HENRYs in Recession and What Luxury Brands Can Do

Connecting with the HENRYs in a Changing Economy: How will the HENRY – high earner not rich yet – consumers react as the economy turns south and what can luxury brands do about it?

With inflation running at a 40 year high and the U.S. economy on the precipice of recession, if it already hasn’t entered it, consumers are pulling back, tightening their belts and looking to stretch their dollars farther.

The affluent, those at the top third of U.S. households based on income, are not immune either, with 33% of HENRYs believing we are already in a recession and another 32% convinced a recession will arrive within the next six months.

Already 45% of HENRYs have cut back luxury spending from a year ago and an overwhelming majority (63%) say now is a good time to limit purchases, according to a recent Research The Affluent Luxury Tracking survey.

For luxury brands, this comes on the heels of the pandemic’s disruption which resulted in a 22% loss in the personal luxury goods market from 2019 to 2020, according to Bain. While the industry recovered immediately in 2021, even topped 2019 revenues by 1%, luxury brands face another test if a recession sets in.

While HENRYs are not the luxury industry’s primary target consumer – that is the high-net-worth and ultra-affluent consumers with incomes over $250k+ – they still depend upon the lower-income but still affluent, next-generation HENRYs for a good portion of revenues and growth.

This trend report digs into the demographics, values and attitudes of HENRYs as they confront potential financial challenges in the current economy, in the face of which, HENRYs are more likely to trade down not up to luxury.

Luxury brands need HENRYs to continue trading up and this report will provide research and insights to help them keep their HENRY customers engaged through whatever the economy throws at them.