It’s no secret that women control a large share of purchasing power. For example, as noted at the 2009 World Economic Forum Annual Meeting in Davos, women control over 80% of consumer spending. And, as HDTV magazine recently reported, women’s spending on consumer electronics is increasing. This year, the article reveals, “Women spent, on average, $631 on consumer electronics, up $73 from 2009.”
Yet, the consumer electronic retail market has always been a bit male-centric (think man-cave versus family room). In 2005, Julie Gilbert, then a Best Buy vice president, set out to improve the company’s revenue by bringing in more female staff. The success of her WOLF program shows the valuable link between the retention of women employees and the spending power of women consumers.
Best Buy: The Situation
In 2005, an analysis of Best Buy’s customer data revealed that the company was missing out female technology spending – and analysis of store staffing showed a connection. A case study on the program explains:
“Women spent $90 billion on technology in 2005 (approximately 45% of consumer electronics purchases) – but only comprised 36% of Best Buy revenue. In addition, there was data showing that comparative store profits were higher in stores that employed more women: Where the staff was comprised of 5 men for every woman, the comparative store profits were on average 5% higher; when the ratio was 4 to 1, profits were up 7%, and when the ratio was 3 to 1, store profits increased by 10%.”
Stores with more female employees produced more profit. The solution seemed simple – put more women in the stores. But it wasn’t that simple. The case study explains Gilbert’s findings:
“…there was a higher turnover of women than of men in every department. In some cases, the rate of women leaving was more than 200% higher than that of men. Lastly, she looked at the recruitment of women. She noticed that 91% of the women were at ranks below supervisor. No female executives existed in the retail field and the highest ranking woman was a district manager.”
With high female turnover, low female retention, and few women in leadership positions, getting more women into Best Buy stores (both to work and to shop) was going to require more than a simple hiring push.
The WOLF Program
Inspired by the loyalty, cooperation, and collaboration of wolves in the wild, Gilbert named her three part plan WOLF. She explained:
“I built the business plan the next day, focusing on building this innovation movement and targeting three business metrics that would remain valid: (1) female revenue, (2) internal female retention, and (3) internal female recruitment. I knew that there was something there. …As any entrepreneur would, I just went ahead and started talking about my vision of a new day – inside the company – and the architecture I was building to make it happen for women.”
The first part of her program was the organization of WOLF Packs. According to the case study, “Each pack consisted of 25 female and 2 male Best Buy employees with an 80% representation from retail and 20% from corporate.” This would enable members of the retail and corporate environments to gain better understanding of each others the motivations and requirements.
As the program grew, Gilbert introduced WOLF Omega teams: “women who did not work for the company (in effect, female consumers) – to help reinvent the company in partnership with the company’s female employees.” The teams also collaborated with Best Buy staff to create community outreach programs and events.
Measuring WOLF Results
By all accounts the WOLF program has been a success for Best Buy. In addition to increasing female leadership, the case study explains, “Revenue generated by females increased by more than $4.4 billion in less than five years; female market share increased from Q1 2006: 14.7% to Q1 2008: 17.1%” and “Female turnover was reduced company-wide by over 5% each year, female recruits increased by more than 37% in areas where WOLF Packs existed and the number of women in the company grew by more than 18%.”
The program shows the link between employee engagement and revenue – by better connecting with female employees, Best Buy was better able to reach its female customers, tapping into this important segment of consumer shoppers.