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Tuesday, May 22, 2007

Women Hold The Power of The Sale

From the August 21/28, 2006 issue of Floor Covering Weekly, my article titled "Women hold the power of the sale".

Consider this: The majority of retail operates in a world designed, owned and managed by men for women consumers. Think grocery or apparel stores, car dealerships, even flooring stores. So said Paco Underhill during his recent Science of Shopping Conference.

As power shifts across categories to consumers, we see traditional institutions wobble. The successful ones reinvent themselves; the less imaginative ones fall by the wayside. What about department stores? Most have failed and become irrelevant for not connecting with their woman customer.

Connecting successfully means truly understanding who that person is, how she interacts with your store and what value she obtains from you. Although she may have tolerated the way things have been, she increasingly prefers environments that recognize her, welcome her and acknowledge her as having the means to make significant purchases.

Do you accept that your principal customer is female, and has many other places to buy from? The Internet – via sites like Amazon, eBay, and others, where consumers compare features, benefits, availability and prices – has driven this change. Consumers comfortably drift between digital and real environments. When they choose to go into brick-and-mortar stores, they expect the store to offer an experience not available in the digital world.

In case you remain skeptical, here are the hard facts:

Women represent 51 percent of the overall population. As the population ages, it becomes increasingly female.

Women are better educated than men, representing the majority of college students. They earn more than half of all bachelor degrees, 57 percent of masters and 42 percentof doctoral degrees.

Sixty percent of women work. They represent 47 percent of the labor force. Women are taking on greater responsibility and becoming not only chief purchasing officers at home, but also in business: 10.6 million women business owners generate $2.5 trillion in sales and employ 19.1 million workers.

What about money? In 55 percent of US households, women make half (or more) of their family’s income. Thirty percent of women out-earn their husbands. They represent 47 percent of Americans with assets greater than $500,000. They control more than 50 percent of private wealth, and manage family finances in 75 percent of households.

Also, baby boomer women are benefiting from a double inheritance factor as they outlive their spouses. They stand to acquire more than 85 percent of the $12 trillion growth in US wealth between 1995 and 2010.

This matters because women are the major purchase decision makers for:
– 61 percent of major home fix-up projects
– 66 percent of all home-computer purchases
– 83 percent of all consumer purchases
– 94 percent of home furnishings
– 91 percent of home sales – single women are the 2nd largest group of homebuyers at 21 percent and 18 percent of all first time homebuyers [vs. 9 percent men].

Women carry 76 million credit cards [8 million more than men]. Yet, they are thoughtful about spending; quality matters when making major purchases, ahead of price. Think how powerfully strong brands succinctly communicate quality to consumers, particularly to women who are more brand loyal than men, in complex and potentially expensive categories like flooring.

Women are more profitable than men. Not only via shorter repeat purchase cycles, but they freely give referrals [and depend on referrals for their decisions]. Companies like Starbucks, Whole Foods and Anthropologie count on word-of-mouth referrals -- considering them the strongest and most effective marketing tools available.

Your in-store environment counts today more than ever with this powerful consumer. So make sure to understand who she is and how your store meets her needs.

If you’re not convinced, ask yourselves the following:
- Why do Home Depot and Lowe’s offer how-to workshops for women? Why are they improving their store layouts, lighting, etc.?
- Why is Best Buy creating different consumer segment store experiences? [e.g., Jill, Buzz, Barry…]?
- Why has Sony created Sony Style stores to provide women consumers more information about high-priced complex products?

Those retailers who get it stand to sell. Those who don’t, won’t. And, by the way, selling to men won’t reach women, but when you successfully sell to women, you also sell to men. Who do you want to sell to?

NOTE: This wonderful article from the 10/4/06 issue of The Denver Post The home repair trend: Do-it-herself. Industry adjusting slowly to customer gender shift By Elana Ashanti Jefferson from The Denver Post 10/4/06 recaptures many of the same points. It ends with the following quote:

"The deep, dark secret that has been shared with me by many men is that these approaches, ostensibly geared toward women, are actually welcomed by men as well," Wolf says. "Because many of them feel like they should know [about home improvement], but they don't."

The April/May issue of Floor Focus magazine has an article by Alisa Pucher on the subject of marketing to women. It hasn't yet been posted online; however, the Jan/Feb 07 issue of her
Shop Talk column is available and offers similar advice.

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Anonymous said...

Great article! It's great that many retailers are finally "getting it" and realizing just how big a role women have in purchasing power, especially when it comes to her home.

Joan Wyatt

Anonymous said...

Given all these great facts, WHY do we keep seeing conferences on "marketing to women", as if this is some kind of exception, and not the norm. We might as well have conferences on 'marketing to adults'.

CB Whittemore said...

Joan, thank you. It is great that so many 'get' it, but then ... an awful lot just don't get it.

Susan, that's why there are conferences on 'marketing to women'. I'm amazed at the number of times I'll hear well respected consultants and analysts who are so-called experts on the marketplace and they never come out and acknowledge that women are the primary purchasers and decision-makers. I guess they aren't really observing what is happening in the marketplace....

Thanks, both, for your comments.

Joan, you have a fabulous business model in TomboyTools. If you ever want to add your perspective here, you are most welcome.

Susan, same goes for you!

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