Who should Singapore's luxury brands be targeting in 2019 and beyond?By Adeline Hales
If there is one name that luxury brands in Singapore (and Asia) need to pay attention to this year, it’s the name “HENRY”. No, HENRY isn’t the name of an insanely wealthy and big-spending individual, nor are we referring to Henry Golding, the lead actor from the movie Crazy Rich Asians. Rather, it describes a demographic which stands to be the most important consumer group for luxury product, lifestyle and services brands. In Singapore, HENRYs are defined as households or families that are “High Earners, Not Rich Yet”, earning between $150,000 and $300,000 per year – the segment of consumers that have significant discretionary income and a strong chance of being “ultra-affluent” in the near future.
According to TCP Research, despite HENRYs only spending approximately half as much on luxury purchases in comparison to the ultra-affluent group (households earning more than $300,000 per year), the key statistic we need to pay attention to is the fact that HENRYs are a much deeper market– there are many more HENRY households compared to ultra-affluent households. It is estimated that HENRYs represent approximately 25% of all households in Singapore, compared to less than 5% for the ultra-affluents. Therefore, potential luxury spending by HENRYs is significantly larger than the ultra-affluent market. We also need to take into consideration that HENRYs are a future gateway to the ultra-affluent market, given that they are likely to become wealthy in the future.
For HENRYs, their attitudes are changing, and when that happens, their priorities shift too. So in addition to setting aside funds for traditional spending and investing, HENRYs are looking to potentially spend money on luxurious experiences and lifestyle enhancing products. And with their high disposable incomes, highly motivated attitudes, and a new and exciting desire to spend on exclusive products and services, this demographic is driving luxury brands to change the way they look at marketing and PR.
For the reasons above, HENRY consumers are drawing the attention of luxury brands. They are viewing this as a good opportunity to engage and insert themselves into the HENRYs lifestyle, and then use that as a starting point to building long-lasting brand loyalty.
So how do they go about this?
Quintessentially Group is a good example of an established luxury brand that has done a very good job recalibrating their marketing outreach to cater to HENRYs. Their marketing content has evolved from mainly focusing on the luxurious and hedonistic aspects of their high-end management services, to now also weaving in content around the practical and functional side of what they offer, as well as its attainability to the mass affluent.
There are also new luxury brands that are 'born' targeting HENRYs. For example, Singapore’s Acquired Time is a luxury watch rental service company that has been consistent with their PR outreach from the get-go – showcasing the prestige and beauty of its range of luxury timepieces, but also communicating the practical aspects of their subscription service.
Finally, there are the mainstream brands that are making moves to corner the HENRY market. For example, Singapore-based e-commerce shopping rewards company, V-More, recently launched a luxury fashion division within their company. Instead of revamping their website to cater for their new luxury fashion range, it has been added to and marketed subtly on all their online platforms.
These examples summarise the “secret sauce” when targeting HENRYs. Luxury marketing, PR, and online outreach to this high earning and future wealthy demographic needs to have equal parts Aspiration and Practicality.
It is clear that HENRYs will disrupt the luxury market in 2019 and beyond. To successfully engage HENRYs, luxury brands need to reassess how they connect and communicate with this group.