ROI of women

I have read many articles about the impact of women in businesses, women-led businesses and of course women in general.  Someone asked me the other day if change is afoot.  I said if we are having the conversation then something is happening.  We weren’t even talking about the frustration of women entrepreneurs and women in business a decade ago like we are today.

The frustrations can be the same as men when growing a business but not when it comes to raising capital or someone being dismissive about taking time out for a family, or getting pregnant or the sexual comments that get made time and time again in a meeting.  As an optimist I feeling good about the future of women in business.

I have said several times that when more women take a company public, sell their companies and become household names because of that, things will change.  There are plenty of women entrepreneurs coming up the pike who are going to get there and that will change everything for the next generation of women.

One woman that I invested in a few years ago who is an incredibly determined driven entrepreneur sent me this information yesterday.  It is really interesting and also not surprising.  More than anything it was good to see written by someone in black and white by someone who is an analyst.  The information is below.

Women’s Growing Economic Influence

U.S. women accounted for about 47% of total hours worked but only 42% of wages earned in 2013. Despite this, women influenced approximately 80% of U.S. consumer spending in 2013, suggesting nearly a 2x multiplier of earnings vs. purchasing power.  Women’s earnings in the US economy have been growing faster than men’s for the past decade and this trend should continue for the foreseeable future because it is being driven by several trends, including:

• Since 1960, women’s participation in the work force has grown from 35% to 53%.
• Women’s wage gap narrowed from 62% of men’s pay in 1979 to 82% in 2013.
• The disparity between college educated women and men has widened, with 44% of women 18-25 versus 38% of men attending college. College graduates in the US earn $2.1MM over their lifetime, nearly double the $1.1MM earned by the average high school graduate.
• Women are having fewer children, later in life, which keeps them in the full time labor force longer.
• Women’s life expectancies are elongating, reaching 81 years in 2013, 5 years longer than men’s.

Because men in many households turn their paychecks over to women to spend, 80% of women state that they are the primary decision maker for “most” or “all” purchasing decisions. According to a 2013 study, women in the US accounted for 89%-93% of spending in the following categories:

• 93% of Food Decisions
• 93% of OTC Pharmaceuticals Decision
• 92% of Vacations
• 91% of New Home Purchases
• 89% of Bank Accounts

Investment Implications

We are buyers of companies that focus on products and services that target women, especially online time-saving applications. We are most optimistic about social and mobile online alternatives.  In our coverage universe, investment ideas from this work include:

1. Since 2002, women have spent 25% more money in 14% less time, aided by online shopping. This bodes well for online shopping solutions like RATE and TRIP.
2. Women spend more time on social media, and their purchase decisions are highly influenced by their friends. This elevates the value of social sites. We recommend FB.
3. Women use mobile devices more than men, so companies with mostly mobile revenue, like P and FB, should garner more upside as women’s purchasing power grows.
4. Proliferating screens make women harder to reach for advertisers. This should increase the value of NLSN, SCOR and RENT because they measure audiences and find women.
5. Women are aging, which increases demand for financial services like RATE.