Retailers are Clamoring for a New Kind of Ideal CustomerApr 21, 2015 - by Business Insider
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Retailers from Target to Burberry are targeting a new kind of customer.
The market’s sweet spot right now are people aged 25-34 with money to spend but who aren’t rich, luxury marketing expert Pam Danziger said in a recent report.
She calls calls these customers HENRYs, for “High Earners Not Rich Yet.”
HENRY households between $100,000 and $250,000 a year.
The group is “the new face of the mass-market customer, since the traditional middle-class lost so much discretionary spending power in the recent recession,” Danziger writes.
These consumers, which represent the top 20% of households, are important to virtually all retailers because they have higher spending power than the middle class.
They’re also much more numerous than people who make $250,000 a year or more.
While the overall number of households grew only 2.5% from 2010-2013, the number of HENRY households rose 11% in the same time, according to Danziger.
This presents more opportunities for retailers to make money.
Luxury retailers should also be targeting this group.
“While HENRYs spend about half as much as do ultra-affluents on luxury and high end purchases, their significantly greater numbers (24.3 million households) mean that the total value of the HENRY market is about four times that of the ultra-affluent market (3.3 million households),” Danziger writes.
Many well-known brands are currently trying to attract HENRYs.
Target has attracted HENRYs through a number of collaborations with high-end designers, most recently Lilly Pulitzer.
Lululemon has said its ideal customer is “a 32-year-old professional single woman named Ocean who makes $100,000 a year,” founder Chip Wilson told The New York Times.
Ocean is also “engaged, has her own condo, is traveling, fashionable, has an hour and a half to work out a day,” Wilson told NYT.
Discount chain T.J. Maxx is targeting a higher-end customer by offering designer labels like Diane Von Furstenberg at cheaper prices.
And grocery chain Kroger is offering more organic and prepared foods in stores.
Danziger calls HENRYs are the “gatekeepers of the luxury market” because they will grow up to be ultra-rich buyers of the finest labels.
Burberry has attracted younger people by offering some products at price points that affluent millennials can afford.
This article was written by Ashley Lutz from Business Insider and was legally licensed through the NewsCred publisher network.