HENRYs: The Millennials that Matter Most For Luxury Brands

The Millennials you NEED to know

HENRYS: High-Earners-Not-Rich-Yet

The term HENRY first appeared in a Fortune Magazine article in 2003. In the original article, the writer, Shawn Tully, used the term, HENRY to describe those individuals who would be the ones who were most affected by the alternative minimum tax, or AMT. Since that time, the definition has been expanded and the list of problems facing HENRYs has grown. 

For the foreseeable future, millennial HENRYs (High Earners Not Rich Yet) will be the consumers that every brand manager, marketer and retail executive will need to know well. This subset of the largest generation of Americans, earns between $100K and $250K–the income cohort that accounts for 40 percent of all household spending.

Most important however, these are the consumers who are on track to become the ultra-wealthy ($250K +) of the future.

While some conditions of HENRYism which are debatable, some aspects are generally agreed upon. It is these core characteristics which unities all HENRYs regardless of age or income level. These traits are:

1. A higher than average income level
2. Little to no savings
3. Feelings of low material wealth despite income level, leading some financial experts to dub these individuals "the working rich" — those who must continue to work potentially long hours despite high-earning careers.

“HENRYs status symbols are less about traditional high-end luxury brands and more about brands that express one’s values and identity,” Danziger explains.“Think a Mini-Cooper, rather than a Mercedes; or a Filson messenger bag, rather than one by Louis Vuitton; or a Shinola Runwell watch, instead of a Rolex.”

HENRYs have the ability to build wealth and they can do without earning a higher salary. All they need is a smarter approach to money management. If you are a HENRY who wants more out of your money and your life, talk with a financial expert today.

Why young, high-earning customers represent the future of business

When Apple unveiled the Apple Watch this year, its pricing strategy faced a lot of scrutiny. Some pundits were perplexed about the big range in pricing—from $349 and $17,000—while others thought it was outright too expensive. But if the Apple Watch seems out of reach for the mass market, that’s probably because Apple is targeting a different, highly-profitable market: an emerging segment dubbed HENRYs (short for High-Earners Not Rich Yet).

As its name suggests, this segment is in between the middle class (those with an income of $50,000 and $90,900) and the wealthy (with a household income of more than $250,000 or net worth of more than $1 million). HENRYs are flipping the luxury market on its head, shattering the industry’s traditional shopper persona.

Although HENRYs is a nascent segment, its impact can be felt everywhere. In consumer electronics, HENRYs fueled the growth of luxury smartphones. And it will be crucial for the success of emerging and relatively expensive technologies like drones, wearables and smartwatches. In retail, brands like Lululemon, Target and T.J. Maxx have recently tweaked their product mix in no small part to attract customers who are squarely in this market.

In the near future, all industries will need to pay attention to HENRYs. Here are five reasons why.

1. The middle class has less discretionary income.
2. HENRYs have money to spare—and there’s plenty of them.
3. Mature markets need them for future growth.
4. They’re the gateway demo to reach the ultra rich.
5. They’re growing quickly in emerging markets.

Practical Advice that You Can Use

For years we have been warning about the new wave of consumers who will change the way we shop. They are here now and they’re called HENRYs. HENRYs have huge buying power but most importantly, a different set of values in how they think about and consume luxury. Pam’s book is a treasure trove of insights and examples on how to appeal to these new consumers. – Neil Stern, senior partner McMillanDoolittle

Here are THREE to consider:

• Luxury of Performance – TAG Heuer watch advertising has a new branding tagline, “Don’t Crack Under Pressure,” and its alignment with youth-skewing celebrity icons, like Super Bowl champ Tom Brady, super-model Cara Delevingne, and tennis star Maria Sharapova, are intended to resonate with HENRYs. TAG Heuer recognizes that today’s HENRY women, as well as men, appreciate the high-performance promise that is a foundation of the brand.
• Luxury of Simplicity – Personal care and beauty brand Kiehl’s sells simplicity itself – simple product, simple ingredients, simple packaging – and extraordinary results. It’s prominent “since 1851” heritage says a brand that has been around that long must be doing it right. Kiehl’s simplifies its packaging and presentation elegantly. Simplicity is hard to do, but beautiful to behold when it is achieved. “Less is more” becomes the guide to creating simple, elegant brands and brand stories.
• Anti-Status Luxury – As a brand, Jeep defines its promise as “Vehicles enabling life’s extraordinary journeys.” It explains its goal to: “Provide vehicles that support a lifestyle of boundless freedom, responsible adventure, and are reliable, safe, fun and environmentally friendly.” Jeep is an experiential brand that most especially take its owners outdoors, rather than to the grocery store or mall.

Conclusion

All eyes will soon be on this important HENRY segment, not just retailers. It’s critical for companies to remember that not all HENRYs are the same. Engaging with these customers directly and consistently is critical.

It’s also critical to remember that HENRYs differ from Millennials or Boomers. And because HENRYs work a lot, it’s hard to reach them through traditional marketing methods. Marketers need to tailor their approach for these customers. Further research is required to gain customer intelligence on the best way to market to HENRYs.

Finally, 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. Marketing strategies need to speak to the unique needs and motivations of this segment.

“No one-size-fits-all strategy will work for HENRYs,” says Danziger. “It’s an incredibly diverse segment.”

Sources: Meet the HENRYs Book, January 2019 from Paramount Market Publishing - Are You a HENRY? from Financial Planning Done Right - Meet HENRY: High Earners Not Rich Yet Inforgraphics by equifax - Why young, high-earning customers represent the future of business by visioncritical