Understanding HENRYs: High earners, not rich yet

One of the most unique segments of consumers are classified as HENRYs: high earners, not rich yet. Making up about 36% of U.S. consumer spending, according to Unity Marketing, HENRYs are one of the most powerful categories of”shoppers.

Because of the buying power HENRYs hold, it’s paramount that retail businesses understand their spending behaviors, habits, and how to capture their loyalty. And that’s exactly what we’ll cover in this article.

Who are HENRYs?

Understanding the spending habits of HENRYs starts with learning who they are. What does “high earners, not yet rich” really mean?

HENRYs are young, educated, working professionals who, according to Investopedia, earn between $250k-$500k a year, but still have expenses for school, family, and future retirement savings.

Basically, they make a lot of money, but aren’t at a level of wealth to be considered “rich” by today’s standards. HENRYs tend to spend money on nice products, experiences, and services, but still have student loans, debts (i.e. mortgages), and family and personal finances to pay for. Despite their large salaries and earnings, HENRYs generally don’t have much saved up for the future.

In sum, here’s the financial profile of your average HENRY:

• Young, high-earning professionals who earn more than the median income
• Consider themselves “middle class” despite earning six-figure salaries
• Hold the potential for future wealth
• Focus on retirement savings and securing “real” wealth
• Capitalize on wealth management strategies

Why are HENRYs an important audience for retailers?

So, why should businesses focus on this consumer group? HENRYs have powerful buying power and like to spend their money — or need to — for family and personal expenses because of their stage in life. Primarily, it’s a large group of people with a large amount of money to spend.

By understanding what HENRYs like and how they spend money, retailers can better cater their products and services towards high-spending HENRYs, encouraging them to give brands their time, attention, and business.

Five factors of how HENRYs spend their money

Understanding how HENRYs manage their money in the retail world gives invaluable insights into their consumer behavior. Often, there’s a balance between indulgence and practicality in HENRYs purchasing patterns. However, they are also prone to the “lifestyle creep” mindset of thinking more luxury goods will bring them a lavish lifestyle.

Most often, HENRYs are influenced by the following five spending factors:

1.Brand perception

First, HENRYs often place importance on brand reputation and image. This means brands that align to their interests, values, and offer high-quality products will attract their attention. The perceived value of a brand can heavily influence their willingness to make a purchase.

For example, in the world of jewelry retail, a diamond ring from a prestigious brand like Tiffany & Co. has a high perceived value. Their name and reputation alone makes customers more willing to pay a premium price compared to a similar ring from a lesser-known jeweler.

This perceived value in Tiffany & Co. ‘s brand reputation and image, significantly influences a customer’s purchasing decision.

2. Social influences

Currently, in 2024, HENRYs are within the millennials, with a few of Gen Z creeping into this consumer segment. These two generations are easily influenced by their peers, social circles, and the internet. They’ll seek products or popular brands in these three respective places as the businesses come across as relevant or aspirational.

This highlights the importance of having a strong online presence and brand advocates. While this may seem daunting, in reality, you don’t need a huge TikTok star or Instagram influencer to grab their attention. Oftentimes a simple, user-friendly website and a collection of five-star reviews is enough to prove your social influence.

3. Quality and durability

While HENRYs may be willing to splurge on luxury items, they also prioritize quality and durability. If retailers are able to discern the consumers who value products with long-term worth and functionality.

An example could be an upscale outdoor gear retailer who launches a durable, functional line of jackets, perfect for HENRYs. This retailer could highlight in their marketing the product’s lifetime warranty and superb quality of material. By showcasing these desirable traits, the outdoor retailer can align with the values of consumers seeking durable and practical products.

4. Convenience and experience

HENRYs value convenience and a seamless shopping experience. They’re willing to pay more for higher-quality services, like personal shopping experiences and special events. Over half of consumers, 58% to be exact, according to a study done and reported in Forbes by Shep Hyken, a Customer Service Expert, are willing to spend more on better customer service.

For a way to elevate your customer service, let’s think about it from the perspective of a luxury clothing store who decides to launch an exclusive app. The app allows HENRYs to book private shopping sessions with personal stylists and complimentary experiences. This exclusive service enhances the customer experience and convenience which will increase customer loyalty.

Retailers that prioritize convenience and exceptional customer service are more likely to attract and retain HENRYs as loyal customers.

5. Financial considerations

Finally, despite their high incomes, HENRYs are mindful of their financial goals and responsibilities. It’s likely they’ll do a cost analysis of the perceived value and their long-term financial budget. Retailers who offer flexible payment options, discounts, or rewards programs will appeal to HENRYs wanting to indulge in luxury or discretionary purchases.

Part of these considerations should come through in HENRYs’ savings and investments. Some of these financial strategies include investment portfolios, savings accounts, and investment accounts. With higher-than-average salaries, HENRYs tend to be faced with the challenge of how to allocate their disposable income intelligently and effectively.

Financial planners can also play a key role in advising HENRYs in how to navigate the complexities of their income, living expenses, and retirement contributions. Keep this background in mind for them, even with their vast amount of disposable income, HENRYs still are hyper aware of their finances.

These five spending factors are extremely valuable for businesses and retail stores to match their strengths and unique value propositions and align them to those of the HENRYs.

The risks of being a HENRY

Despite making more than the average American, HENRYs don’t feel as financially secure in their financial future as they should. Part of this is due to the thousands of dollars in student loan debts and the high cost of living in urban areas. Even though HENRYs seem rich, they actually are working toward eliminating debt, saving for the future, and investing.

One of these hurdles is budgeting their living costs and other monthly expenses with investments and savings for retirement. The social pressure to spend according to their high-taxable income leads to spending on luxury goods, real estate, and experiences. HENRYs also struggle with school, mortgage, transportation debt, as well as managing their high tax income rate.

Retailers need to keep these challenges when marketing to HENRYs and working to earn their business.

How Clientbook can attract HENRYs to your store

Given the buying power HENRYs have, retailers should target HENRY consumers in anyway they can by customizing their experience, products, and services towards this section of the market.

Enter Clientbook, a customer relationship management system where retail stores and owners can access user-friendly technological tools to their benefit and success.

Let’s dive into three components of Clientbook which can help you be a “high earner” among HENRYs:

1. Personalized communication: Clientbook enables retailers to manage detailed customer profiles, including past purchases, preferences, and communication preferences. With this information, retailers can target personal communication to HENRYs, such as exclusive offers, product recommendations, and event invitations tailored to their interests and purchasing history.
2. Omnichannel experience: HENRYs expect a seamless shopping experience across various channels, including in-store, online, and mobile. Clientbook offers omnichannel capabilities that allow retailers to integrate customer data and interactions across all touchpoints, ensuring a consistent and cohesive experience for HENRYs, whether they are browsing online, visiting a physical store, or engaging with the brand on social media.
3. Data-driven insights: Clientbook provides retail owners with valuable real-time data into HENRYs’ shopping behaviors, trends, and preferences. By analyzing this data through Clientbook, retailers can better understand the needs and desires of HENRYs, which enables them to tailor their marketing strategies, and customer experiences accordingly.

For more info, try booking a demo with Clientbook today to see how it can help you take advantage of HENRYs’ spending behavior.

Conclusion

The HENRY consumer segment represents a crucial area of focus for retailers to create products and services that balance between quality, value, and customer-favorable experiences. By better understanding HENRYs’ unique financial challenges and preferences, businesses can customize marketing strategies to a group with high consumer spending.

Clientbook helps businesses engage in the best practices to attract these customers and adapt to their needs with its tailored retail owner features. By utilizing Clientbook’s unique tools, retail stores can stay relevant, thrive in a competitive market, and secure a loyal customer base.