Report: Lower-Income Affluents Returning to the Luxury Marketplace
May 25, 2012
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A new report says luxury kitchen appliance sales showed big declines from 2009-2011, but says premium appliance brands may find good news in the market-return of an important lower-income affluent consumer segment.
The "High Earners Not Rich Yet" consumer group, called HENRYs, have been out of the market since the recession, according to Unity Marketing's annual state of the luxury market report. This can be good news for marketers, the research firm said, because the group has large numbers, even if they lack the buying power of truly rich consumers. In fact, the firm said HENRYs are 80% of the affluent consumer segment.
The report is based on the research firm's consumer surveys conducted throughout 2011 of more than 5,000 affluent customers, with an overall average income of $288,600. Among the findings:
While ultra-affluent households (making more than $250,000 annually) cut spending in 2011 by almost 30% from 2010, HENRYs (making $100,000-$249,999) increased their spending on luxury by some 11% from 2009 levels.
Although HENRYs make and spend less per household, the report said there are nearly ten such households for every one ultra-affluent household - a total of 21.3 million HENRY households.
The report said overall luxury spending grew only 1.3% from 2009 to 2011. The luxury kitchen appliance segment was one of the biggest declining segments - down 23.9% from 2009 to 2011.
The outlook for luxury purchases is good.
"In 2009 only 18% of the luxury consumers surveyed expected to spend more on luxury in the next twelve months; by comparison 26% in 2011 predict greater spending on luxury throughout 2012," said Pam Danziger, president of Unity Marketing.
She points to other positive market indicators that indicate fewer affluent consumers are making changes in their lifestyle due to worries about the economy. Among the notable positive indications from affluent consumers:
* dining out more often
* shopping more frequently
* less likely to delay purchases
* fewer affluents are using coupons to save money
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