How Do You Boost Spending? Make the Lady Happy
As President Barack Obama takes to the airwaves Thursday night to talk about jobs, he may want to keep this in mind: How do soothe the jagged nerves of a nation?
Time and time again, the conversation keeps coming back to consumer confidence. We're locked in a standoff where businesses say there isn't enough demand to hire more and consumers say they aren't spending because they're worried about their jobs.
Throwing more support behind the argument that consumers are fearful, and that fear is hurting spending, is a new survey conducted byBoston Consulting Group that found more American women, especially professional women, are feeling insecure about their finances. This is key because women do the bulk of the spending, and consumer spending accounts for about 70 percent of the U.S. economy's growth.
One third of the 1,000 women BCG polled said they do not feel financially secure at all, while 13 percent say they feel very financially secure.
"The Great Recession hit men hard in the job market and they lost 85 percent of the jobs," said Michael Silverstein, a BCG senior partner and consumer behavior expert. "Although women didn't suffer the job losses that men did during the recession, more than half report being anxious about the future and cite difficulties managing their household finances," he said.
This is a stark contrast with 2008, when BCG last asked women this question. At that time, most women said a lack of time is their biggest source of stress. Now, 57 percent of women say they are most concerned about managing household finances.
They're also worried about whether they will have enough money in retirement and are anxious about their future—two concerns that are also tied to finances. All of this trumps time-management fears. No doubt, these women still have the same kinds of pressures on their time, but money matters more.
Compared with men, women are 21 percent more likely to feel anxious about the future, and 44 percent more likely to say they feel a great deal of stress in their lives.
This emotion has serious implications for consumer spending. According to BCG, 60 percent of the professional women surveyed said they control 70 percent of their household's spending.
According to BCG's survey, 57 percent of the women said they have reduced their discretionary spending over the past year, and 38 percent said they plan on cutting their spending over the coming year.
And perhaps proving this out, we've already seen signs of that in recent reports from retailers that women are cutting back.Retailers such as Cato and Ann, that cater to women, have seen slowing sales in recent months.