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Unity Says HENRYs Hold the Key to a Brand's Future

Nov 26, 2013 10:59 AM   By Jeff Miller
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RAPAPORT... Unity Marketing released a new consumer report that shows how brands, such as Trunk Club,  Black Box Wines, Leo Schachter Diamonds, Costco and Alex & Ani, have hit the mark of success with the emerging ''mass-affluent'' consumer in the U.S. Unity Marketing defines this emerging class, who earn between $100,000 and $250,000 annually, as ''high earners not rich yet'' or HENRYs. The group defines ultra-affluent households as those earning more than $250,000 annually, coupled with wealth of more than $1 million.

While HENRYs are a far cry from being wealthy, these emerging affluent consumers are doing well, economically speaking, and could  be the most important target customer for luxury brands,  according to Unity Marketing. The new  trend report, ''Meet the HENRYs:  Positioning for the Mindset of the High-Earner-Not-Rich-Yet Customer,'' highlights reasons why these lower-income affluent households are so important to marketers.  "The recent recession has left the true middle class severely limited in their ability to purchase goods and services in the near future," said Pam Danziger, the 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."

Danziger found that  HENRYs are ready to spend and while they 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, comprised of only 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," said Danziger.  "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."

Danziger also found that targeting HENRYs is a sound strategy for helping brands position themselves in the future. While it is typical for brands to identify a target customer and hope they remain loyal as they age, today's luxury brands need to look at young HENRY consumers in the age range of 25 to 34 to secure their future.  As these younger affluents mature, their incomes will rise, making the group the source of most of tomorrow's ultra-affluents, according to the report.  ''Luxury brands that want to continue to reach the highest income customers need to reach out to slightly less affluent millennials today,'' Danziger said.

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Tags: affluent, henrys, Jeff Miller, jewelry brands, luxury, Unity Marketing
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