STEVENS, PA: Brands and marketers should be elevating their gaze from the traditional middle class in the US, which has seen its discretionary spending power eroded in recent years, towards a higher income group dubbed HENRYs, or High Earners Not Rich Yet.
These consumers have household incomes between $100k and $250k, twice the level of the traditional middle-class ($50k-$99.9k) and are, according to Pam Danziger, president of Unity Marketing and author of a new report, Meet the HENRYs, "the 'new mass market' for marketers and brands up and down the pricing scale".
The number of HENRY households is growing faster than the overall number of households – 11% between 2010 and 2013 for the former compared to 2.5% for the latter – although slower than ultra-affluent households ($250k+) which leapt 32.6% during this time.
Danziger highlighted the importance of the combined spending power of HENRY households.
They may only spend half as much as ultra-affluents on luxury and high end purchases, but their significantly greater numbers (24.3m households) mean that the total value of the HENRY market is about four times that of the ultra-affluent market (3.3m 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 in today's market," she said.
"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 also need to tap into HENRY spending power."
While this group may be better off than almost 80% of US households, they don't necessarily feel that way, shopping less often and spending less when they do.
Danziger argued that retailers needed to give them a reason to come to their stores and to make shopping less of a chore, offering an interesting, engaging shopping experience that can't be delayed or put off.
Data sourced from Unity Marketing, The Robin report; additional content by Warc staff