There’s a new kid on the block and his name is HENRY. An acronym for “High Earner, Not Rich Yet,” the HENRY is the up-and-coming high spender that brands need to market to. In a post-recession world, these households—defined as having an income of $100k-250k—are a fast growing segment that is replacing the middle-class/middle-income households that have traditionally been marketing targets.
HENRYs are frequently talked about in regards to their spending on luxury goods, as Pam Danziger does in a three-part article for Quirk’s magazine (Part One, Part Two, Part Three). She concludes that HENRYs are informed shoppers who make purchases cautiously and carefully. They have observed, if not experienced, the effects of the most recent recession and choose to spend their money smartly, or to not spend it at all. In a current state where the true middle class remains slightly inhibited in their spending, the HENRYs have both the income and the group size to make true economic impacts, which raises the question: where and how do HENRYs spread their wealth?
While still building affluence, HENRYs have a different mindset about how to spend their money, and these values will continue to pervade as more and more Millennials come into the HENRY designation. Less willing to purchase their parents’ luxury brands for status, many would prefer to spend their money on experiences or to make educated purchases based on background and values, such as a where and how a product is made. For instance, HENRYs are interested in functional luxury and turn to retailers like Whole Foods over traditional supermarkets to in order to purchase products that make them feel part of a community; for them, the Whole Foods experience is more than just shopping. Some CPGs are already exploring this territory, particularly those in the organic set. By combining their products with a background, customers feel good about their purchase and feel a part of something greater. But what we don’t know, yet, is what brands and products will need to do to stay relevant with consumers.
Danzinger reminds us that “the lives of many HENRYs are still in transition, so companies need to maintain a relationship with these customers in order to deliver relevant products and services.” The Millennial is already a huge target for companies to market to. As brands find successful ways to reach them, they are going to need to keep in mind that adapting as this group progresses in age and income is imperative if they are to benefit from their still developing spending power. The HENRYs have different motivations as purchasers than other segments; if companies are to benefit, they need to build intuition about HENRYs and find ways to position their products and services to not only meet a functional need, but also show how what they are providing also has higher-order benefits.
-Jennifer Carrasco, Associate Project Director