With 36 million Americans now unemployed, the AP reports that layoffs and pay cuts are starting to impact white-collar professionals. These people overwhelmingly make up the HENRY demographic.
The coronavirus shutdown has forced a reset to consumers’ purchasing behavior across the globe and at every income level.
In a blink of the eye, consumer spending shifted from discretionary to necessity purchases and has remained that way throughout the months of the shutdowns. With luxury being the most discretionary of all consumer purchases, it was the first consumer segment to suffer cutbacks due to the coronavirus and is shaping up to be the last one that will recover.
While luxury brands have been able to limp along throughout the duration thanks to their online presence, the virtual global shutdown in affluent consumers’ lifestyles has given them idle time to reassess the priorities in their lives. Luxury brands and the conspicuous consumption that sustains them are coming up on the short end of the stick.
The luxury market drives on the psychology of affluent consumers. When they feel good about themselves and on solid ground financially, they give themselves permission to indulge. When they don’t, they won’t. It’s that simple.
Right now, nobody feels confident or assured that they or their loved ones will get through this unscathed and depending on where they fall on the income/wealth spectrum, their financial status may be in question, too. How long these feelings of uncertainty will last is the $64,000 question.
Looking across the luxury consumer market, luxury brands can count on their rich customers to come back, maybe not with the same enthusiasm short term, but return they will.
That will not be the case for the mass-affluent HENRYs who occupy the space between the middle-income consumers ($50,000-$99,000) and the ultra-affluent elites ($250,000+).
Unity Marketing has prepared an easy-to-read 35+ page report that explores what the new-normal, post-coronavirus world will look like from the perspective of the HENRYs and ways that luxury brands can connect with them.
The luxury market is going to be profoundly changed by profound changes to the HENRYs mindset, priorities, and values.
For more details about the report, click here.
More about Pam Danziger: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992 where she leads with research to provide brands with actionable insights into the minds of their most profitable customers.
She is also a founding partner in Retail Rescue, a firm that provides retailers with advice, mentoring and support in Marketing, Management, Merchandising, Operations, Service and Selling.
A prolific writers, she is the author of eight books including Shops that POP! 7 Steps to Extraordinary Retail Success, written about and for independent retailers. She is a contributor to The Robin Report and Forbes.com. Pam is frequently called on to share new insights with audiences and business leaders all over the world. Contact her at email@example.com.
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