Canadian Women Consumers
Part Three of a Three-Part Series

• The Turning Point: The moment that transforms Canadian women consumers
• Who are Canada’s most powerful female consumers?
• Brand vs. Price
• Income vs. Needs Spending

As Canadian women move from youth to adult to mature adult, they are faced with many choices and opportunities to shape unique lives. Yet the MasterCard MasterIndex
research finds that while there is great diversity among individuals, Canadian women as consumers follow common patterns of spending attitudes and behaviours as they move through distinct life stages.

Through the first two life stages – young and not working full-time (Emerging Consumers), and young and working full-time (New Earners) – Canadian women gradually evolve in their consumer behaviour as personal incomes rise and independence is secured. For the 61 per cent of women who assume full- or part-time work, they become increasingly active consumers in the marketplace, more willing to pay for brand names, spending significantly and spending more as their income rises.
 
But the next major life stage threshold is not a gradual, evolutionary change. In fact, it is a turning point that radically alters women’s roles as consumers. That turning point is having children.

For Canadian women with children, evolving from young and independent women to “Moms” radically impacts their consumer behaviour and attitudes. And considering they are among the largest groups (30%) in the women life stages, the impact of these changes is felt strongly in the marketplace.

From Independent Spender to Household Manager
At the heart of the significant change that happens to women when they become Moms is the transformation from independent consumers with growing personal means to that of spending managers of their households with significantly increased costs and obligations.

Ninety-six per cent of Moms have direct responsibility for household financial management: 63% on their own and 33% together with their partner or spouse. And
while many embrace the role (47% report that they enjoy managing the finances), it has major impact on their spending behaviour and outlook.

With the transition to motherhood, confidence in their personal financial situation plunges. Despite a general rise in household income, half (51%) of Moms report being
“not very” or “not at all satisfied” with their personal financial situation compared to 39% when they are New Earners. Financial concern carries on even after children are older with 52% of The Established still reporting financial concern.

Price Shopping
Canadian women in general show a preference for a good price (72%) over a specific brand (28%). Younger segments are more likely to pay more for a preferred brand: 30 per cent of Emerging Consumers and 36 per cent of New Earners.

With the advent of motherhood, that trend reverses. Moms significantly overindex for price orientation as 80 per cent of Moms report that a good price is most important and only 20 per cent say they are willing to pay more for a specific brand.

Spending Obligations vs. Opportunities
The drivers of spending behaviour in Moms shift from income to costs. In the younger generation, spending increases are explained by access to higher personal income. Seventeen per cent of the Emerging Consumers and 31 per cent of the New Earners say their spending increases are driven by a rise in personal income – the single most dominant reason for this spending change. In other words, they’re spending it because they’ve got it.

For Moms, increased spending is forced by costs – increased cost of living (20%), child-related (13%) and baby-related costs (18%). In this case, they’re spending it because they have to.

This is a significant change in spending dynamic as women with children are more likely to be spending out of obligation than personal initiative. That means the Mom that is roaming the grocery aisle or the shoe department is a much different creature than the
consumer she was before she had children. She is trying to meet obligations while balancing budgets and competing spending priorities. And she is no longer just shopping for herself but has become the procurement officer for her household.

The spending categories where Moms are most likely to report spending increases are food (65%), transportation (59%), clothing (53%), and child care and children’s activities (48%). All are logical costs associated with children and growing households.

By comparison, for New Earners, spending increases were most likely to occur in transportation (57%), Internet/ phone costs (51%), food (49%), clothing (49%), shelter/housing/rent (47% report increases), and home décor (45%). All costs associated with establishing an independent lifestyle.

Moms as Power Consumers
Looking at everyday purchase categories, Canadian Moms are powering increased spending in the categories of:

• Grocery stores/ supermarket (69% report increases, 10% above the average among all women consumers);
• Convenience stories (25% increase vs. the 21% average); and
• Video rentals (23% increase vs. 16% average).

Indulgences
Across the various life stages, food and restaurants, clothing and shoe purchases dominate Canadian women’s preferred spending indulgences. This is where discretionary spending will most likely go when women have it.

But for Moms, simpler, less expensive indulgences also increase in appeal – a coffee in the morning (9%) and magazines and books (8%).

Where is She?
Canadian Moms are most likely to say they regularly shop at retail chain stores (45%). They are also the female consumers most likely to be found at big box stores. Sixty-four
per cent shop there regularly or occasionally vs. 55 per cent of women overall.

Moms are least likely to shop online; only three per cent report regularly spending online. Orientation to online retailers aligns with age. Twenty-five per cent of Emerging Consumers and 29 per cent of New Earners regularly or occasionally shop online vs. 20 per cent of Moms, 22 per cent of The Established, and 16 per cent of Silver Spenders.

Many marketers believe that a category of young working women, who are purchasing homes or condos independently (and thereby inheriting all the associated costs of owning a home), may in fact represent Canada’s most powerful female consumers. Similarly, there is ongoing interest in the real and diverse experience of Moms and how they are influencing household spending. Yet, based on allocation of marketing dollars, many believe the answer lies with The Established group of women whose children are older than 18 and many of which have left home, or possibly even the Silver Spenders.
Both being more advanced in their careers, and therefore having access to more disposable income.

Examining the research from the MasterCard MasterIndex provides evidence to identify the life stage responsible for driving consumer spending activity in key categories:
New Earners.

Our definition of the New Earners includes the provision that all members of this life stage are working full-time. This is a meaningful point when compared to the fact that
only 42 per cent of Moms, 51 per cent of The Established and 26 per cent of Silver Spenders are employed full-time. Simply put, working full-time equates to more disposable income. And in fact, more than one third (36%) of New Earners have a total household income of $75,000 or greater. This compares to the national average of 25 per cent.

Perhaps the greatest evidence to support the spending power of the New Earners is the fact that more than half (53%) report their spending has increased when compared to the previous year —higher than the national average of 43 per cent. One third (31%) of New Earners feel their spending has increased significantly because they are earning more, and therefore have more money to spend. Emerging Consumers (17%) also said higher income was their top reason for increased spending.
 
Alternatively, Moms (30%) and Silver Spenders (20%) say the higher cost of living was the primary reason for their increase in spending — a stark contrast to New Earners whose spending is driven by greater income and not needs.

Spending by Category
Respondents were also asked to indicate their level of spending on a number of household costs. Spending on big ticket items such as housing, household furnishings/
appliances, and vacations increased the most for New Earners. Specifically:

• Housing: 47 per cent of New Earners indicated an increase in spending on housing while the older segments (Moms, The Established, Silver Spenders) had no change to their shelter/housing/rent expenses since the previous year.

• Household furnishing and appliances: 41 per cent of New Earners indicated an increase, while most other categories were relatively flat with respect to spending in this category.

• Vacations: more than one third (35%) of New Earners report an increase in spending on vacations over the past year. Surprisingly, The Established only  indicated a 22 per cent increase in spending on vacations.

The increase in spending was also greatest for New Earners for a number of consumables:

• Home décor (45%);
• Telephone/ Internet communication (51%);
• Personal care items (40%);
• Alcoholic beverages/ tobacco (31%) and
• Entertainment (40%).

It should be noted that Emerging Consumers were a close second for a number of these categories.

Additionally, the increase in spending for the New Earners was second only to Moms in the following categories:

• Transportation (57% versus 59%);
• Recreational items (33% versus 36%) and
• Clothing (49% versus 53%).

Compared with all other women, New Earners also indicated the highest increase in gifts, donations and charitable contributions.

Overall, the most significant increases in spending per category, when compared to last year, were found in the New Earners life stage for nine of the 19 total key spending categories.

Seven in ten (72%) women say that a good price is more important than a particular brand when shopping for themselves. Compared to any other segment however, New Earners are more likely to say they are willing to pay more for a particular brand when shopping for themselves (36%), while only 20 per cent of Moms gave this response.

Three in 10 women (31%) are willing to pay more for a particular brand when shopping for their household. This also holds true for New Earners (32%). Like all the life stages, Moms are more likely to say that a good price is more important than a particular brand (68%).

Spending by New Earners is driven by income: they have more purchasing power and they are using it to furnish new homes and condos, keep up with the latest fashion
trends, and splurge on entertainment activities such as dining out and going to the theatre.

By comparison, spending by Moms is driven by needs: higher education costs, daycare, food, clothing (but not for themselves!), which may explain why only 50 per cent of Moms are satisfied with their personal financial situation.

Just under six in 10 (58%) Canadian women consider themselves to be spenders versus savers. Once again, New Earners differ significantly when compared to the
overall response – with 69 per cent indicating they are more likely be spenders. The opposite is true for Silver Spenders where nearly half (47%) report being a saver.

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