The luxury market and the buying habits of the world’s wealthy have changed dramatically over the last few years, led primarily by millennials and generation Z who have defined the global luxury market. However, in an ever-changing world, new opportunities to market high-end goods often present themselves as new luxury consumer groups emerge.
Deloitte’s recently released Global Powers of Luxury Goods 2019 report identified a new group of powerful luxury consumers that brands are now eager to target: 'Henrys.' This new affluent consumer class – High Earners Not Rich Yet – are eagerly being eyed up by luxury brands and marketers as likely to be the customers of the future, as exclusive brands now seek to create positive relationships with luxury consumers based on their potential.
“With 'Henrys' likely to become of some of the wealthiest members of society, the potential benefits of onboarding this demographic to luxury brands’ product and service portfolios are twofold: securing valuable present customers and building client relationships and business with those might likely to be among the most affluent customers in future,” the report says.
This relatively untapped market is set to boom in the next few years, with many 'Henry' consumers set to move from affluent to ultra-affluent as their incomes continue to grow. A savvy marketer would be wise to capture their interest and build brand loyalty now.
Meet the Henrys
So, who are 'Henrys'? This affluent luxury consumer group has been identified as being around 43 years of age on average, with an income of more than US$100,000 and investable assets of less than US$1m.
They may not be in the league of ultra-high-net-worth individuals yet, but luxury brands are banking on their potential in the near future.
According to Equifax, this luxury consumer group is digital savvy, love online shopping, and are big spenders. Indeed, according to Deloitte’s report, a typically millennial 'Henry' Y consumer household will spend some US$86,000 per year on luxury goods, with purchases spanning from clothing and footwear to entertainment and travel. Of note is the fact that the majority of purchases will be done online, making a luxury brands’ digital presence more important than ever.
The high incomes of this group enable them to indulge in a luxury lifestyle, which is likely to become increasingly luxurious over the years as their wealth grows. Indeed, 'Henrys' are tipped to become some of the most affluent shoppers in the future, making them one of the most desirable millennial luxury consumer groups for brands to engage with.
Personalised and authentic storytelling
Just like HNW and UHNW millennials, 'Henrys' are heavily influenced by modern technology and are likely to dedicate time to researching products and experiences online before making a purchase, often choosing brands that align with their personal values and beliefs.
Brands that can demonstrate sustainable and ethical practices resonate with this new savvy luxury consumer who are socially and environmentally conscious. Indeed, this group's purchasing decisions are heavily influenced by ethical issues, such as the environment, animal welfare, sustainability, and production and labour practices, according to the report by Deloitte.
This has seen a shift in the way luxury brands operate, changing their practices to target this new socially and environmentally conscious consumer. For example, Burberry recently announced that it is expanding its practice of recycling, repairing, and donating unsold products, while Tiffany was one of the first luxury jewellery brands to announce that it would only source metals and diamonds from responsible mining companies.
And just like ultra-wealthy millennials, 'Henrys' are also more likely to seek personalised and authentic items, placing experiences above tangible goods. Indeed, the days of consumerism for consumerism sake are long gone; today’s luxury purchases are purposeful and well-researched.
One of the best ways to reach this new powerful luxury consumer group is by crafting compelling stories around a luxury brand that talks to the Henry consumers’ core values and beliefs.
Digital marketing key to reaching the 'Henry' consumers
Digital touchpoints, including carefully selected social media platforms, are the ideal way to reach this highly aspirational group, who increasingly use social media platforms to express their brand preferences.
For example, creating compelling and creative social media feeds that are visual, engaging, and shareable are central to an effective social media campaign, while collaborating with carefully selected bloggers and influencers is also a tried and tested digital marketing strategy, although needs to be approached with caution as some countries have now introduced new rules of transparency between brands and influencers.
A brand’s heritage and history has been considered a key selling point, however in the new world of luxury it’s not enough to just talk about this. Indeed, Deloitte’s report notes that today’s new breed of luxury consumers only care about the brands that have created value for them. Quality, customer service, design, craftsmanship, and product exclusivity are all equally important. Industry leaders are therefore shifting their marketing strategies to ensure they communicate these desires effectively.
Digital marketers working in the luxury market should therefore focus on these selling points through carefully crafted stories that are built around experiences and the aspirational desires of 'Henry' consumers.
“The future success of luxury brands depends on how well they will be able to communicate and market their goods to the new generations of tech-savvy buyers,” Deloitte’s report points out.
Indeed, marketers working in the world of luxury goods need to be more agile than ever to ensure they reach their target market by constantly adapting their marketing strategies to take into account the changing luxury market landscape and the new luxury consumers.
At Relevance we constantly research new and emerging affluent groups to ensure we maximise the growth of our clients’ brand through strategic digital marketing strategies. Contact us today and find out how we can help promote your luxury business today.