Report shows how women influence economy

Companies ‘ignore or underestimate' female shoppers

Jay McIntosh -- Furniture Today, October 20, 2009

BOSTON — Women are driving the world economy, and in no product area is that more true than home furnishings, according to a recent report in the Harvard Business Review.
In "The Female Economy," authors Michael J. Silverstein and Kate Sayre of the Boston Consulting Group also say that despite the growing purchasing power of women, many companies "ignore or underestimate the female consumer."
Their report is based partly on a survey their firm fielded in 2008. More than 12,000 women from various locales, income levels and walks of life responded, offering insights on how they make purchase decisions and how they feel they are treated by businesses. (The survey and a brief summary of its results are online at www.womenspeakworldwide.com, and reprints of "The Female Economy" are available at www.hbr.org.)
Furniture retail newsletter publisher Michael Bailenson of BailComm in New York highlighted the study in a recent issue, noting the "staggering statistic" that according to the Harvard Business Review, women are decision makers in the purchase of 94% of home furnishings. That was the most of several categories listed, and compared with 92% for vacations and 91% for homes.
But judging from the survey results and interviews, the HBR authors concluded: "Women feel vastly underserved."
They added that many women "have too many demands on their time and are constantly juggling priorities - work, home and family. Few companies have responded to their need for time-saving solutions or for products or services designed specifically for them."
Silverstein and Sayre noted that cars, for example, "are designed for speed - not utility," but that the latter is what matters most to a mother who needs to load small children into an SUV.
They also cited Dell, which should know a thing or two about online retailing, for initially fumbling an effort to reach female consumers with the Della Web site it launched in May. Dell "fell into the classic ‘make it pink' mindset" by focusing on colors, computer accessories, and tips on counting calories and finding recipes, the authors said. Critics called the site "condescending" and Dell quickly made changes.
Globally, women "control about $20 trillion a year in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years," Silverstein and Sayre wrote. That projected increase represents a growth market bigger than China and India combined, they said.
Soon, the number of working women in the United States will top the number of working men, even though women are still paid less on average and more often work part-time, they added. As the recession abates, the authors said, "women not only represent one of the largest market opportunities in our lifetimes but also will be an important force in spurring a recovery and generating new prosperity."
In the business segments the article analyzes - fitness, beauty, apparel, health care and financial services - there are bright spots, but the products and services and the way they are sold often leave women dissatisfied.
The beauty industry, for example, is described as "a male-dominated industry in which men make hit-or-miss guesses about what women want, and products come and go at a rapid pace."
Of the segments analyzed, financial services is described as the least female-friendly. Women control much of U.S. wealth, but financial firms "presume men to be their target customers" and their representatives may talk down to women, Silverstein and Sayre learned. Financial firms could find women a great source of business "if they can change their approach."
Among the recommendations the article has for businesses that want to sell to women:
• "Considering how often the issue of time - and not enough of it - came up in our survey and interviews, offering easier and more convenient ways to make purchases would create a clear advantage in all the industries we've discussed."
• Pressures on women tend to change during their lives. They "are happiest in their early and later years" and face their greatest challenges in their early to mid 40s, when many are juggling 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."
• Many women are socially concerned and "seek to buy products and services that do good for the world."
• Women should not have to settle for products that only "cynically or superficially" address their needs. "Women will increasingly resist being stereotyped, segmented only by age or income, lumped together into an ‘all women' characterization or, worse, undifferentiated from men."