Women, who spend more time online than men, are such powerful drivers of Internet shopping and other commerce on the Web that their loyalty is crucial to consumer company profits, according to a new report.
While they make up 51 percent of the population in the U.S., women control or influence 85 percent of all buying decisions, giving them clout as business moves increasingly into the virtual world, analysts with New York-based Needham & Co. said in the report. They spend about 10 percent more time on the Web than men and make 58 percent of all online purchases, a number that is poised to grow.
“Women are responsible for the primary trends on the Internet right now,” Laura Martin, managing director and senior analyst of the investment banking firm, said in a telephone interview from her office in Pasadena, California.
The report cited Facebook Inc., Twitter Inc. and Pinterest as examples of companies that run social-networking websites where women congregate, and sway each other’s choices about what goods and services to buy. “Sites that put social sharing functionality front and center should have the greatest economic upside,” and those that target women will grow faster, according to the March 5 report.
Women appreciate the expediency of the Internet, and its equality, said Delia Passi, founder of WomenCertified Inc. and former group publisher of Working Woman and Working Mother magazines. Her Hollywood, Florida-based firm, which awards businesses for good service based on women’s recommendations, found in a survey of 4,000 female Internet users that 71 percent have felt slighted at a brick and mortar store and think retailers don’t really care about them.
“The Internet has provided a beautiful solution to shopping,” Passi said.
On the Internet, women dominate nine of the top 11 shopping categories, according to Nielsen. They buy most of the online apparel, travel and books, ceding only computer hardware and auctions to men.
Retail e-commerce grew to a record $161.5 billion last year, up 13 percent from 2010, data from research firm ComScore Inc. show. Martin said that women will be progressively more important to Internet companies, and that understanding how they interact online and why they go to the web in the first place is crucial to marketers and program designers.
“Time is the ultimate scarce resource for women, so time spent on a site becomes a proxy for value created,” according to the report. “Sites that integrate social features should have the greatest economic upside because they can monetize this price/value ratio.”
Women’s power online goes well beyond purchasing, said Martin, who credits them for driving the digital networking phenomenon, boosting the popularity of daily coupon sites and web-based activities such as picture sharing and scrapbooking on sites like Pinterest.
Social media sites are the female “killer app,” with 76 percent of women around the world having visited at least one of them, she said in the report. Facebook attracts 46 million more women than men every month, and 57 percent of users on both Facebook and Twitter are female, according to the report.
Women use the Internet differently than men, spending on average 5.5 hours a week on social sites, 41 percent more time than men. By contrast, men prefer entertainment, media and professional sites such as Hulu, Digg and LinkedIn.
Martin said the statistics are similar in other countries, as most Internet companies and usage habits start in the U.S., and then migrate.
‘Peak Spending Years’
The number of U.S. women aged 30 to 39 will grow at a compound annual rate of 1.24 percent through 2020, while the total population will expand at a rate of just .81 percent. according to a March 6 report by Bank of America Merrill Lynch analysts Lorraine Hutchinson, Paul Alexander and Neil Dutta.
“These women are near their peak spending years and often make a majority of the apparel spending decisions for their families,” the analysts said in the report. “For the equity investor with a core holding in consumer discretionary stocks, screening for companies that cater to women seems like a sensible proposition.”
They’re also better educated, earning about 60 percent of all higher education degrees in the last decade, and closing the gap with men in math and science, they said. “Women already make many of the spending decisions in households, but we expect their power over the purse strings to increase,” Dutta wrote in another report issued the same day.
The global opportunities for Internet-based companies will continue to grow because “women offshore will close the gap with U.S. women’s economic dominance on the web over time,” the analysts said in the Needham report. Boston Consulting Group has called the web a “revolution of, by and for women,” according to the report.
In the U.S. particularly, “no matter how they cut the data, women surface as the lead influencer in the market,” Passi said. “Women cannot be ignored.”