Last month’s column — “How Many Affluent Millennials Are There?” — focused on the buying power and affluence levels of the Millennial generation by segmenting all 73 million who are adults (18+ in age) into three age segments. That column induced a good number of readers to ask how Millennials compare with Gen Xers and Boomers as regards affluence.
As some marketers of luxury goods and services also target Seniors (the 30 million adults who are 70 or older), we decided to include them in this column, which focuses on the following four frequently used measures of affluence: personal income, household income, personal net worth, and the purchase of one or more luxuries in the prior 12 months. Because some marketers focus on average (mean) measures and others focus on medians, we are including both in the following exhibit of different measures of affluence in America.
Depending on the measure of affluence a marketer chooses to target, materially different numbers of affluent consumers would be deemed to be targets. The exhibit above shows that Gen Xers have the highest proportion of "high-income" consumers, as well as average and median levels, when a marketer targets by either personal or household income.
If wealth matters, i.e., having a personal net worth (the person's share of total household net worth) of at least $1 million, then Millennials technically come into the picture along with Gen Xers. Be careful, though, as many Millennials are still living at home and have very little personal income at this stage of their lives. Notably, Seniors are also potential affluent targets when median personal net worth is the targeting metric.
Last, as regards behavioral targeting as opposed to demographic targeting, Millennials come back into consideration for luxury marketers, as they are the generation with the largest number of luxury buyers. However, the typical amounts they currently spend when they buy luxuries tend to be materially lower than the older generations.
From our perspective and experiences, "affluence" is however affluent marketers define their marketplaces. Just as we know that luxury is in the eyes of the consumer, affluence is in the eyes of the marketer.