Retail jewelers are correct in obsessing over the Millennials and the potential bridal business this age demographic can bring to their stores. But ignoring other age groups could be a classic case of putting all of their promotional eggs in one basket. In their presentation “Follow the Money: A Practical Workshop for Developing a New Media Strategy” at LUXURY at JCK on June 2, Rachel Wengrow and Angie Ash of Fruchtman Marketing told retailers how to identify and more effectively reach the six key age demographics with the right messaging through the right medium.
Of all the generational luxury spending information shared by the Fruchtman team, one of the more interesting facts was the emergence of a new luxury spending group: The “Luxury Newcomer” group is composed of Gen Xers (33 percent), Baby Boomers (32 percent), and Gen Y and Millennials (10 percent). Luxury Newcomers may be characterized as “younger and less wealthy,” according to the Fruchtman team, but as a group they make up a large portion of U.S. luxury consumers: 61 percent.
This group is willing to splurge, but they’re also inherently value-conscious. These consumers conduct a lot of research online before making a purchase, investing much in consumer reviews and customer comments. Luxury Newcomers make up that core group of the better-informed, savvier consumers retailers keep hearing about.
An additional characteristic of the Luxury Newcomers: a willingness to spend more money on fewer, better-quality items (as opposed to buying more, cheaper items of lesser quality). And this group is always in search of the best deals on designer brands.
A closer look at the two leading age demographics that make up the majority of the Luxury Newcomers show some jaw-dropping spending power. The 46 million Gen Xers make up 17 percent of the U.S. population and possess annual spending power of $125 million and a combined income of $1.1 trillion.
Baby Boomers make up about 25 percent of the U.S. population (equivalent to their market share), and are set to inherit $14 trillion to $20 trillion over the next 20 years.
The Fruchtman team closed out their presentation with some eye-opening marketing message information. As much as many industry experts talk about the new media, television is the No. 1 leisure activity of the four main age demographics (Silent Generation, Boomers, Gen X, and Millennials). It only follows that the advertising medium that has the greatest impact on their purchasing decisions is TV ads.
And as much as Luxury Newcomers use the Internet, magazine ads were a close second to TV ads in impacting consumer decisions with online advertisements a distant third to TV commercials. Programming to best get your message to this new luxury group is mainly morning and evening local news.