Sarah Blakey had one of those “ah ha” moments after buying an expensive pair of white pants. She had a problem many women struggle with, hiding underwear lines. So she designed a line of shapewear for women made of elastic material that tightens and smooths everything under your clothing. As a result of her quest for a solution, Spanx was born.
The idea part for Spanx was easy. Pitching the product to manufacturers was the real challenge. Blakey ran into a common problem faced by women entrepreneurs: mostly men decisionmakers who don’t fundamentally understand the pain points that products and services for women are trying to solve.
When Blakey was trying to create a prototype, all the hosiery mills and factories she approached turned her away. The men running the mills and factories simply didn’t understand her idea. Finally, a manager at one manufacturing plant called her back, but only after running the idea by his daughters. It was a good decision. Today, Spanx is a well-known brand that is worth about $1 billion.
A decidedly patriarchal hierarchy has sometimes made it too difficult for women with good ideas to gain traction. As a result, many products and services that find their way to market often don’t explicitly address the needs and wants of women consumers.
Understanding market opportunities
Failing to understand what women consumers need and want can be costly. After all, women control 85 percent of consumer spending in the U.S. today and, in the next decade, two-thirds of consumer wealth in the U.S. will be in the hands of women.
This isn’t just a consumer problem. Venture firms that fail to invest in companies started by women and other underrepresented minorities risk losing out on as much as $4 trillion. VC investment in founding teams of only women was $3.3 billion in 2019, representing just 2.8 percent of capital invested across the U.S. startup ecosystem. Woman-founded and mixed-gender teams raised just $17.2 billion in 2019. While slightly better, that’s only 11.5 percent of VC investments.
Women are getting short-changed
Not only are women’s pain points often overlooked in today’s marketplace, but they are also unfairly taxed. Women spend $1,300 more annually on the same products as men because of the so-called “pink tax.” The pink tax refers to the fact that products and services aimed at women and girls -- from personal hygiene products to dry cleaning -- cost on average 7 percent more than comparable products for men and boys.
In addition to the pink tax, women also pay a tampon tax, which is estimated to amount to an additional expense of $150 million annually for women. Menstrual products, a basic necessity for many women, are often taxed, while other necessities -- such as lip balms, condoms, and dandruff shampoo -- are not.
What’s more, the depiction of menstruation in advertising has historically been downplayed, even though 26 percent of the global population menstruates every month. Traditionally, menstrual blood in advertising campaigns has always been depicted by a weird, blue color. But that’s beginning to change. Pantone, for example, launched “period” red as part of its color lineup to remove the stigma surrounding menstruation.
Women entrepreneurs struggle to raise capital because there is a lack of representation on the other side of the table. In fact, less than 10 percent of decision-makers at U.S. venture capital firms are women.
Pain can equal gain
On the positive side, pain points -- like sizing -- need solutions. For example, in retail, standardized sizing often makes it difficult for women to find clothing that truly fits their individual body types. As a result, 80 percent of women are walking around wearing the wrong bra size and sizing is the top reason people return clothing purchased online. While it’s easier for manufacturers to produce standardized sizes, they often aren’t a good fit for women. That means opportunities for entrepreneurs. ThirdLove, for instance, has started to disrupt the bra market by introducing half sizes.
Some companies are also challenging the notion of standardized sizing because it’s a smart business decision. Companies like Levi Strauss believe the traditional sizing model will soon disappear and are using technology to replace traditional manufacturing methods -- another opportunity for entrepreneurs.
In fact, both startups and established enterprises can profit from developing products and services that better align with what women need -- from personal hygiene products to clothing. Women entrepreneurs, in particular, have an opportunity to deliver solutions that will meet the needs of the marketplace. While that requires support and financing from a world of still male-dominated companies and VCs, the potential pay-off is there for everyone.