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
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:
- 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.
- 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.
- 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.
- 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.
- Women are aging, which increases demand for financial services like RATE.
Joanne, have you ever imagined a world in which the balance has shifted the other way and women have taken over and men are relegated to the background?That’s not impossible. Prehistoric times required physical force to lead . Now it’s intellectual/emotional power that’s required.In any case, that’s a great plot line for a movie.
I am reading the book Dietland right now. There is a revolt in the book against sexual advertising and more that displays women. The mags are forced to swap that out for men. It changes the game. Sales go down. There is much more but it is an interesting look at what would happen if the tables were flipped.
Do another blog post about Dietland and your thoughts when you are finished. Would be interested in hearing more.
Change is certainly afoot, I just wish it would go faster. Often it feels like progress only happens when one crotchety old generation dies out and another can replace it.
The wage thing is sort of a specious statistic. What I mean is that it’s an aggregate one. Many women make choices in their life because of family that cause them to accept lower wages as a tradeoff. Additionally, many women in that stat are doing menial jobs (maids etc) that men usually don’t do-and since they are paid less than a menial job that men might traditionally do (laborer), it skews the stat.
Thanks for sharing this data. Does that college stat say what I think it says? More women go to college?I’m with you in the optimism camp. I think we’re setting up for a moment of big shifting (albeit with all the pain and unpleasantness that comes along with that). But I think we’re going to see an accelerated rate of change in the coming years that will result in a more equal life for women.
Yes more women go to college.I agree with you. We are in accelerator mode
what is the financial services “RATE”? Never heard of it.. but curious
Shoot me but I think there is honestly more happening than is paid attention to.When I look at companies like BluePrint or Soul Cycle, these are companies that have created serious economic trends, created wealth, changed things around.Point–there are more heroes out there that could create more awareness that indeed women are just doing it and changing the world every day.Ain’t enough but this is a gap that will close sooner than we think.