Why She Buys (14 page)

In addition to the social acceptability of living together, higher education is a big driver of this trend. Female college graduates are taking their degrees and putting them to good use in their postcollegiate years. Young women in several American cities including New York, Dallas, Chicago, and Los Angeles are making more money than their male counterparts, which has resulted in all kinds of interesting new wrinkles in the relations between the sexes, especially for dating couples.
¹⁵
It’s a new situation for young women, in which their mothers cannot usually provide much advice.

From homes to fine furniture, single women are no longer waiting to buy all the things that used to be expected of their future Prince Charmings. They buy cars. Diamonds.
Vacations. Mutual funds. Power tools. And more than ever, they’re buying homes. Single women are the fastest-growing demographic in the U.S. real estate market. As noted in
Chapter 1
, they now buy 20 percent of all homes.
¹⁶

All over the world, young urban women are driving trends in luxury, fashion, and design, and brands as established as Lincoln Mercury are starting to employ young women to design their cars of the future.

The trend shows no sign of abating. Women earn the majority of bachelor’s and associate’s degrees in the United States and have done so for almost twenty years.
¹⁷
It’s not just an American phenomenon; in most developed countries, more women than men go to university.
¹⁸
In the United States, women earn 57 percent of bachelor’s degrees and 59 percent of master’s degrees, and they account for 51 percent of students enrolled in medical school, as well as nearly half of those enrolled in law school.
¹⁹
This is the primary reason that women’s spending power and workforce participation are predicted to increase for the next several decades. Better education amounts to better jobs, better pay, and better financial security.

After earning their degrees, women often spend the next several years single while they establish their careers. It’s during this time of life that they start spending serious money on themselves.

It’s surprising how many industries underestimate the buying power of young women. Too many salespeople haven’t accepted the idea that single women can and do buy big-ticket items such as cars and houses, so they often don’t take this sales opportunity seriously. Or, worse, they try to take advantage of what seems like a vulnerability. Single women still feel they must resort to the age-old trick of
bringing a male friend or relative along with them for high-cost purchases, to guard against being taken advantage of. This extra effort and inconvenience ensure that sales are regularly being lost. Industries ranging from luxury goods to automobiles to housing must get wise to the power of the young female consumer. Not only should she be taken seriously, she should be catered to seriously. Just because she’s wearing a ponytail doesn’t mean she’s not earning a big, fat paycheck.

Stereotypes are slow to die. It seems there’s never a news story about single women without an accompanying photo of Carrie Bradshaw, the character on
Sex and the City
played by Sarah Jessica Parker. Carrie’s character became the Mary Tyler Moore for the millennium: the poster girl for the modern single female. Emotionally, the Carrie character struck a major chord with women around the world. But from a consumer-spending standpoint, Carrie Bradshaw was all hat and no cattle. In the show, Carrie only bought expensive shoes, cocktails, and accessories that no real Manhattan-based freelance writer could ever afford. Real single women are making a much bigger impact.

What insights can you take from these data?

• Young women buy big-ticket items and business-to-business services
.

What’s needed is coaching for salespeople to treat them seriously and to speak to these women in a way that connects with them. As one twenty-two-year-old working woman recounted to me, “When I called Firestone to check on my car, the guy at the other end of the line asked if I could put my dad on the phone so he could explain what was wrong—even though the car is mine, and my
dad lives fifteen hundred miles away and has nothing to do with it.”

Hiring more women as salespeople would help solve part of the problem. For instance, only about 10 percent of all automotive sales representatives are women, which doesn’t remotely reflect the diversity of the automotive customer base, and has the added side effect of making you feel like you have to set your watch back to 1972 when you step into a dealership.

• Young single women are high-frequency entertainment consumers
.

Wherever you can find a chilled chardonnay or a fruity drink, look for the women out in packs, having a laugh and talking about every detail of their lives.

There’s a huge opportunity for the development of “girlfriend” packages across a variety of industries, most of which still cater to traditional couples and families. Travel is the hottest example. “Girlfriend getaways” are the biggest thing going, and they’ve spawned both a magazine and a website of the same name. A study from the American Automobile Association shows that 24 percent of American women have taken a girlfriend getaway with female family and friends in the past three years, and 39 percent of American women plan on taking one in the next three years. This has massive implications for girlfriend packages at restaurants, hotels, retail stores, cultural activities, educational classes, and gyms—basically, everywhere that women go.

Young women can and do spend money on their friends, in the form of birthday parties, gifts, bachelorette parties, bridal showers, cocktails, food, and celebrations
of every stripe. If you can find an easy way to package your product or service as a gift, you may very well find a whole new audience. The ladies need to buy their presents somewhere, and maybe you can help them do it.

•
Women celebrate “girl power” and a new kind of femininity
.

Empowering “girl power” brands aren’t just for kids and preteens anymore. Companies such as Benefit, a cosmetics brand run by two sisters who clearly have a sense of humor, feature products with names like Some Kinda Gorgeous, Dear John, Honey … Snap Out of It!, Bad Gal Blue, and Miss Popularity. Young women are drawn to Benefit’s kitschy, retro, girly messages. It’s empowerment sold with a wink, as personified by Reese Witherspoon’s character, Elle Woods, in the movie
Legally Blonde
. These gals may be carrying a pink Hello Kitty bag, but they’re doing it in an ironic way … because hey, they’re in law school!

•
Women notice when companies talk to them
.

Changing perceptions of categories that were once the domain of couples is important. The much-heralded campaign promoting diamond rings for the right hand is one of the best examples of how to sell luxury with an empowerment message. The Diamond Trading company, a part of De Beers, famously created a marketing campaign that told women they didn’t need a man to deserve a diamond, and that they should buy one for their right hand. It was a strategy as brilliant as a shiny, two-carat rock.

Citibank also gets kudos for its clever “Women and Company” campaigns, which appeal to a female target
audience with messages such as “Small loans for big girls.” Citibank effectively juxtaposes witty language with a serious message.

GLOBAL TREND #3

Lower Birthrates Mean Fewer Kids but More “Stuff”

Ah, to be a kid again … 
just to get all that stuff!

Even though birthrates have gone down all over the industrialized world, as well as in many developing countries, parents spend money on kids and babies like never before. The U.S. market for juvenile products is about $9 billion annually, which is more than double the figure from 1995.
²⁰
Kids are on the receiving end of more goodies than people ever could have imagined fifty years ago. Yet take a look at the size of the shrinking American household over the years:

It’s ironic that in America we’re living in much bigger homes crammed with so much more stuff—and rental storage units for the overflow—and yet so many fewer people. It will be interesting to see if the lingering effects of the bad economy include a return to smaller spaces, with the accompanying smaller mortgages.

For most adults, kids have become a lifestyle choice. According to the U.S. Census, nearly half of all women of childbearing age—44 percent—have no children.
²²
The percentage
of American women having only one child has more than doubled in twenty years, to almost one-quarter. And while U.S. Census data show that we might be at the beginning of an upswing in the number of kids people are choosing to have (in 2006 the nation’s total fertility rate was above replacement levels for the first time since 1971), the average American woman is still predicted to have two kids in her lifetime. This is a relatively high number when compared to the rest of the developed world. Japan (1.2 kids per woman) and Italy (1.3 per woman) are two of the countries with the lowest birthrates, and their governments are scrambling to find ways to reverse the trend. Even countries with historically large families are seeing lowering fertility rates. Mexico, for instance, has a fertility rate of 2.3 children per woman.
²³

There are as many reasons for small families as there are parents. Some women get married so late in life they find they can’t have many biological children; others decide that having just one means their child will have the best of everything; and still others believe that having a singleton is the only way they can manage both work and family life well. And then, of course, there are many women and men who simply prefer not to have children because they enjoy the freedom childlessness offers. We are lucky to have a choice; in China, the one-child policy created in 1979 still stands, though it’s often waived for many people in rural areas and ignored by those who have enough money to pay the fines instead.

Across the world, parents are lavishing more time, attention, and money on their precious few children. From the phenomenon of the “little emperors” in China—the moniker for indulged only children—to American tots cruising
around in $850 Bugaboo strollers, middle- and upper-class babies have never had it better. And not only do today’s children get more stuff, they have a fundamentally different relationship with their parents, benefiting from the time, attention, and opportunities that a child who is one of six can’t command.

Whether it’s your local Starbucks, fine restaurants, boutiques, and even bars—parents bring their kids
everywhere
. And when their kids get older, many parents are so involved in their children’s lives that some schools are forced to adopt policies that limit the amount of time they can spend in their child’s classrooms. By having fewer children, parents put all their eggs in fewer baskets, and they’re determined to make sure they hatch with every possible advantage.

The modern appetite to lavish children with the best that money can buy is creating entirely new industries. From high-end children’s party-planning companies to the entire spectrum of designer baby products, such as Kate Spade diaper bags and Baby Dior dresses, the global economy is benefiting from an exciting new customer base who used to be clad in nothing more than cloth diapers, Garanimals, and Sears Toughskins.

What insights can your business take from these data?

• Mothers are older, wealthier, and more educated than at any other time in history
.

It’s no longer uncommon to see well-dressed parents in their mid-forties at preschool events. Schools are demanding, and getting, parental involvement on a scale unthinkable back in the old days (when, ironically, parents may have had more free time to get involved).

Many educated women are dropping out of their executive
posts and entering “pro-tirement,” a clever new word that means they are leaving their corporate jobs earlier than expected, for new careers managing their families’ lives. These MBA-, JD-, and even MD-wielding mommies are bringing their Fortune 500 negotiating skills to kindergartens, playgrounds, and PTA meetings across the country, and changing the tone of school and community relationships in affluent areas.