The Power of the Purse..!!

The projected worldwide increase of women’s income by 2013 is US$ 5.1 trillion, which is greater than China’s expected growth of US$ 3 trillion over the same time period.

How is women’s increase in purchasing power transforming markets and society?

Key Points

• The increased purchasing power of women, combined with the spread of new technologies that provide greater market access to female entrepreneurs and workers, has the potential to generate sweeping economic and social change, particularly in developing countries

• Global marketing analysts estimate that women already control as much as 80% of all consumer spending, either directly or indirectly – an estimate that, if anything, may be understated; this share could increase in coming years, as global female employment is projected to rise by 20% over the next five years

• As their purchasing power increases, women are likely to also gain increased influence over other household decisions, not just financial ones

• Studies show that women are more likely than men to spend their discretionary income on family necessities – in theory, increased female control of household budgets could lead to improved child nutrition, health and education in the developing world

• The economic empowerment of women is likely to create difficult social challenges as well as opportunities, as existing marital and other relationships between men and women will come under increasing strain

Synopsis

Considered as a whole, women could and perhaps should be considered the world’s largest emerging market. In developed countries, the recent recession has boosted the relative economic power of women, as they have been less exposed to layoffs in traditionally male-dominated industries, such as financial services. Already, close to 50% of the workforce in the US is female, while 60% of all college degrees awarded in the US and Europe now go to women. In the developing world, meanwhile, the spread of transformative technology such as mobile telephony is enabling millions of women to enter the formal economy both as workers and entrepreneurs.

These trends are creating social challenges as well as opportunities. In developing countries, increased disposable income is fuelling rural economic development, channelling resources to impoverished families and creating incentives to invest in health and education for young girls.

On the negative side, the economic empowerment of women is disrupting traditional male-dominated social relationships, potentially resulting in marital strife, the alienation of young men, and the breakdown of extended family support systems. Cultural and social evolution, not just economic progress, holds the key to resolving these problems.

In the developed world, women workers and entrepreneurs face a different but equally complex set of challenges, as do the companies that employ and/or do business with them. Although women now account for a rising share of graduates and entry-level workers, even in traditionally male-dominated professions as business and finance, women continue to abandon career tracks and leave the workforce at far higher rates than men, due to the persistence of their roles as primary caregivers.

While it is important to distinguish between voluntary and involuntary motives for leaving the workforce (since some women genuinely prefer to devote the bulk of their time to their homes and families), it is in the interests of employers and society as a whole to adopt family-friendly policies, such as improved childcare services, that would allow women to remain in or return to the workplace.

Likewise, in the developing world it is important to recognize that some women are being forced into the labour market by economic necessity, not choice. While technological advances and targeted investments in young girls are important tools for easing these pressures, a reduction in overall poverty and improvements in the general level of social services are also critical.

Attention was also given to the implications of these trends for business – specifically, marketing products and services to women. It was generally agreed that successful strategies will seek to reach women as individuals, not as generic “female consumers”. This is in keeping with the broader trend towards increased fragmentation of advertising channels and the breakdown of mass markets.

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