Lower-income affluents are important to marketers, according to a trend report from Unity Marketing.
Brands as diverse as Costco, Trunk Club, Black Box Wines, Leo Schachter Diamonds, Alex and Ani and more hit the mark with the HENRYs, or High Earners Not Rich Yet.
With an income between $100K and $250K, they're not quite wealthy. But the unassuming mass segment is an important target customer.
"The recent recession has left the true middle class severely limited in their ability to purchase goods and services in the near future," says Pam Danziger, president of Unity Marketing and author of the report. "This means HENRYs are the 'new mass market' for marketers and brands up and down the pricing scale."
The HENRYs are ready to respond in force, if not necessarily in high levels of individual spending. While HENRYs spend about half as much as do ultra-affluents on luxury and high end purchases, their significantly greater numbers (21.6 million households) mean that the total value of the HENRY market is about four times that of the ultra-affluent market (2.9 million households).
"Marketers have historically felt that ultra-affluents were their ideal consumer, but there simply aren't enough ultra-affluents to keep luxury brands afloat," Danziger says. "Instead, luxury brands need to broaden their reach to include these consumers. This creates a unique challenge, as they are now competing with mass market brands that would also like to reach up and tap into HENRY spending."
Targeting HENRYs is a sound strategy for helping brands position themselves in the future, she says.
"While it is typical for brands to identify a target customer and stick with this demographic as it ages, today's luxury brands need to look at young HENRY consumers age 25-34,” Danziger says. “As these younger affluents mature, their incomes will rise, making this population the source of most of tomorrow's ultra-affluents. Luxury brands that want to continue to reach the highest income customers need to reach out to slightly less affluent Millennials today."