What? Who's that guy?
You have certainly heard or read about them, or even better : you may have met one already - sometimes without knowing.
Henry is actually the acronym that the luxury experts have given to that new luxury consumer that emerges in ALL markets and regions (yes, you read well). It stands for:
High
Earners
Not
Rich
Yet
Where can I find them? Who are they?
Well, that's the magic of it : EVERYWHERE, in every market, every corner of the world - or almost - it's a groundswell. That person would be around 43 years of age on average (spanning from 28 to 55yo), with an income of more than US$100,000 and investable assets of less than US$1m. Man or woman, they span across 5 generations of luxury consumers at the same time. They live in areas of higher cost (think city centres, expensive central neighborhoods), eat at restaurants at least once a week, often enjoy personal services. They look more and more for experiences rather than products. They're educated and travel intensely. You see them now?
Credit : Edward Berthelot/Getty Images
How do they like to spend ?
According to Equifax website, this luxury consumer group is digitally savvy, loves shopping online and is a big spender - making luxury brands’ digital presence more important than ever. According to Deloitte’s report, a millennial Henry consumer household will spend around US$86,000 per year on average on luxury goods, with purchases spanning from clothing and footwear to entertainment and travel.
What is important to them?
They are influenced by digital, likely to dedicate time to researching products and experiences online before making a purchase, often choosing brands that align with their personal values and beliefs. They are consuming brands differently, consciously and carefully choosing their brands based on their voice, their commitment, their personality. Luxury brands diving into recycling, upcycling, second-hand, sustainability, fair trade, origin - everything that we now call positive luxury - it was inspired and driven by them as as a consumer group.
They value authenticity, craft, products made just for them (think personalisation) but above anything else, what makes them different from the previous generations of luxury consumers, is that they love experiences even more than products.
Why should luxury brands bank on them?
This new affluent consumer group is already considered to be the customers of the future. As the website TheDrum explains in their 2020 article about the Henry's:
“With those Henrys likely to become of some of the wealthiest members of society, the potential benefits of onboarding this demographic to luxury brands’ product and service portfolios are twofold: securing valuable present customers and building client relationships and business with those might likely to be among the most affluent customers in future.”
This relatively untapped market will grow massively in the next years, with many of them moving from affluent to ultra-affluent as their incomes continue to grow.
Let's talk numbers now.
Why should you try to recruit those new luxury Henry consumers when your brand already appeals to the HNWI and UHNWI? Well, for one, whilst the ultra-affluent spend between 2.5X to 3X more than HENRYs on high-end goods and services, as a whole HENRYs have a market potential 3X to 4X greater than that of the HNWI.
Example with the US market
The high-earners represent about one-third of all U.S. households, or 44 million. Within that upper-income segment there are 7.6 million at the very top (ultra-affluents bringing home $250k+ and the traditional target for luxury brands) and a significantly larger group of 36 million right underneath them. These are the HENRYs (high-earners-not-rich-yet) with incomes between 100k-$250k. Unlike the ultra-affluents who think of themselves in the luxury class, HENRYs perceive themselves very much a member of the middle class.
Individually, a HENRY doesn’t have the spending power of an ultra-affluent consumer, but collectively HENRYs account for about 40% of all consumer spending, according to the Consumer Expenditure Survey by the U.S. Bureau of Labor Statistics (BLS).
Sources & Additional reading :
Deloitte's 2019 Global Power of Luxury Goods (check out page 6)
Interesting infographic about the US Henry population (Source: EQUIFAX):