It’s time for a more nuanced analysis of what the women’s economy really looks like and how it will evolve in the future.
At last, companies are taking the women’s economy seriously. There’s ample reason for them to do so; for instance, a recent study by Axa, Accenture and International Finance Corporation (IFC) found that by 2030 the women’s insurance market could double in value to $1.7 trillion, with sales of certain policy types increasing by rates of 1,000 percent. And that’s just in a single industry.
Now that the concept is becoming more mainstream, and the private sector is, thankfully, moving beyond the idea that designing for women means coloring products pink and calling it a day, it’s time for a more nuanced analysis of what the women’s economy really looks like and how it could evolve in the future.
Companies that want to be leaders in the women’s economy should understand three crucial points.
- We know less than we should about the women’s economy:
In the words of Professor Linda Scott, “consumption is the one area of the economy where women don’t need to beg for power because they already have it.” (Emphasis in original.)
The academic consensus is that women control 60-80 percent of consumer spending globally. Unfortunately, that’s about all the consensus there is on the topic. Nielsen, for instance, can only place women’s spending power somewhere “from $5 trillion to $15 trillion annually.” And this from a marketing research firm. Since most studies are based in the U.S. or a few larger economies like India and China, and the latter tend to focus on the middle class or above, when it comes to detailing what the women’s economy looks like for low-income women in emerging markets, the numbers get even fuzzier.
This is why one the most powerful things companies can do for the women’s economy, not to mention their own bottom lines, is to research their markets using sex disaggregated data and differentiating consumer preferences by gender.
- Women control some spending categories but are locked out of others:
One crucial point obfuscated by vague data is that the power of the women’s economy isn’t evenly spread. Women may control most spending on some categories while being completely locked out of others; for instance, women in South Asia are 38 percent less likely than men to own a mobile phone, either because if there is only one family phone the man tends to get it or because giving women, especially young or single women, the independence associated with a phone is considered unseemly.
For companies, the silver lining is that those areas in which women are most restricted may also be those with the highest growth potential. IFC’s Banking on Women program, for example, helps financial institutions profitably and sustainably serve women-owned businesses, including helping to close the $320 billion credit gap faced by women-owned SMEs in emerging markets.
- Evolving gender norms will change what constitute “women’s” products:
Women’s disproportionate consumer power reflects their disproportionate household burden. If men and women were to share responsibility for shopping more equally, their consumer spending would also be more even.
This shift is underway. In America, for example, men have already begun to shop more, though still not nearly at the same rate as women. What will really accelerate the trend is the rise of Millennials and Generation Z, two groups that have comparatively low tolerance for traditional gender norms and high expectations for corporate responsibility.
Companies have already begun to take on what could be termed the “equality economy” by intentionally undermining gender norms. In India, Ariel detergent’s #ShareTheLoad campaign is based on ending gender divisions in laundry washing, a move that clearly aims both to endear them to women and to capture the spending of progressive men. For companies, the lesson is not just to design for and market to women, but to do so in ways that promote gender equality.
Given that its precise size is still vague, there’s huge variation by region and product, and growing gender equality may change everything, does the women’s economy still matter for companies? Absolutely.
First, there’s still a lot of catch up work to do. While companies tend to consider products gender neutral, in practice they often are not. Companies can capture a real innovation premium by acknowledging this gap and seeking to overcome it. Almost every product or service could be reinvented once considered with a gender lens.
Moreover, while the long-term trend points towards increased gender equity, it will hardly be an overnight occurrence. If anything, companies should seize on the women’s economy both as an opportunity now and as positioning for whatever the next iteration is moving forward, whether that be the “women’s economy” or the “equality economy”.
This blog was co-published with International Finance Corporation and featured on The Double X Economy. For more of Alexa’s writing on the women’s economy, check out “Women and Innovation: Making the Connection” and “Beyond the Buzzword: Unintended Consequences of Women’s Empowerment” . You can also view her full publication list or follow her on Twitter.