You probably have formed two questions in your mind already; why is he telling us something we already know, and what is the relevance of this to Irish tourism?
The answer to the first question is that if you read on you will definitely learn something new, and secondly, this information, properly put to use, can have significant implications of a positive nature for the future of Irish tourism.
Still with me?
A new book, produced by the authoritative Boston Consulting Group (BCG), outlines the rise of a new emerging market, one that may end up being the largest and most powerful of all…women. The book is based on a survey of 12,000 women from 22 countries – one of the largest quantative marketing studies ever undertaken.
-Women represent the largest market opportunity in the world.
-Despite women’s dominant buying power, many businesses continue to market mostly to men, and fail to explore how they might meet women’s needs.
-Businesses that can offer tailored products and services, going beyond “make it pink”, will be positioned to win big as the economy begins to recover.
Women are now poised to drive the post-recession world economy, thanks to an estimated $5 trillion in new female-earned income that will be coming on line over the next 5 years. Worldwide income for men at $23.4 trillion is still nearly double that for women but the gap is shrinking significantly, because the vast bulk of new income growth over the next 5 years will go to women. This is due to a narrowing wage gap and rising female employment. That means women will be the ones driving the shopping, and economists hope, the recovery. This growth represents the biggest emerging market in the history of the planet – more than twice the size of the two hottest developing markets, India and China, COMBINED.
Globally, women control about $20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next 5 years. Their $13 trillion in total yearly earnings could reach $18 trillion in the same period. In fact, women already make the majority of the world’s purchasing decisions.
Newsweek magazine doesn’t believe that the impact of this seismic shift is yet fully grasped by either political or business leaders. Another recent report by Goldman Sachs, rather patronisingly named The Power of the Purse, proclaims women to bethe economic engine of the future. It notes that future spending by women which tends to focus more on health, education and children’s wellbeing should support the development of human capital to a greater extent than spending by men, thus fuelling economic growth in the years ahead.
There is a wide body of research to suggest that women’s spending patterns may be exactly what the world needs at this point in time. According to UNIFEM (the UN agency dedicated to women), “Economists have studied how women spend in comparison to men, and they tend to spend more on things that are linked to people’s well-being, like health and education. They also tend to save more and exhibit less risky financial behaviour”.
One of the key insights gleaned from the BCG research is that women everywhere struggle with a shortage of time. This lack of time influences women’s purchasing decisions. Women will quickly embrace products or services that enable them to “take back time”. They will shun those that add complication or inconvenience. Above all, women want “agents of leverage” ways to find time, save time, free up time.
Women are both the primary spenders and savers in our consumer society, so they seek value. They are hard-headed household purchasing agents and tender-hearted dreamers. They want quality and effectiveness, as well as attention to design and marketing narrative.
Businesses that truly understand women and serve them well follow the 4 Rs: Recognise, Research, Respond, Refine. Female-centric businesses are also adept at understanding women’s value calculus. Women in particular rely on a personal value calculus to assess every product or service from several perspectives. They consider its technical, functional, and emotional merits. They gather facts and opinions about usage from many sources, especially their personal networks. They plug all these factors into an unwritten, but rigorous calculus that enables them to determine the product’s value and whether its price justifies its purchase.
The book concludes that; businesses that really get women and respond to their unmet needs, with skill, nuance and genuine engagement, will enjoy breakaway growth, unprecedented customer loyalty, and category dominance.
The authors of the book, Women Want More, Michael Silverstein and Kate Sayre, believe that women represent one of the largest market opportunities of our lifetime and that they will be an important force in hastening a recovery and new prosperity. The rewards for businesses that do understand what women want and are able to serve them well, will be enormous. Female consumption power is leading consumption power in the world, and overlooking that would be a huge marketing error.
The financial crisis will come to an end, and now is the time to lay the foundation for post-recession growth. A focus on women as a target market, instead of on any geographical market, will up a business’s odds of success when the recovery begins. Understanding and meeting women’s needs will be essential to rebuilding the economy; therein lies the key to breakout growth, loyalty, and market share.
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September 29th 2009