There is a huge business opportunity on the horizon for entrepreneurs, one that represents an underserved marketplace with huge growth potential, and is gender-specific: Women.
Global consulting and accounting giant EY has noted in their report “Women: The next emerging market,” that the global income of women will grow from $13 trillion USD to $18 trillion in the next five years. The Boston Consulting Group projects that by the year 2028 women will control close to 75% of discretionary spending worldwide.
“Over the next decade the impact of women on the global economy – as producers, entrepreneurs, employees and consumers – will be at least as significant as China and India’s respective one-billion-plus populations, if not more so…”
Women-Owned Businesses in the US
American Express reports in its, “The State of women-owned businesses in 2015” that as of 2015, there are an estimated 9.4 million women-owned businesses in the United States, generating nearly $1.5 trillion in revenues and employing over 7.9 million people.
Between 1997 and 2015, when the number of businesses in the United States increased by 51%, the number of women-owned firms increased by 74% –a rate 1½ times the national average. Women-owned firms have added an estimated 340,000 jobs to the US economy since 2007.
But it’s not all good news when it comes to women-owned businesses.
While women—owned firms now account for 30% of all enterprises, and are now growing faster in number and employment than other firms, they employ only 6% of the country’s workforce and contribute just under 4% of businesses revenues.
Despite owning nearly 30% of U.S. businesses, women attract only 5% of the nation’s equity capital. When it comes to first-year funding, women receive 80% less capital than men.
Large Corporations Continue to Miss the Mark with Women
EY also noted that, “women are the next emerging market in the world…yet there is a wide gap between potential and reality.” A large number of products and services targeting women in the US simply don’t meet their needs.
Consider that women make 80% of the household healthcare decisions, but two thirds of them feel misunderstood by healthcare marketers. This is a $1.668 Trillion market in the US alone. Women over the age of 50 control more than half of all discretionary income in the US, but 53% feel ignored by financial services brands.
According to Yankelovich Monitor 84% of women feel misunderstood by investment marketers. There are 5.3 million “high net worth” individuals in the US (investable assets of $1.0 million+) with $20.5 trillion in wealth according to Wealth Insight.
Any wonder why corporate America is missing the mark selling to women?
The Opportunity for Savvy Entrepreneurs Targeting Women
Companies that can really understand what women want and develop products/services that appeal to their buying needs and habits will be better positioned to uncover and leverage these huge market opportunities. One of the biggest differences in marketing to women is building trust and satisfaction.
This means tapping into their needs, using both data and intuition.
Start-ups run by women, targeting women can be uniquely positioned to use big data and take the time to truly understand what women want, then develop and market products that can meet those specific needs.
Nimble start-ups run by tech-savvy women will have an additional advantage as they understand the internet and social media better – a primary source of information for women. This can range from women sharing information via e-mail to social media posts and virtual word-of-mouth recommendations.
As the prestigious think tank Brookings Institute recently observed,
“Female entrepreneurship represents a vast untapped source of innovation, job creation, and economic growth in the developing world.”
However, they went on to say, “Women face greater obstacles in accessing credit, training, networks and information, as well as legal and policy constraints.”
The conclusion? America’s start-up incubators, investors, mentors, educational institutions, politicians and government agencies will continue to lose its strongest leverage in business if they continue to fail at making an effort to empower women.
When will they wake up?