In the past, I have written blogs predicting trends for the coming year. This year, I want to focus on one trend, that of big data, and address what it means when marketing to women.
When I discuss marketing to women, I find that most managers are well aware of the economic importance of women and recognize that women influence 85 percent of all household purchase decisions. I believe that 2015 will generate a renewed interest in marketing to women. This renewed interest will be driven by big data, which will draw managers back to demographics to explain consumer decision-making. In this post, I will address the big data phenomena before cautioning managers against overusing customer demographics (e.g., gender) to understand consumption.
Big Data
The Broader Issue: Organizations will continue to focus on big data. Eighty-five percent of large organizations are unable to exploit big data for a competitive advantage, even though 4.4m jobs will be/have been created around big data (Gartner). There are many consequences of this, for example: (1) managers need to develop an information-led strategy appropriate to their own organization; (2) significant resources will be devoted to IT, and those involved in IT will have a louder voice at the "strategy table"; and (3) managers need to be careful not to lose sight of overarching questions such as "How do I better understand customers and the customer experience so as to drive innovation and grow my organization?"
The Marketing to Women Issue: Many organizations have access to increasing amounts of customer data and can identify customers based on demographics such as gender, age and ethnicity. As a result, managers quickly compare their organization's customer demographic profiles to competitor profiles or census data and then make statements such as "we need to target more women." In so doing, managers often overlook the principles of market segmentation... and fail to fully recognize the changing face of today's women.
The Solution: While big data will continue to capture the imagination of many, in addition to recalling the principles of market segmentation, managers must seek to understand the role of gender in explaining purchase decision-making for products and services marketed by their organization -- both differences between men and women and differences between women.
This is why I wrote my book "Why Marketing to Women Doesn't Work: Using Market Segmentation to Understand Customer Needs." I'm not saying that demographics aren't important but I am cautioning against the return to demographics as a primary driver of segmentation. One of the reasons I am careful is that demographics such as gender, age, or life stage are often only weakly correlated with consumption patterns, and purchase decision-making itself is complex in that it embraces many roles such as influencer, buyer, owner, and user.
How to Market to Women When Not All Women Are The Same
Below, I identify a number of recent trends to illustrate the changing face of today's women. I could have added many more data points but I do hope that the message is clear -- when your database identifies customers as women, are you also picking up additional data to demonstrate differences between women? What does marketing to women mean when women themselves are in a state of flux?
Recent Trends:
1.The social norm still exists that men should out earn women and they do -- women, on average, earn about ¾ of what men earn. But differences are starting to appear: single childless women aged 22-30 earn more than their male counterparts in most US cities, and 37% of married women earn more than their husbands.
2.Women out-learn men. More women than men now graduate with bachelors, masters and PhD.
3.The number of women who hold positions of leadership is growing. Women now comprise 15.8% of S&P 1500 boards and hold 5.4% of Fortune 1000 CEO positions.
4.Women, especially those who are college educated, get married and have children later.
5.Women head 30% of all households. Just over 1/3 of these households are family households comprising children aged 18 years or younger.
6.The number of stay at home moms rose to 29% in 2012.
Marketing to Women Implications:
1. Income disparity between women will continue. The number of breadwinner moms is on the rise, millennial women are near pay parity, yet more women are choosing to stay at home to raise their children,. In addition, the number of single women who head family households is also on the rise and these households have less income than other households (for example, single women family households make less than 50% of what a married couple family household makes).
2.As education and income levels continue to rise, and women hold more positions of leadership within organizations, women's influence over purchase decision-making will continue to grow. Women will demand more services to "make her life easier" (e.g., home help) and will seek more rest and relaxation (e.g., vacations, health and fitness). Women will continue to exert influence in categories that were once seen as the domain of men (e.g., cars, insurance, and alcohol) and will have a voice in categories that are still male dominant (e.g., motor sports).
3.Women will continue to juggle work and home responsibilities ... but so too will men. Not only do men want to spend more time with their children but also it often makes economic sense for them to do so.
4.Joint purchase decision-making will increase. Joint decision-making is often seen as important for items such as furniture and major appliances but is filtering down to household items such as food and cleaning products because of the blurring of gender roles.
Big data is a big deal and managers now have access to consumer insights and metrics that many of us never considered possible. Demographics are of course only one data type but are perhaps the easiest to collect and link to consumer behavior. In the context of marketing to women, just because a customer can be classified as a woman does not mean that the story is told - not all women are the same and the differences between women will only continue to become more exacerbated. The challenge for 2015 then is to look for differences between women and to understand how to market to women, many of whom take on a variety of different roles.