Archive for January, 2013

Luxury Brands…Affluent Millennials…Direct Mail

Tuesday, January 22nd, 2013

When you connect the dots of recent findings regarding luxury brands, financial demographics, and marketing preferences, they reveal a portrait of “The Affluent Millennial.” Ever so quietly during the past few years of the economic downswing, Affluent Millennials (or Generation Y)  have grown in numbers.

Why so quiet?

First, unlike previous generations of conspicuous consumers, Affluent Millennials don’t flaunt their wealth. You’re unlikely to tell a 30-year old highly-salaried exec apart from her clerical counterpart at a bar.

Secondly, the financial news seems to mostly focus on the negative side of the economy instead of the positive, such as the fact that there’s an emerging wealth segment of affluent millennials out there – over 11 million 18-to-30 year olds with annual household incomes exceeding $100,000 to be exact.

Thirdly, while you may hear a lot about stagnation in the luxury brand market, Gen Y consumers increased their spend in full-priced online luxury retail by 31% in 2011 over 2010 compared to Gen X at 23%, Boomers at 19% and Seniors at 6% for the same period.

Now let’s take a look at how to reach this elusive market segment.

Online digital and email marketing certainly play a role in reaching The Affluent Millennial through their smartphones, tablets and computers. But contrary to direct mail’s perception as too traditional, it is the top choice of U.S. consumers for the receipt of brand communications in almost every category. The preference for direct mail includes 18-to-34 year old consumers. In fact, this group is more likely to say receiving direct mail from a company makes them feel like a valued customer.

Kayla Hutzler points out in her Luxury Daily article that direct mail represents an opportunity for luxury brands to place their messages directly into the hands of prospects and drive them in-store, online or to branded social media outlets. “As the digital world continues to take over,” she writes, “the volume of mail being sent out to consumers has decreased. Therefore, consumers are more likely to open and engage with the direct mail pieces they receive.”

Neil O’Keefe, Senior VP of Multichannel Marketing at the DMA agrees saying that “even if people are placing their orders using the digital channel they are still inspired by a piece of mail showing up in their mailboxes, and then going online to make the purchase.”

And then there’s this:  A study by ExactTarget finds 65% of online Americans have purchased a product or service as a result of receiving direct mail — nearly three times the percentage who have purchased after receiving marketing messages delivered via Facebook (20%) and four times greater purchases prompted from mobile marketing messaging (16%).

It all adds up to luxury spending now being driven by young consumers and targeted direct mail serving as the invaluable channel that can drive them to online stores. “Targeted” being the operative word. That’s where Wealth Window’s Young Affluents come in. Numbering over 850,000, this database is restricted to an exclusive group of consumers under age 35 with a net worth over $250,000.

You may not recognize them at your local nightspot, but we have ways of spotting these modest, yet luxury brand-driven Affluent Millennials. That’s because Wealth Window is on top of all the important targeting trends in luxury brand marketing. Young Affluents are a growing segment of the file because they are quietly becoming an American phenomenon.

 

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