Millennials, like other classified generations before them (Boomers, GenXers), have begun breaking out of their defined box as they mature and start to gain wealth with the improving economy. A growing sub-set is not only finally tackling their student debt and moving out on their own, but have disposable income and a propensity to spend on luxury items, services and experiences. This group even has an acronym: HENRYs. As in, “High Earners, Not Rich Yet.”
The nickname goes back to a 2003 article in Fortune Magazine that described families with incomes between $250,000 and $500,000 but who – because of their affluent lifestyles – were cash-poor. Over the past couple of years, however, the definition has morphed with the moniker now being applied to Millennials in ways that should be especially interesting to luxury marketers. HENRYs are now typically defined as:
HENRYs approach luxury differently than traditional “wealthy” consumers. As such, luxury marketers need to understand these nuances – or risk misfires when it comes to engaging them. The key here is ‘functional luxury’. HENRYs have significant, sustained cash-flow without true, accumulated wealth yet; they seek to use and experience luxury without needing to own luxury. Consider that more than half of all luxury automobiles in the U.S. are leased rather than purchased, and one begins to grasp the enormity of the market at stake.
The good news: because of Millennials’ acumen with mobile devices and social media, the hospitality and travel sectors have an especially good opportunity to connect with HENRYs. Large and growing portions of all travel categories in the US and Europe are already being reached through mobile, in new and increasingly engaging ways. A study that we recently commissioned with comScore showed that more than half of UK luxury travelers use a tablet to research destinations, shop for air/hotel, plan trip activities – and more than half use a tablet or smartphone during a trip.
As our partners know, the key is not just to be visible on the devices where audiences are, but to deliver cross-platform experiences that are visual, engaging and shareable. Strategies that luxury – and any – brands can leverage to reach HENRYs should include:
Right now, there is an incredible opportunity for luxury brands to connect with these high-earning Millennials. Indeed, this is the time for brands to initiate and nurture long-standing allegiance with consumers who will be in the “affluent” or “ultra-affluent” category for the rest of their lives. To do so, we just need to open our thinking on the new HENRY and how to engage on their terms.
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