cross-posted on Inc.
Companies that engage, develop, and promote female talent are more likely to capture a new market and to improve market share.
by Carolyn Buck Luce
Ten years ago, when companies were talking about capturing the next 1 billion customers, they were referring to participating in the emerging markets of Brazil, Russia, India, and China (BRIC). And that prospect was open to only the largest and well-resourced global companies that had mastered the art of global expansion.
Today, the biggest emerging market is much closer to home–whether home for you is the U.S., Europe, China, or elsewhere. Women are the largest and fastest growing segment of purchasers and investors in the economy — any economy.
Women are the big spenders and are getting wealthy fast.
The numbers are staggering. In the U.S. (with similar directional numbers in Europe), women account for the vast majority of all consumer purchases–65 percent of new car purchases, 85 percent of healthcare expenditures, and 91 percent of new homes purchased. They represent the fastest cohort of wealth accumulators–owning 75 percent of the nation’s wealth in the U.S.–and are estimated to inherit anywhere from $12 to $40 trillion over the next 20 years. U.S. women are also now the majority in the workforce. Close to 1 billion women are estimated to enter the workforce and marketplace in the next several decades in the developing world.
These seismic economic and demographic shifts are referred to as the “SHEconomy” and illustrate the “Power of the Purse” of women as decision makers and influencers in many segments of the economy. The power of this market is astonishing yet women continue to be relatively under-invested in by large companies. Research shows that women feel misunderstood, underserved, underestimated, and undervalued by companies across industries.
Women are highly influential in financial services and healthcare decisions.
I serve as Executive-in-Residence at the Center for Talent Innovation (CTI), and we’re conducting research on the Power of the Purse in financial services and in healthcare, two sectors where women are highly influential if not dominant in the wealth and health decisions for their families. We find that in each of these sectors, women feel misunderstood (84 percent by investment advisers and 66 percent by healthcare marketers) and underserved.
There is a huge opportunity for companies, large and small, to align their business and talent strategies to fully take advantage of the implications of the SHEconomy. Companies are learning that successful strategies go way beyond coloring the product pink. A winning strategy requires deep market insights into the users’ desired experiences and their customer and behavioral preferences.
There are lessons that can be learned from companies that, over the last 10 years, have successfully captured the BRIC emerging markets. Instead of “exporting” their traditional business models and products, these companies modified both their business and talent strategies to fit the new market–by hiring local talent to lead, designing for local tastes and budgets, and adjusting for shopping preferences.
Gender-diverse teams are making headway.
The great news of the SHEconomy is that companies have much of the talent they need in-house or close to home. The business model and mind shift that is required is to move from product-centric design and development to customer-centric design that factors in the user experience and unmet needs. And the goal of the shift in the talent strategy is to unleash the power, ambition, and insights of these gender-diverse teams.
Our recent (CTI) report, “Innovation, Diversity and Market Growth,” illuminated that companies with greater aptitude for fully engaging, developing and promoting their female and diverse talent are more likely to capture a new market and improve market share. In short, these companies will better understand and connect to what women want and value in the marketplace.
The silver lining in the Power of the Purse is that it provides companies with a clear path to modify their product-centric business models and “traditional” talent strategies to capture their fair share of the SHEconomy. At a time when the majority of college graduates are women in many countries and more than $20 trillion annually is spent from the purse controlled by women, the opportunities for nimble, customer-focused companies are exponential.