Home furnishings brands: Meet the HENRYs! The gatekeepers to future prosperity. HENRYs (High Earners Not Rich Yet) are an often overlooked and not a well understood segment of consumers. HENRYs have high incomes, ($100,000-$249,999) putting them in the top 20% of all U.S. households, but not nearly as affluent as the Ultra-affluents (top 2-3% with incomes $250,000+), the traditional target market for luxury brands.
Quoting comedian Rodney Dangerfield, HENRYs “get no respect,” especially among furniture brands that target the high-end of the market (RH, Ethan Allen, Henredon, Thomasville). They are the lower-income, mass-affluent, but they number nearly 24 million households, much larger than the 3.3 million that rank among the Ultra-affluents.
For home furnishings companies aiming at the high-end, low-end or in the middle of the market, the HENRYs are the segment that ultimately drives their businesses and are key to their growth.
For the furniture brands that aim for the middle-mass market, thinking IKEA, Ashley, Raymour & Flanigan, Pottery Barn. La-Z-Boy, HENRYs are poorly understood. Yet they represent the best potential customer, as HENRYs have spending power far exceeding that of today’s middle-income customer.
That means for home furnishings companies aiming at the high-end, low-end or in the middle of the market, the HENRYs are the segment that ultimately drives their businesses and are key to their growth.
Younger HENRYs: More Valuable to Furnishings Brands
As a demographic segment, HENRYs are strictly defined by income, but income varies with age. Predictably young people start out with lower incomes which rise as they gain experience and stature in their careers, only to drop back down again with retirement. The age window of affluence, when people’s incomes reach their peak, is between 35 and 54 years. This is also the age range when people’s spending on home furnishings is at its highest.
But during that 20-year period of highest earnings, the younger 35-to-44 year olds are of more value to furnishings marketers than their more senior middle agers, who range from 45-54 years of age, because the younger affluents (35-44 years) consistently spend between 1.5 and 2 times more on higher-end home goods than their older affluent counterparts.
Problem is that between now and about the middle of the next decade, the relative numbers of young affluents 35-44 years with heady appetites, and enough spending power, to indulge in high-end home furnishings will be thin on the ground.
Not until around 2026-2029 will the Millennials cross over and make up the majority in the prime spending and earning period. This could mark the next home furnishings boom OR bust if brands don’t successfully make the transition to the tastes and values of the next generation – Millennials.
Opportunity lies just over the horizon: Rapidly growing numbers in the 25-to-34 age range – But they are not as affluent
For home furnishings brands, the population projections show powerful opportunities emerging for marketers that can tap the potential of the 25-to-34 year olds, the Millennial cohort. While today, these consumers have less income and so less money to spend on furnishings, being younger they have a powerful appetite to acquire more material possessions, including items for the home.
Further, until Millennials’ incomes start to grow, the generation’s most highly educated consumers with the best prospects for achieving high incomes as they mature will start their ascent up the income ladder as HENRYs.
Home furnishings brands must start today to position for the future and that means getting up close and personal with young HENRYs on the road to affluence. Brands must understand that the next generation is not going to decorate and furnish their homes in the same ways as their parents’ or grandparents’ Boomer generation, nor are they shopping for home furnishings in the same way. So brands must adapt to the Millennials unique perspective on home.
Beekman 1802 Mercantile Knows HENRYs
The key challenge for home furnishings brands and young HENRYs is not how they connect – high-tech gimmicks and internet marketing tactics – but how to connect with new and compelling reasons why their brands are meaningful and important to this digitally-empowered generation.
Getting to the “why” of the brand is where the future of the home furnishings market will be built. It requires tailoring the brand message to the unique psychology of younger consumers on the road to affluence.
Today, high-end brands telling stories of exclusivity, status, indulgence and over-the-top extravagance repel more than they attract. New narratives are required that connect with the unique consumer psychology of the next-generation affluent customer, which is democratic, not elitist.
For example, too many furniture brands think the way to appeal to younger consumers is through style alone, as if all young people gravitate toward sleek, sophisticated modern designs.
While some urban young people may in fact do so, Beekman 1802 Mercantile, launched by partners Josh Kilmer-Purcell and Brent Ridge, goes in a different direction, back to the farm, rather than to the city to find its design inspiration. Its carefully selected line of home furnishings celebrate a back-to-basics lifestyle that is traditional hearth and home, yet re-imagined for a 21st century lifestyle.
Using reclaimed barn wood and re-purposed industrial gears, what’s old is new again at Beekman 1802 Mercantile. Its design sensibility fits into the 200 year old farmhouse the ‘Beekman Boys’ call home, yet its offerings are upscale in a downhome country way.
Home furnishings brands must also appeal to young HENRYs preferred way of shopping, which is online and mobile accessible. Beekman 1802 Mercantile fits the bill as well, with its full collection of furnishings, along with food, handcrafted soaps and beauty products, clothing and garden accessories, all accessible online.
Luxury: A State-of-Mind, Not a Price Point
For HENRYs, a luxury lifestyle is a state of mind, not a price point or brand. The luxury stories furnishings brands craft for HENRYs must go well beyond stated status, privilege, and exclusivity, all values linked to the 1% who are not their role models.
Young HENRYs are looking to both brands and shopping experiences that capture their mood and their spirit. They want home furnishings that speak to their unique values, which is:
- Inclusive, yet individualized;
- Self-expressive, not self-absorbed or narcissistic;
- Made for them, not their parent’s or grandparent’s lifestyle, and
- Furnishings that deliver unique and meaningful experiences.
Learn More about HENRYs – the demographic key to the future home furnishings market
I’ve just published a new mini-book to serve as a guide to the most important affluent demographic for home furnishings brands’ future. Entitled What Do HENRYs Want?, it is a concise overview of the HENRYs, why this new demographic is important to brands and how to connect with this high-spending customer, poorly understood by marketers serving both the mass market and the luxury markets.