Marketing to the Upper Crust
According to panelists at a recent NRF workshop entitled "Retail Marketing to the Mass Affluent," these consumers - defined as the 10-20 percent of the population that have a disproportionate amount of discretionary income - aren't really so different than the rest of us, as they have high expectations for service, value, and staying on-trend.
The panel was moderated by David Braunstein, VP consumer services at MBS and included: Lisa Gavales, CMO, EXPRESS (recently of Bloomingdale's); Karl Haller, VP strategy & business development at Brooks Brothers; Sylvia Morrison, director database marketing for the Cleveland Clinic; and Tom Jarrold, SVP global marketing & creative at Armani Exchange.
The panelists described some differences in their market positioning. Lisa Gavales said that the EXPRESS customer is aspirational and wants to be on-trend but is not affluent yet, while Bloomingdale's makes brands accessible to the mass affluent. Karl Haller noted that Brooks Brothers was founded in 1818 and stands for high quality, fair prices, and value. Sylvia Morrison said that the Cleveland Clinic has 37,000 employees, is the third largest hospital in the U.S., and is ranked by U.S. News & World Report as among the top five American hospitals overall and as the #1 heart center. Armani Exchange, according to Tom Jarrold, targets 18-28 year olds, who are social and club-going types, providing them with accessible Armani.
Ms. Gavales of EXPRESS said that mass affluents don't want to be categorized and need to be treated individually while Mr. Haller of Brooks Brothers said that the expectations of many consumers are similar, it's just that their ability and willingness to spend is different. Brooks Brothers relies heavily on its in-store associates to build one-on-one customer relationships.
Mr. Jarrold feels that the expectations of the mass affluent are higher and it's important to use emotional ad campaigns with this group. Armani Exchange runs four new ad campaigns per year, has a focus on using the latest dance music to provide an in-store "club-like" music experience for shoppers, has its own music label producing two new CDs per year, has its own style website - www.styletraxx.com - and creates its own music videos for fashion shows.
The Cleveland Clinic finds baby boomer consumers expect quick answers from physicians so they pride themselves on answering patients' (and prospective patients') e-mails rapidly. They even provide patients with the cell phone number of a contact at the hospital. The Clinic also provides a medical concierge service for high spending patients, offers a high-end hotel on its campus (with room rates ranging from $250 to $1,000 per night), has special floors and rooms for the affluent, and partners with The Canyon Ranch to provide special cuisine.
Armani Exchange believes clothes are about fun in addition to comfort and that the lifestyle it offers shoppers is a magnet. They offer 12 new clothing collections per year and have a universal brand message with local touches as well.
Clientelling (keeping a "black book" of regular customers and contacting them for special sales, etc.) is important to all the panelists as they want to ensure that consumers are getting relevant messaging. Brooks Brothers is looking to use clientelling to help them organize around customer needs in addition to store events. Armani Exchange is moving marketing dollars online with programs such as a MySpace page and their Styletraxx website, and making sure its marketing plan delivers short, loud bursts around its collections or product launches.
Overall, it seems that the key trait of the mass affluent is that they are big (but not the biggest) spenders with great upside potential as their income climbs. But, they need some sort of special treatment if retailers are to attract them.
Discussion Questions: How are the mass affluent different from mainstream consumers? What marketing and merchandising do consumers with above average spending habits respond to best?