Affluents represent around 10% of U.S. households but account for more 50% of retail sales — and over 70% of all retail margins, according to a study from eMarketer. Not only that, this cohort typically shows a higher lifetime value compared to the general public. But not all affluents are created equal. There’s one group that’s the luxury marketer’s golden ticket: emerging affluents.
The emerging group, aged 18 - 39 with an annual household income of between $75k and $100k, represents 6% of the U.S. population. They are especially interesting as they typically do not have strong brand affiliations and generally lack spending commitments. Translation: they are an abundant opportunity.
If you’re a consumer brand, you definitely want to target this group. But how do you create marketing materials for this customer base? What channels should you engage on in order to reach them effectively? This is where most marketers hit a brick wall.
This group displays high levels of digital media consumption — some estimates put it at 20 to 25 hours per week — separating them from the rest of the affluent market segment. Most cohort members describe themselves as living “digitally infused lifestyles,” per a report from Martini Media, as opposed to older affluents, and they have a significantly higher smartphone adoption rate, currently around 98%,according to the IAB. These factors make them an excellent target demographic to engage with data-driven programmatic digital advertising.
Yet, the question still remains, how do you convert these users and apply lean marketing principals to your campaigns? The solution boils down to two key points: personalization and platform.
When surveyed by Martini Media, two-thirds of cohort members agreed that personalized content is key when considering the effectiveness of an ad. Marketers who are looking to effectively convert emerging affluents ought to consider looking beyond simply A/B testing creatives and move toward a more sophisticated system. Synching on-site cookies and user session logging, opportunities can be dynamically retargeted with content that features products that have been viewed by that individual. Combine that with multi-armed bandit testing to optimize variations of the creative in order to create a far more robust experience for your audience. When exposed to personalized creatives that are optimized, a report from the Shullman Research Center cites that approximately 60% of group members surveyed report taking action on a digital ad in the last six months.
Device fragmentation and cord cutting are especially prevalent in the emerging affluent group. A global report from the BBC says they are 10% more likely to consume streamed video on their mobile devices, and 15% more likely to name their mobile devices as their platform of choice compared to the general public. Mobile is especially interesting as a platform. It is personal, is taken everywhere, provides location data, has integrated payment, and is easy to use.
Not only is mobile adaptation already ubiquitous within emerging affluents, but their move to transacting on mobile has been monumental. EMarketer says that more than 30% of group members regularly use their mobile devices to shop or locate brick-and-mortar retail locations. The low friction required to transact on mobile, combined with the granular personalization possible through the platform make it an ideal sales channel to convert new opportunities.
As demographics change and evolve, having a clear understanding of how to reach and impact the emerging affluent will make or break many brand marketers. A demand for personalization and deftly employing the platforms that are native to the audience mean they must begin calling plays from an entirely new playbook if they’re ever going to be truly successful with this changing and emerging audience.