Women’s Purchasing Power Grows
By Tom Ryan
An often-cited marketing
maxim holds that around 80 percent of consumer purchases are driven by
women. The figure is often cited to emphasize how women are underestimated
and under-served as customers. But the generally-accepted principle frequently
leaves retailers and brands guessing at the extent of women’s buying
influence within given categories.
The theory bases its high purchasing power on how much a women will
buy for herself, how much she buys for others
(i.e., husband, boyfriend, kids, nephews, male friends, etc.) and even
how much a women will influence other purchases. Their buying acumen
is often backed by stats around the female gender’s growing economic power,
their increasing influence in the household, as well as perhaps stereotypical
views on their propensity to shop.
The finding is
most often quoted from Tom Peters’ Re-Imagine! Business
Excellence in a Disruptive Age. In the book published in 2003,
the management guru claims that women make up 83 percent of all consumer
purchases. The book notes that in category after category, women are
“instigators-in-chief” of most consumer purchases.
Breaking out few categories,
the book estimates that women determine a whopping 94 percent of home furnishings
purchases, 92 percent of vacations, 91 percent of new homes, 80 percent of DIY
(do-it-yourself) projects, 68 percent of car purchases, and 51 percent
of consumer electronics buys. The book also found that women make up about
89 percent of the spending decisions around new bank accounts and 80 percent
around healthcare decisions.
But it’s tough to figure
out women’s influence across all categories.
For instance, take the
often male-skewed sporting goods industry. In its annual Sporting
Goods Market Report, the National Sporting Goods Association (NSGA)
finds that women on their own behalf acquire about 55 percent of units
sold in 14 categories of athletic footwear (excluding rugged outdoor, hunting
boots, cleated footwear and water sport). Including purchases she
drove for her husband, sons, and other male friends, purchasing power around
athletic footwear could be argued to come close to the 80 percent mark.
Falling well short might be the category of sports equipment, in which
women make up about a third of sales and where purchasing decisions for
children are often driven by the father.
But in his book, Mr.
Peters laments on how, given their dominant purchasing power, women are
rarely turned to when it comes to marketing and product
design. And he predicted in Business Week last year that with women
outpacing men in college degrees, they’ll increasingly be leading decision
making in Corporate America.
Mr. Peters said, “It’s
going to be so extreme in the next 20 years, it’s just eye popping.”
How valid is the notion that women determine around 80 percent of consumer
purchasing decisions? In what categories is the theory highly relevant?
In what categories may it be irrelevant?