From clothing to cars, 80 percent of consumer purchases are driven by women.
But the idea of getting more for your money takes on a much larger meaning when women spend intentionally, by directing those dollars to companies whose values and practices line up with their world view.
“We know women control most of the household spending, and that increases with age," says Angie O'Leary, head of Wealth Planning at RBC Wealth Management-U.S. “There's a lot of power in making decisions about how you spend that money. That's a way for women to vote for causes or organizations or products they believe in."
Nearly half of women are the primary breadwinners in their household, an almost four-fold increase since 1960. And the number of wealthy women is growing twice as fast as the number of wealthy men, as Baby Boomers age and women enjoy longer life expectancy.
Still, plenty of companies continue to aim their marketing messages mainly at men, “even though women are doing most of the buying," O'Leary says. And it's not just older women exuding financial confidence and yielding purchasing power.
“Younger generations of women are putting off marriage, which means they are making larger purchases, including homes, cars and other big-ticket items, largely on their own...without a partner in the decision-making process," O'Leary says. “You look at my generation — the Baby Boomers — we got married right out of college and we had $500 to our name. It's a very different story today."
Women often spend to support causes and products they value. Keep reading to understand how your business could benefit from a more targeted marketing plan.
The individual buying choices women make have a significant impact on the economy, and there's often more on their minds than quality and style when evaluating what products to buy.
Just under half of Baby Boomers and one-third of Millennials align their spending with causes they care about, according to a study of high-net-worth women and men conducted by The Economist Intelligence Unit, sponsored by RBC Wealth Management. And women are a force behind that trend.
O'Leary says some women take a hard look at whether businesses are committed to the causes close to their hearts — such as practicing sustainability, treating employees fairly or promoting women to leadership — before they make a purchase.
These decisions are made easier thanks to the wealth of information available online and via social media, which allows savvy consumers to distinguish between those companies that merely pay lip service and those that stand behind their values.
“A company's purpose must exist in practice, beyond its advertising messages, and it should be easy for consumers to see," O'Leary says.
If your marketing strategy excludes certain social responsibilities, you could be excluding women from your target audience.
Women desire social responsibility from brands, and they appreciate a brand's effort to address social problems in their local communities.
An example of how to attract women consumers comes from SheEO, a Toronto-based nonprofit that promotes social responsibility programs by providing backing to female entrepreneurs.
To address a specific problem, founder Vicki Saunders created a unique business model to support female founders who, as statistics show, experience more difficulty finding funding. SheEO operates on what Saunders calls “radical generosity."
In each region where the organization operates, SheEO recruits groups of 500 women who each donate $1,100 to a fund. The fund makes zero-interest loans to five companies founded and run by women.
Instead of going back to the investors, the money gets reinvested into the fund and loaned out again to new ventures — which is also what makes it “radical" in the financing world.
Saunders, a self-described serial entrepreneur, has started and grown a handful of successful business ventures of her own across Europe, Canada and Silicon Valley.
“I've become so enamored with the ability to notice problems in the world and then come up with creative solutions and persevere to figure out how to solve them. People who are out there doing things like that are my kind of people," she says.
More women are taking a problem-solving approach not only to spending but also to their investment portfolio, looking to a growing category of responsible investment options that weigh environmental, social and governance factors, alongside more traditional financial concerns and goals.
Two-thirds of women believe they have more opportunity to tackle societal issues through impact investing, compared with 56 percent of men, according to a study of high-net-worth women and men conducted by The Economist Intelligence Unit, sponsored by RBC Wealth Management.
Women know "you can do well for yourself and you can do well for society. You don't necessarily have to choose," Senne says. “If you can be on par with other investment options but also have an impact, why wouldn't you?"
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This article is a republication of content originally published by RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC. © 2020, Royal Bank of Canada, used with permission. This article may not be reproduced, distributed or further published by any person without the written consent of RBC Wealth Management. Please cite source when quoting.