This post is part of the HBR Insight centre Marketing That Works.Back to school shopping will be uneven at best in the U.S. this year. The vast majority of consumers are gloomy, fearful about consumption, and cutting back on many purchases.
Some 40 per cent of American households are living hand to mouth, with incomes under $40,000 per year. People living at this income level are suffering from long term unemployment above 10 per cent. They will certainly spend less than last year; their children will be lucky to have new shoes and a new pair of jeans for school.
At the other end of the spectrum, of course, you find the 20 per cent of American households that earn more than $100,000; their unemployment rate is less than four per cent. They’re feeling like the recovery is underway and are beginning to spend like the good old days.
Still, there’s no question that retailers will remain under stress in the coming months. The majority of consumers will hold back and wait for sales and promotions — like they do leading up to Thanksgiving in anticipation of Black Friday, only this time it’s happening in August. Even the 40% in the middle are feeling extra cautious. What’s a store to do?
In 2009, we wrote an HBR article on the “female economy,” pointing out that while women are the drivers of economic growth the world around, retailers have been painfully slow to meet their needs. Women felt vastly underserved. In aggregate, women represent a growth market more than twice the size of China and India combined, but the women we surveyed felt that retailers didn’t take them seriously.
Two years later, little has changed. This year we polled more than 20,000 women around the world, asking them the same battery of questions — about willingness to buy, categories of satisfaction and dissatisfaction, and unmet needs.
In the U.S., women continue to say they control more than 70% of total consumer spending. They continue to express very high dissatisfaction with financial services, consumer durables, and healthcare. They also continue to tell us that the number one problem they face is conflicting and high demands on their time — they work at the job and then they have another full-time job at home.
Female employees took a substantially lesser blow in the great recession than men, who suffered 85% of the job losses. One reason is that women often work in so-called “protected” industries — education, health care, retail, service businesses, while job losses were concentrated in male-dominated industries construction, real estate, financial services. Still, U.S. women are not feeling confident and optimistic. They are the chief financial officers at home, responsible for balancing the budget, yet companies continue to ignore their needs.
Since the HBR article, we have conducted deep analyses in several major categories. Women tell us they love it when suppliers provide them with time saving solutions. Apple stores are the mall hit of the decade. Women love the ability to check out anywhere in the Apple store and get a receipt on their I-phone. The result is highest sales per square foot in mall.
One automobile company is working to give women the ability to “negotiate” the purchase of a new car without entering the dealer and take delivery at home with less than two hours total time elapse. This would trump two dissatisfactions at once: the car salesman and the agonizing slow sales process.
Back-to-school retail doesn’t have to be about markdowns. Retailers can transform their value proposition by making it about time. Working mothers in the U.S. control more than $5 trillion in spend. For retailers the critical question is how would you redesign navigate, shop, select and checkout if the optimization variable were time? For health care providers, how can you again manage appointments, service times and follow-up to complete delivery in one hour or less? For financial services companies, how can you squarely match female needs for jargon free information, risk management, and engagement and how can you provide it when they want it in 30 minute chunks or less?
Have you seen innovative approaches to targeting female customers?
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