TalentTuning

• We’ve said it the last 10 years, but it is nice to have a publication like Harvard Business Review echo it: Women are the big market of the future, and companies are doing such a good job of blowing it you would think they were doing it on purpose.
• The HBR article "The Female Economy" by Michael J. Silverstein and Kate Sayre, both of Boston Consulting Group, reports how "women represent the largest market opportunity in the world".
• How big a market? More than twice the size of China and India combined, the authors calculate (based on current GDP; obviously the countries between them have a third of the world’s women — and total population).
• The authors say, "In aggregate, women represent a growth market bigger than China and India combined — more than twice as big, in fact."
• In clearer terms, the article says women worldwide control about $20 trillion in consumer spending each year, a figure that may grow as much as 40% in the next five years. Women earn $13 trillion a year, a number that should grow at a similar pace by 2015.
• In only one of nine major economies the HBR report covered did women not control the majority of consumer spending: China, where they are responsible for $300 million worth of the $600 million in national private outlays. In the US, women decide $4.3 trillion of the $5.9 trillion consumers spend each year.
• So surely every company should be turning its sights on women, but we know better. "Most companies have much to learn about selling to women," the authors explain. Sheer ignorance is often the reason companies shoot themselves in the foot repeatedly.
• Marketing is routinely focused on men, paying little mind to meeting women’s needs. Companies often patronize women in advertising, promoting stereotypes, and focus on features that appeal more to men even for products whose purchase is overwhelming made by women.
• The future is bright for companies that figure out how to avoid such mistakes… and for those who don’t, the bad times are not going to go away. "A focus on women as a target market—instead of on any geographical market—will up a company’s odds of success when the recovery begins," the authors say. "Understanding and meeting women’s needs will be essential to re-building the economy; therein lies the key to breakout growth, loyalty, and market share."
• First off, companies must provide tailored goods and services to women. Marketers need to keep in mind that women are usually overburdened (from three-quarters, in Japan, to less than a quarter, in India, of men don’t help with household chores, women say), and so they are "especially responsive to products and services that can help them better control their lives and balance their priorities."
• Knowing whom you're targeting and what she looks for in the marketplace can be a tremendous source of advantage, the authors point out.

Key facts about the 50+ segment in Denmark:

General facts:

1. In Denmark, the population over 50 years old represents 33% of the population, and controls 75% of the private fortune. (Source: pej gruppen)
2. The demographic development forecasts an increase in persons over 50 years old. (Source: pej gruppen/ Source: Statistics Denmark/www.dst.dk, 2010.)
3. 9 out of 10 of the 50-70 year old persons prefer to spend their savings realizing their own dreams and ambitions rather than saving for their children. They are also willing to take out a mortgage in the equity in their houses to finance their consumption. (Source: Nordea)

These figures show the segment’s enormous economic potential for advertisers. The 50+ segment is an increasingly important target group for advertisers, both now and in the future. To maximize their profits, companies need to target their campaigns to this lucrative segment.

The paradox is that advertisers typically define their target groups as 25-40 years old (or the like). Another key fact is that the group of 60-70 year olds’ consumption equals DKK 65 billion and the group of 20-30 year olds’ consumption equals DKK 68 billion. In this way there is closely the same potential in the group of 60-70 year olds, as in the group of 20-30 year olds, but no one are targeting their campaigns at this group.

All above-mentioned figures are based on research of both men and women. However, as you mention, Marti, women determine more than 80% of all buying decisions, and therefore, we can  argue that women has a huge influence on what the above mentioned household fortunes are spent on.

Industry specific facts:

1. Travel: Consumers 60+ travel more than the Danish population on average (buy package holidays), and often they invite, and pay for, the extended family. (Source: pej gruppen/Source: Statistics Denmark/www.dst.dk, 2010.)
2. Beauty & fashion: Vanity does not increase when people get older. Women in the age 55-64 are the part of the population that spends the most money on clothes. Furthermore, the consumption of cosmetics is increasing. (Source: agelab)
3. Cars: 60% of all new luxury cars are purchased by consumers aged 50+, and 45% of all new cars are purchased by consumers aged 50+. (Source: agelab)

Life phases:
As the 50+ segment covers so many persons, there is a need to divide the segment into sub-segments. A Danish consultancy, pej gruppen, has divided the 50+ segment into sub-segments based on physical and mental condition, and not chronological age. The life phases are called:

• Self-realization: The children just moved out, the person is either in the height of their career or has recently retired. The phase is characterized by having a lot of time and a high spending-power, self-realization and enjoying life.
• New senior: Retirement, a new identity, new hobbies. The phase is characterized by an active life with focus on the family again – e.g. purchase of vacations for the extended family.
• Routine senior: Physical disabilities, security, driven by habit, consumption declines.

The first two phases are the most important, as the consumption is largest here, both in volume and in worth.

This is covered in their book called ”Fra barnevogn til kørestol – livsfaser og forbrug” (From baby carriage to wheelchair – life phases and consumption).

Source: The Economist, Catalyst, McKinsey & Company, DR, Aftenposten, The HBR article "The Female Economy" by Michael J. Silverstein and Kate Sayre, both of Boston Consulting Group, reports how "women represent the largest market opportunity in the world", women-omics.