Dr Jana Matthews | 4 min read | Respect women as purchasers to achieve business growth
The importance of women to the world, our society and our global economy is often underestimated. In 2020, Harvard Business Review estimated that the “female economy” was worth $20 trillion and would grow to $28 trillion within five years. Yet when it comes to recognising this contribution, the business world is remarkably blasé.
It’s surprising that more people, especially salespeople, haven’t yet figured out that women account for 85 percent of all purchases and drive 70-80 percent of all consumer spending. Women are more often than not the decision-makers when it comes to a purchase.
A friend decided she needed a new car. But walked out of the Audi showroom when the salesman suggested she come back for a test drive with her husband. She bought a BMW because the dealer understood that she had come to make a purchase. Another friend goes shopping with her husband and guides him to choose pants, shirts and ties that go together.
Is it a man’s world?
Why is it that most of the products in the world are designed by men, for men to buy? Women are doing most of the purchasing or are a major influence in the purchasing decisions. Why aren’t more women then involved in designing and developing products and services? Delivering the feature and benefits that women value should be part of every company’s product and marketing strategy. Particular given the significant and growing economic power of women.
But it’s not just about teaching sales staff to better understand female customers or providing women with more appealing products. We need to recognise the bias being built into the products we use every day.
At the Australian Financial Review’s 100 Women of Influence Awards, award winner Catriona Wallace asked everyone to take out their phones and Google the phrase “100 Most Influential People”. Although women comprise half of the global population, only three out of the first 65 search results were women. Have women not influenced the history of the world? Or have the people, primarily men, who developed the algorithms that select the “influential people,” significantly undervalued the accomplishments of a Joan of Arc, Mother Theresa, or Marie Curie? Did Nicolas Tesla, Napoleon, or Galileo really have that much more influence on the world than those three women?
Let’s fight the bias
To counteract this bias, we need to attract more women to careers in science, technology, engineering, arts and maths. Involve them in the development of products, especially high-tech products. Artificial intelligence (AI) algorithms are being developed primarily by men. It is driving the automated world of the present and future. The stakes are much higher than “where will women place on the list of ‘who’s influential’.
The biases, values and beliefs programmed into AI can shift the tipping point of decisions. For example, profit versus people, environmental protection versus exploitation, funding for sports versus the arts, schools versus prisons, guns versus butter – and many more trade-offs that will shape our future world. We need men and women designing the software that will be guiding AI decisions.
Make women central to your strategy
Capitalising on women’s purchasing power, offering products and services that women want to buy, and respecting women as purchasers will definitely increase a company’s top line. The bottom line, according to a 2019 report by McKinsey, can be increased by having more women in leadership and decision-making roles.
While larger companies are targeting more women on their boards, research from the KPMG High Growth Ventures Team indicates that 72 percent of male-founded Australian start ups don’t have a female director on the board, and 76 percent have no gender diversity targets for their board. This is in spite of the fact that in 2020 McKinsey found that companies in the top quartile for gender diverse executive teams were 25 percent more likely to experience above-average profitability than companies in the fourth quartile. For companies with both ethnic and cultural diversity, there was a 36 percent likelihood of out-performance on EBIT margin. Greater diversity of leadership at the management and board levels improves the quality of decision-making and company culture. It has a direct impact on the bottom line and share price.
Respect women as purchasers to achieve business growth
So let’s celebrate and encourage the social, artistic, technical and financial contribution women can and should be making to the world, our society and our global economy. And, in the context of business growth, respect women as the primary purchasers.