The dramatic rise of the luxury marketplace has created a new culture of empowered affluent consumers. Hardworking baby boomers searching for what they've missed, power couples, and the emerging male specifier are just a few of the passionate consumer groups offering no apologies for their desires, as they pursue their newly defined version of the good life.
These new markets provide tremendous opportunity for your showroom, but few of the old sales and marketing rules apply. Today's affluent consumer has come to believe that luxury is experiences, not stuff - and living has become more a question of how one spends than what one makes. In this and future columns, we'll explore what drives the decision-making process for this dynamic new breed of consumer.
The baby boomer generation, as you've no doubt heard, is fueling much of the rise in the affluent marketplace. A few fundamental observations:
-- Born between 1946 and 1964, they are 40 to 58 years old.
-- At 80 million strong, they make up one-third of the U.S. population.
-- They're settling comfortably into their peak earning years and feel secure about their future.
-- They've worked hard, but sense some things have been missed along the way.
-- Baby Boomers control:
- 20% of the nation's financial assets.
- 65% of all U.S. stockholdings.
- 50% of all discretionary income.
-- This group will inherit the largest generational transfer of wealth in history.
More important than the statistics are the prevailing attitudes of the emerging affluent members of the baby boomer generation:
They are self-sufficient and more confident in their abilities, particularly, in their taste and needs.
They feel good about themselves and most of all, they feel good about the future. They've entered into an age of great opportunity and great possibilities. They feel empowered.
They've worked hard and feel they deserve the best. They've evolved beyond consumerism based on flaunting and bragging to one of personal reward and enjoyment.
The core of their consumerism is not about owning - it's about lifestyle and living. They've gone from “keeping up with the Joneses” to “does this purchase make me feel good?”
They make no apology for what they desire. They are entitled to it. They work hard for it. They've earned it. They deserve it. They have nothing to be ashamed of.
They care about image and style as much as their portfolio and assets. From Frank Geary and Michael Graves, to museum stores and enhanced retail environments, there's a new, fanatical appreciation of design.
Their home is their top priority, a lucrative “new investment strategy,” whether the economy is good or bad. Kitchens and bathrooms are at the top of their aspirational list.
They have transitioned from the protection and safety favored by cocooners of the '80s to comfort, intimacy and spending time at home with family and friends. They covet relaxation and contentment.
Perhaps most significantly, an “affluent attitude” has gone mainstream. Everybody wants to be treated like somebody special, creating a hugely significant consumer group now willing to spend disproportionately in specific areas to achieve that feeling.
I'll wrap up with a few initial ideas for positioning your showroom to affluent baby boomers:
Sell Up: These customers value distinctive design, features, and benefits. Don't assume your typical recommendation, or even their initial request, is the best solution. They'll be intrigued by new products, plus they'll be impressed with your expertise. Take the time to present new ideas. And don't forget about add-on sales opportunities. Every sink is an opportunity to sell a faucet, filtered water system, instant hot water, and custom sink accessories.
Upgrade Display Products: Establish new benchmarks for display products in your showroom. Make a commitment to featuring leading edge products, even if they aren't destined to become best-sellers. You won't sell what you don't show. Earn a reputation for always showing “what's next” and you'll earn today's business and tomorrow's loyalty from this audience. Use this year's Kitchen/Bath Industry Show as a scouting and buying opportunity to begin this mission.
Enhance Your Showroom Environment: It's not just about the product, built-in vignettes or working displays. Think about background music. Make a trip to the magazine stand and invest in a few international design publications. Consider bottled water, an espresso machine, gourmet coffee, a selection of teas, even fine wines for select customers. Do your customer restrooms reflect your showroom?