According to a recent study conducted by the Boston Consulting Group (BCG), women control $12 trillion in global spending and 70 percent of household spending, giving weight to the suggestion that women have a significant influence over the household purse strings.
While many articles and blogs continue to site this stat, there are equally as many articles that question its basis and the interpretation that it is women controlling majority of household spending. It appears that ‘influence’ rather than ‘control’ might be the preferred explanation. While I’m sure many men are sharing in important purchase decisions, ultimately it appears that women are influencing the final decisions of household expenditure, as typically they are making the final transactions. The BCG poll of 23,000 women in 22 countries, found the women who drive 70 percent of total consumer spending decide how their families use financial services, insurance and health care. As we continue to remain cautious post GFC, as consumers we are all re-evaluating our saving and purchase habits and as a result retailers have been hit hard. In these uncertain times CEOs are obviously concerned about their future, and should therefore be critically evaluating the business to decide on the best strategy for going forward. Central to this is understanding your customer and creating the value they want. On the notion that women influence such spending, we need to re-examine not only how businesses communicate to women (this is the superficial advertising layer) but we need to re-evaluate what is important to women and build this into the products and services themselves. This represents the deeper strategic layer of creating a unique value proposition. And if we are thinking of refocusing towards ‘what women want’, lets not be mistaken to believe that they hold sway only in B2C transactions. There are many industries where women hold predominance of decision making - a significant one is Government. A great tool to assess these needs is the Value Curve. The value curve plots how your business delivers to customers on the factors that matter to them. Firstly, decide on the critical factors that affect the nature of competition in the industry or the reasons your customers buy from you (e.g. speed of delivery, innovation, specialist expertise). List these across the horizontal axis of a graph. The vertical axis (labeled 1 to 5) represents the extent to which the business delivers on each factor. Plot the line for your business, as well as key competitors. Are your competitors outperforming you in key areas? Where are areas of opportunity for value creation? Rest assured, consumers will spend. Just not impulsively.
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