Mass Retailers Find an Opportunity with Affluent Consumers this Holiday Season

By: IMPAQT Team

Due to a feeling of instability over the past few years, people have begun to change their spending habits, particularly with respect to discretionary purchases. As a shift in consumer spending continues to move toward the conservative side, retail stores are beginning to appeal to affluent consumers. Building a relationship with these consumers early on can provide a great opportunity for mass retailers, even after the recession ends and consumers return to their previous spending habits.

The Affluent Consumer

In order to properly capture the affluent market, mass retailers must first understand the affluent consumer's expectations. The characteristics of the affluent consumer are as follows:

• Smart, Conservative Spending: Although the majority of affluent consumers have a vast amount of assets and optimism for their financial future, they are still being cautious about what they buy. ¹66% of US affluent internet users do research when purchasing something important. These consumers are doing more research for large purchases and more comparison shopping to make sure they get what they pay for.
• Seeking meaningful experiences: As people begin to shift priorities, they are finding more importance in community outreach and spending time with family. They see less value in products and more value in feelings and experiences. ²53% of affluent internet users believe that great brands create experiences, not products, says L.E.K Consulting. They no longer base their success on being able to buy luxurious products, but more on life enhancements and functional products. During the buying cycle, these consumers are looking for a quality product that provides a positive experience.
• Focusing on Value: Affluent consumers are now comparing the actual value of a product with its price to decide if the product is worth the cost. ³70% of US affluent Internet users believe that value is highly influential in their purchasing decision. These consumers want more for less. They are putting more emphasis on quality and raising the bar for what is considered a quality product. In other words, consumers are only willing to pay more if they clearly perceive that paying more means more value.
• Shopping more online: Households with an average income of $150,000 or more are 7% more likely to be passionate about online shopping than households with lower incomes, says L.E.K. in an eMarketer report. These shoppers are looking for a way to save time and get the best deals through their online shopping experience.
• Looking for engagement from the company: Affluent internet users are also looking to build more of a relationship with brands. In a recent study by Dwell Strategy + Research, provided by eMarketer, it was found that 53% of affluent internet users want brands to engage with them in a more meaningful way. This could include coupons through social media sites, responding to problems/questions on their social media pages, or more engaging emails and surveys.

Moving Forward with Affluent Consumers:

Now that you understand who affluents are and what they are looking for in their online shopping experience, you must now understand what this means for your online campaigns. "Marketers hoping to catch the affluents who are 'trading down' must raise the bar in their online efforts – not merely by advertising, but by explaining how their products or services fit in with the 'new' affluent lifestyle," says Ms. Phillips. To make sure your products tell a story that will fit this 'new' lifestyle, IMPAQT suggests a few online strategies:

• Brand Imaging: It is important for your company to align the brand image you provide online with that in other marketing channels. A consistent message will help build trust with these consumers. The most important messages you need to address to this new target market are quality, style, and affordability. All of your marketing efforts should stress how your company can provide them with a similar alternative to luxury goods. Emphasizing the quality and the style of your products will grab the searcher's attention and low pricing will give you a competitive advantage over luxury brands.
• PPC: When evaluating your current PPC campaign, you need to evaluate current and potential luxury competitors, as well as decide what keywords would be most useful to bid on (if you have not been doing so already). By increasing your visibility and aligning it with luxury brands, it will help increase awareness and increase the searcher's curiosity. Also, by focusing on things like free shipping, sales and coupons, you are appealing to the current market's needs. At the same time, you must weigh your opportunity with keywords that the affluent market has already captured with those keywords that these competitors are not yet capturing. Sometimes, competing with large luxury brands in the paid search space can be more costly than it is effective. Using analytics tools can help you decide what spaces are worth competing in.
• SEO: As these consumers spend more time researching products online, they will also begin to trust online peer reviews more than they trust your company's message. Increase your SEO campaign budget and gear it towards quality, style and affordability to make potentially negative information less visible. You must also make sure that all organic results in the search engines match both your brand image and the image you want to address to these affluent consumers
• Social Media: ⁴78% of Affluent Internet Users are active on social networking sites and 29% have a presence on Twitter. Utilizing these social networks can truly help your company reach the target market. Whether you tweet about new products and deals, answer customer questions and opinions on social networking sites, or have a Facebook page that highlights the quality and style of your products, you will show customers that you are listening and keeping up with the latest trends. Social media, like SEO, helps you project a positive image for your brand.

• ^{1 - Research done by Dwell Strategy + Research, and provided by eMarketer.}
• ^{2 - Research done by L.E.K Consulting, and provided by eMarketer.}
• ^{3 - Research done by Dwell Strategy + Research, and provided by eMarketer.}
• ^{4 - Research done by Dwell Strategy + Research, and provided by eMarketer.}