Authors: Benjamin Gietzendanner, Marine Wellauer, Janina Morgen
More than a common name, HENRYs are a rising class with increasing importance for luxury retail. The acronym stands for High Earners Not Rich Yet and represents a customer segment that is likely to become wealthy in the future. Imagine a digital-savvy and highly affluent 42-year-old entrepreneur with a family – a perfect target customer for luxury retail. HENRYs are the “in-between” generation that lies in the middle of the Baby Boomers and the digitally native Millennials in terms of age as well as needs. While younger generations search for a unique experience and entertainment, older generations search for seamless service and customer-centricity. These differences in expectations create a considerable gap. Luxury brands can easily bridge this gap by investigating and stimulating this prospective high-earning customer segment that inherits values from Baby Boomers and Millennials.
The HENRYs are at the same time digital savvy and seek an individualized but reliable service – by designing the boutique environment around their needs, luxury brands can kill two birds with one stone and please shoppers of all ages at once.
These days, luxury retailers are shifting their focus more and more on stimulating Millennials and Generation Zers. Companies invest heavily in building strong and individualized brand relationships with these generations from a young age. They use digital technologies to analyze customer data to create unique in-store experiences based on their customers’ needs.
Seeking unique experiences and magical moments is key to building strong bonds with 20-40 year-olds, and entertainment and technological components boost this experience. Also, luxury brands need to bear in mind the increasing interest of Millennials in sustainability and the demand for transparency regarding the social and ecological practices of companies.
While Millennials are at the center of the luxury brands’ attention, addressing the needs of high spending Baby Boomers should not be forgotten. The generation of the 50-70 year-olds has been the main target of the luxury sector for many years as high purchasing power and brand loyalty enable a deep relationship. Instead of entertaining retail experiences and digital technologies, brand loyalty is created by customer-centricity and quality of service and products.
Retailers can simply focus on the HENRYs, the segment that embodies several needs at once. The HENRYs are the strategic target for luxury brands, so the perfect boutique environment should be designed for them. Consequentially, luxury retailers should create a unique experience through entertainment and in-store technologies while providing an expert and customer-centric service and understanding customer needs across all generations.
Augmented reality (AR), artificial intelligence (AI), and the internet of things (IoT) are disrupting the entire shopping experience by creating entertaining in-store experiences and, at the same time, enhancing sales service. These emerging technologies are the new enablers for brands to create a more personalized and seamless shopping experience. Finally, building the store design around the HENRYs as a bridge between Millennials, Generation Z, and Baby Boomers will enable luxury brands to thrive in the long run.