The retail game is no longer just about the millennials. Now, it’s all about the HENRYs.
HENRY stands for High Earners, Not Rich Yet and they’ve been dubbed as the “consumer of tomorrow”, though you’ll want to learn about them today.
These baby boomers’ babies are earning a whopping $100-250k annually and are on track to becoming the new generation of the ultra-wealthy.
These affluent youngsters are part of a larger income cohort that accounts for 40% of all household spending. That is a lot of buying power!
- “According to a recent Goldman Sachs study, millennial households already control financial assets worth more than $1 trillion.” ¹ — Tanya Dua, Digiday Writer
Where does their buying power come from you ask?
The American Dream has shifted – or at least it has for HENRYs. While previous generations dreamed of and saved up for a mortgage, two-car garage, and two cars, HENRYs crave experiences. And they’re willing to move back in mom and dad to make it happen.
- “Gen-Xers thought it was societally unacceptable to move back home, but it’s not looked down upon among millennials, many of whom have saved up and accumulated wealth by moving back home,” she said. “What unites them is their desire for a better lifestyle and enriching experiences such as travel.”
- ” ² — Jamie Gutfreund, CMO of agency Deep Focus
Along with an interest in experience comes along some qualities that make experiences that much better. HENRYs seek out quality, craftsmanship, and authenticity – which aligns perfectly with the overall cultural shift towards artisanal products with a quality, homemade feel. You can see it in here-to-stay trends like small-batch craft beer and nostalgia-made-new products.
A key difference between a typical shopper and a HENRY is while they can be fastidiously brand-loyal, they do not shop based on brand name alone. They’re less influenced by advertising and traditional marketing. They’re introduced in brand ethics and community involvement.
- “[HENRYs] evaluate mission statements carefully. Cash rewards are less enticing. Experiences are more motivating. And once aligned to a brand, they are more resistant to competitors’ offers.” ³ — Evan Snively, The Marketing Insider Columnist
Why HENRYs are so important
HENRYs dominating the space in consumer retail markets denotes an important shift in the transition from product-based retail to experience-based retail.
Often called a Retail Renaissance, the movement towards digital-first brands, pop-up stores, and omnichannel retail is all a by-product of a changing consumer landscape spearheaded by HENRYs.
And if you think they’ve made waves in the industry at large, you can bet they’ve turned luxury marketing on its head!
- “The key here is functional luxury. HENRYs have significant, sustained cash flow without true, accumulated wealth yet. They seek to use and experience luxury without needing to own luxury.” ⁴ — Noah Tratt, Retail Dive Columnist
Large, urban, cities are seeing more renters than home buyers. Likewise, more people are choosing to lease a vehicle over purchase one. Millennials were priced out of the markets, and chose to invest in themselves instead.
For HENRYs, with more discretionary funds available comes the opportunity to lease luxury cars and rent luxury apartments – in order to add to the enjoyment of life.
They’re not seeking status, so why then, are HENRYs choosing luxury?
Millennials came of age during a great recession, and entered the workforce during a gradually improving economy. HENRYs matured through periods of scarcity, and they’re excited about tasting, testing, and trying everything and anything that speaks to them. With financial capital on their side, HENRYs are seeking a life of abundance.
How to successfully reach HENRYs
- “HENRY males, in particular, are increasingly turning the heads of brands. With their high disposable incomes, highly driven attitudes and a desire to spend on exclusive products and the best experiences, this demographic is driving luxury brands to expand their offerings and boost the service that they provide.” ⁵ — Erminia Blackden, Luxury Society Writer
Overall, though, it is the brands that are curating an experience that are resonating with HENRYs.
Shinola is a great example. As an American owned and operated company, they appeal to HENRY’s interest in ethical, sustainable business practices and “hit all the right notes in quality, style, workmanship and value, plus membership in a cool tribe of people that share the same values”.
Everlane has seen incredible traction with HENRYs “with its ‘luxury basics for less’ positioning thanks to a commitment to ‘radical transparency’ in pricing and ethical, conscientious manufacturing.”
Everything that has worked in retail before is up on the chopping block. HENRYs don’t want the products, services, or lives of their parents – they want their own… and they want it their way.