaging accordingly. They would do well to take note of W. Edwards Deming’s words: “You don’t need to change – your survival is not mandatory.”
From Other Climes
This week the United Arab Emirates, became the latest region to put in place regulation requiring all listed companies to have at least one female director on their boards. Previously, they were content with companies just providing explanations as to why they had all-male boards. That has now changed and female representation has become mandatory.
Women currently take up only 3.5% of board seat in the UAE. Hopefully, this new law will move the needle beyond mere tokenism and ensure businesses benefit from having board perspectives enriched through embracing proper gender diversity and inclusion.
Ivana Osagie is the Founder/CEO of PWR – an Africa focused female leadership, gender diversity and inclusion practice.