Girl Financial Power

For the first time, women account for almost half the millionaires in the UK. What makes it surprising is that the number is growing by a hefty 11% per year, which means that women will overtake men within a very short time frame.

These startling statistics come from research company Datamonitor. It found there are almost 380,000 millionaires in Britain and that now 46% of them         are women. Contributing to this big upswing in wealth among women is the growth in the number of female entrepreneurs who have set up their own businesses - well away from any glass ceilings and obstacles that might exist    in established organisations.

It is this trend that has resulted in the big increase in the number of women in the Sunday Times Rich List for 2007. Among the 1,000 rich individuals listed in the table the number of women has grown by 20% since last year - to a record 92 entries. And this is despite the higher entry threshold compared with 2006.

Although there is no disputing the fact that the very richest among them have acquired their wealth through inheritance or from being the wives of rich husbands (or the ex-wives of rich husbands) the list is peppered with an increasing number who have built up their fortunes independently through the creation of their own successful organisations.

Proof of this trend can be seen from the entries in the most recent Management Today annual list of the top 100 entrepreneurs. Whereas in previous years the female quotient would have been pretty dismal, it is now looking reasonably healthy. Women now account for 25% of the entries on the list.

And the wealth that these women have in their grasp is growing at a faster rate than that held by men, according to Datamonitor. It found the differential between female millionaires and their male counterparts is narrowing.

Go back 10 years and the average male millionaire was worth £2.7m, while the average female was worth £1.3m. Today, the former is worth an average £3m while the latter typically has around £2m. The gap between the two has fallen by almost 31% - which means the wealth of a male millionaire has increased by only 9.1% over this period, whereas the female millionaire has seen their fortune grow by an impressive 54%.

This rapidly growing wealth in the hands of the female demographic has major ramifications for consumer spending patterns. It is the reason we are starting to see a gradual skewing by many companies of their marketing and branding efforts to attract greater numbers of female consumers.

In the retail industry, it has been noticeable that companies selling certain products have started to 'feminise' their offers. Yes, women have for a long time effectively controlled the high street but in recent years they have extended their dominance beyond the obvious products such as fashion and clothing. This is certainly the belief of Allegra Strategies. They reckon women account for at least 80% of consumers in home ware shops.

To tap into this trend the DIY and home wares retailers have re-jigged their offers to better highlight lifestyle concepts rather than focusing on selling individual products. This strategy has been remarkably successful for IKEA, with women finding its 'complete room solutions' very attractive. IKEA realised that DIY was a turn-off for women and it made the savvy decision to sell its goods via a shop-fit that incorporated many show home-style displays.

This is an approach that B&Q has only recently begun to replicate in the UK. Although why it has taken it so long to catch on is a mystery. Both Homebase and MFI have also followed this route. The new private equity owners of the latter decided to pitch the business as a much 'softer' proposition. Evidence of this move was its high profile sponsorship of the Hell's Kitchen TV series.

The softer proposition is also being gradually introduced into the formerly stuffy world of private banking and finance. Banks like Coutts recognise the importance of convincing today's army of affluent women to deposit their money with the bank.

Such a move is hardly surprising when you consider Datamonitor's results. They found as many as 4,000 women could be classified among the richest people in the country on the basis that they have liquid assets of more than £5m.

One move Coutts has undertaken to woo these potential clients is to align itself with fashion brands. Its most radical initiative to date was its sponsorship of a retrospective of the 10-year career of fashion designer Matthew Williamson. It is also hosting an event in its gardens that will bring together Williamson's ready-to-wear range and the bank's female clients.

This sort of female-friendly event is also being mirrored in the world of corporate hospitality. There is a shift away from companies hosting events that are appealing only to men - namely invites to major sporting events.

Matilda Velevitch, head of marketing at event organiser Pall Mall, reckons that around 50% of corporate hospitality events now involve sport, compared with nearer 80% five or six years ago.

Although she accepts it is difficult to avoid football events from August to May (during the football season) Velevitch suggests things are changing. Many events are now being designed to suit both sexes. "This had been completely overlooked in the past and it tended to be just spa days. But who wants to be in a hot tub with your clients?" she asks.

Away from the hot tubs, women are also flexing their financial muscle on the leisure sector. It is they who have been increasingly making the decisions on where to eat out - and who pays the bills. This has led to the creation of female-focused eateries and family-friendly restaurants such as Giraffe and Pizza Express. They cater for women who have children but are unwilling to miss out on participating in a meal.

Feminisation is also having an effect on the drinks industry with the emergence of a whole new drinks category targeted at women - RTDs (Ready-to-Drink). These are predominantly vodka or gin-based concoctions with mixers included. The increase in women drinking has also played its part in the renaissance of cider. The 'over-ice' phenomenon of the Magners brand last summer was equally fuelled by both men and women.

Many drinking establishments have also undergone a makeover in recent years to better accommodate this new army of drinkers. Go back to 1994 in Sutton, Surrey, and it was pretty revolutionary when the first All Bar One bar opened for business. Its large windows, extensive wine list, shift away from drinking standing up, and focus on food was a radical move in the industry. Today this type of outlet is commonplace around the UK, and has been used as the template for many copy-cat concepts.

Such has been the impact on the pub and bar industry that the old style, predominantly male-oriented boozer has sadly become something of a thing of the past. While such outlets have undoubtedly been adversely impacted by the recent smoking ban and the increasing focus on food, we cannot diminish the effect that women have had on their slow death.

Ever-greater numbers of women frequenting the growing number of female-friendly drinking joints have then not surprisingly become magnets for young male drinkers. This has greatly contributed to the demise of the male-drinking establishments of old.

One of the downsides of the increased focus on attracting women into pubs and bars is the worrying surge in alcohol abuse among women. Anecdotal evidence suggests women contribute just as much to the Friday and Saturday night binge-drinking culture in the UK as their male counterparts.

This is not the only vice that women with money have been attracted to. Gambling is proving to be an equally appealing channel through which they are willing to spend their new-found wealth. The National Lottery undoubtedly played a significant part in opening up gambling to a much broader market. It is the internet however, that has proven to be the ideal channel through which they can participate in gambling. Not for them the smoky male-oriented bookmakers' shops and down-market bingo halls. Instead, they have the comfort of their own home - with a glass of Pinot Grigio to hand - and the safety of anonymity.

Such has been the move online by women within the 25 to 35 bracket in recent years that they now spend 20% more time online than men, according to Ofcom. In April 2.18m women in this age bracket used the internet during April, compared with 1.83m men in the same age group.

In addition to gambling, the move online is being driven by shopping. And this is to a surprisingly diverse array of online stores. Consider that online gadget retailer Firebox.com has historically targeted technology-savvy young men. Its managing director recently informed me that its sales have increasingly skewed towards women, and that its turnover is now split 50:50 between the sexes.

The social networking phenomenon is also driving women online. Only last        week Mothercare chief executive Ben Gordon announced at a conference that the company would be launching its own social networking domain to tap into this phenomenon.

This move by Mothercare was met with a slightly dismissive response from some individuals at the conference, but it is just this sort of forward-thinking initiative that will mark out the winners and losers in the future. To fail to adapt to the fundamental shift in spending power from men to women would be nothing short of suicidal.

Regards,

Glynn Davis
For The Daily Reckoning

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