In the past 10 years, new forms of digital media have empowered brands more than ever to build two-way relationships with their clients and fans. When people talk about their favorite brands, products and services, it can often sound like they're reminiscing about an old friend, or describing a family member. Brands, especially those in the luxury sector, need to realize this and begin envisioning the relationships they build with their clients as social, and not only commercial. What does this mean for brands today?
Recently, the concept of the HENRY - High Earner, Not Rich Yet - has become very popular with marketers, especially those looking for audiences with the potential for high discretionary spending. Advertisers looking to reach consumers on their way toward affluence have likely viewed this audience as the perfect target for their advertising campaigns. In some respects, they'd be correct, as HENRYs represent consumers who likely meet many of the qualifications for affluence.
Affluence marketers define their targets in many different ways (for example, by income, wealth, generation, buying habits, gender, or attitudinally). We believe that affluence and wealth are in the eyes of consumers and marketers. This column provides selected insights regarding wealthy American consumers (18 or older) in total and among adults with personal liquid assets of $1 million or more segmented by generation. Based on our survey and on Bureau of the Census statistics, we estimate there are 19 million millionaires as defined by their personal liquid assets.
Millennial shoppers wield an ever-increasing share of the dollars that are spent in the luxury market. Professionals have been looking for new ways to market their brands to these elusive customers in the hope of growing their customer base - all while conserving the exclusivity and prestige of their brands. How can luxury brands continue to build intimate relationships with their clients and brand ambassadors as they always have, but at a scale that generates a healthier bottom line?
Just look at this month's New York Fashion Week. Or actually, let's throw it back to the 1850's when top couture houses in France held private fashion shows for their most prized clients. The high-end fashion world has always been good at making sure no one outside of their exclusive circle has access to their products. Talk about defining affluence.
Industries like insurance are struggling to capture the attention of younger generations because fewer of these consumers are conforming to the "normal" behaviors these marketers have come to expect. While marketers still have a massive base of older consumers to fall back on at the moment, surviving market disruption will come down to how they adapt to consumers' attitudes in both the near and distant future. For many businesses targeting the affluent, it's time to begin retooling their products and marketing strategies based on the preferences of the new generations.
Specialty retailers, if you aren't convinced that you are positioned for the next big trend in retailing, then here is more proof. Another of the 'big boy' retailers, Neiman Marcus, is looking to a specialty retailer to help it restore some of its lost magic and learn some new tricks about how to sell in today's rapidly evolving retail landscape. Neiman Marcus just partnered with Story in New York City to tap its young, urban sophisticate customers and get some much needed buzz going about what it has to offer.
As we start working with our new clients, we listen very carefully to how they define their current marketplaces and target audiences. According to Webster's dictionary, affluent means "having a large amount of money and owning many expensive things." When we follow up and ask marketers what they consider to be "a large amount of money," their responses usually focus either on their customers' household-income levels or their customers' net worth.
Can we really achieve social status just by traveling? It wasn't that long ago when the well-to-do went straight for purchasing (and showing off) expensive new possessions. Want to get a leg-up on the neighbors? Buy a new Mercedes or Rolex or Gucci purse. But there's only so many pairs of Louboutins a person can buy before needing something "more."
According to the US Travel Association, direct spending on leisure travel by domestic and international travelers totaled $650.8 billion in 2015. Yet, even with this huge market, leisure travel is still just that-leisure. Put another way, people have to buy food, medicine and hygiene products-they don't have to buy a Caribbean vacation. This 'need vs. want' dynamic makes advertising crucial to the success of leisure travel companies. Marketers need to grab the imagination and emotion of perspective customers. And, in this realm, successful advertising most frequently comes in the form of great storytelling that paints a picture of an experience.