Marketing to Women: The Economy Driven By Top 5%

An important article from Wall Street Journal’s The Wealth Report:  U.S. Economy Is Increasingly Tied to the Rich shows how important consumer spending is to the economy, and who is able to spend us out of this post recession malaise.  Here are the facts:

•Consumer spending accounts for tw0-thirds of the U.S. GDP

•5% of Americans by income account for 37% of all consumer spending.  (Not surprising when you understand that top 10% of all income earners account for half of all income.)

•80% by income account for 39.5% of all consumer outlays

The percentage of spending attributed to the wealthy has been growing over the past few years.  According to WSJ, “In the third quarter of 1990, the top 5% accounted for 25% of consumer outlays. That held relatively steady until the mid-1990s, when it started inching up past 30%. It dipped in 2003 and again in 2008, but started surging in 2009 amid the greatest bull market rally in history, with the Dow Jones Industry Average rising nearly 50% in the last nine months of the year.”

It seems that two trends are attributing to this growth – one was the pent-up demand by the wealthy created during the recession, and the second was the middle class and lower groups that have been dealing with mortgage crisis and lingering unemployment.

And as most of you know, this recession has been a Mancession, putting more pressure on the women to keep their jobs and manage the household budgets.

Women now control 60% of all wealth in the United States. Based on research by Allianz Life Insurance Company of North America, American women are better educated, enjoying more successful careers and leading a social and economic shift in American households.

With this new economic power and a tendency to be more conservative in spending, the consumer spending cutbacks can also be attributed to the women’s fear that the recession is not really over.

The Unity Marketing’s Luxury Consumption Index that tracts affluent spending has stalled at 78.3 points in July 2010 as affluent consumers continue to reflect uncertainty about the future of the economy.  One of the key measures of the index shows that 36% of luxury consumers think the country is a whole lot worse off now as compared with three months ago, when only 31% thought we were worse off.

Basically three out of four luxury consumers believe that the recession is not over, and since the women are the spenders, we are going to have to feel more secure to start spending our way out of this monetary malaise.

Marketing to Working Moms: 84% Shopping Online at Work

Shop til we drop maybe becoming shop til we stop –  to work!

According to new research from AOL Advertising with OTX, 40% of women 18-54 include online shopping at work in their multi-tasking activities.

Eighty-four percent of moms tend to shop 15 minutes or more a day while at work.  And not surprising, they say they tend to shop for longer periods of time than non-moms because they have more downtime at work than they do at home.

The chief reason Moms choose to shop online is convenience and time-saving.  And what can prompt them to shop?  Sixty-nine percent say a specific need and some 60% are responding to email offers.

Some really big news is that one in four respond immediately after seeing a “deal” on an email.

Best day to shop online at work?  Fridays!  Half of all women do their shopping between 11 a.m. and 2 p.m.

The news that women take care of personal matters at work is not new.  Some spend as much as two hours a day doing personal errands.   We know that in the frantic race to get kids to school, games, homework, and meals, Moms are stretched.  The only respite in their day may be that lunch hour where they spend time responding to friends, shopping, paying bills, booking vacations and having their hair done.  But before bosses get upset about this time, it seems that 38% of women are working more than 50 hours a week.

For more details on the AOL study, click here.

Marketing to Moms: Is the Recession Over If Moms Are Spending Less on Back-to-School?

2010 Back To School Report Shows Moms Cutting Back on Spending

Well, here it is again.  If the recession is over, why are Moms cutting back on spending for back to school?

Moms say they will cut back, especially when it comes to clothing for kids, according to a new survey of 1,275 moms nationwide by the Marketing to Moms Coalition. Funded by Current Lifestyle Marketing and Weber Shandwick, the survey was conducted in June 2010 and reveals trends among moms of children age 7-17, including both English and Spanish-speaking Hispanic moms.

The 2010 Back to School Report, which analyzed responses from 1,275 moms nationwide with children ages 2 to 17 years, projected that spending is expected to decrease 10% for kids ages 7 to 12 years, and 12% for teenagers ages 13 to 17 years. Overall, moms of 7- to 12-year-olds reported average spending of $440 for 2010, compared with $487 in 2009. Moms of teenagers 13 to 17 years will spend $479, compared with $548 last year.

One of the interesting findings is that Moms are still going to do most of that shopping in retail stores rather than online.  I guess that giddy feeling that we all get when you see a new pad, new markers and notebook never goes away.  And of course, the other thing that never changes –  80% of Moms are glad the kids are going back to school!

Spending on school supplies, such electronics as calculators and school activities likely will remain flat this year, with the biggest cutback coming in clothing, the survey showed.

We have all been there.  When money is tight, Moms know how to conserve.  They tell the kids to use last year’s backpack, we see what clothes from last year can tide them over as school starts and we clean out the old lunchbox.

Moms are just more responsible shoppers.  BIGresearch had a study earlier this year that said that 86.2% of women say the recession is not over.  Some 75% say their spending habits have changed forever.  Half have delayed major purchases and 52% have tapped into savings.

Until Moms start feeling better about the economy, sorry kids, you will keep using last year’s backpack.

Marketing to Moms? Motherhood Happening Later or Not at All

American women are delaying or not having children according to studies from Pew Research Center. These are two interesting trends that Pew Research has reported in new studies out this year.

First-time Moms are older and better educated. Half of mothers surveyed in a new study on the state of motherhood said that parenthood “just happened”. What an interesting statistic! It’s something that I can relate to. My two beautiful and wonderful offspring were not planned; they just happened in the middle of my career and my thirties.   The new study released by the Pew Research Center provides some surprising new information on the Moms of Today, compared with motherhood in 1990.

The Pew study found that new mothers in the U.S. are increasingly older and better educated then they were twenty years ago.  Today, one in seven babies is born to a mother at least 35 years old.  In 2008 there were 4.3 million births in the U.S., compared with 4.2 million in 1990.  The actual number of births has risen every year from 2003 to 2007, when it seem the economy caused a baby bust.  It seems the trend towards older and better educated Moms has to do with careers, advanced education and improvements in medical and fertility care.

More women are choosing to not have a child. According to Pew Research, some one-in-five American women end their childbearing years without having borne a child, compared with one-in-ten in the 1970s.  Among women 40-44, the proportion that has never given birth is 1.9 million women, compared with nearly 580,000 in 1976.  Pew offers up that childlessness has risen in recent decades because social pressure to bear children has diminished for women and the decision to have a child is seen as a personal one.  Certainly job equality and contraceptive methods have factored into this trend.

These two trends are important for marketers.  Too many times marketers tend to portray stereotypes that do not truly identify with their audience.  For those marketing to Moms, there is no one-size- fits-all. For those portraying women in their 40s, it’s certainly must represent the differing lifestyles of women.  Women who have chosen to not have children are extremely sensitive to old social attitudes that assume not having children is about biology and not choice.

Society has changed and marketers must embrace the lifestyles of  strong, well-educated and employed women, both with children and without.

Marketing to Moms: If the Recession is Over, Why Don’t Moms Feel Better?

Well, facts say that the U.S. economy is growing and the recession is officially over, but Moms are not so sure.

According to the February 2010 American Pulse poll from BIGresearch, 84.5 percent of Americans say that the recession is not over.  And, women at 86.2 percent are more pessimistic than men at 82.6 percent.

Key White House economic advisor Larry Summers has an interesting term to describe the way that most of us feel.  He said the U.S. is experiencing a “statistical recovery and a human recession.” While there seems to be some movement in indicators, the truth is families cannot feel really optimistic when unemployment is at 10 percent.

The recession may be taking more of a toll on working moms. In October 2009 Citi found that more than half of the Moms surveyed reported working longer hours and adjusting their spending habits more than other groups.  Seventy-five percent of Moms say their spending habits are forever changed, compared to six in 10 women without children.

Why are working Moms hit harder?

Working women still make less than men.  More women are becoming the family breadwinner.  More men lost jobs during the recession than did women, and currently one in five men are unemployed.  Families are facing higher expenses for a variety of items including education, and budgets were stretched before the recession.

Because Mom is in charge of 80 percent of the household spending, she needs to feel secure to starting spending again.

Research shows that half of Moms with children have delayed big-ticket item purchases and 52 percent said they have tapped into savings to make ends meet.  One in three said they are headed back to school to improve their job skills and job prospects.

At our house, we say “nobody’s happy unless Mama is happy.”  Guess that is true for lots of households this year.