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The Future Laboratory: New Mass Affluents

Date: 1st Mar 08

ARE you ready for affluenza? New Mass Affluents, who account for an estimated 46m households worldwide, are redefining the concept of affluent living – and living in general – for the 21st century. ‘Mass affluent’ commonly refers to those with annual household incomes of around $80k, or £70k in the UK. According to the Boston Consulting Group, one of the world’s leading business consultancies, the world’s mass-affluent households increased by 13.1%, or 10 million households, in 2003. Mass affluents, recognised as the newest consumer ‘cash cow’, may have high levels of liquid assets, but they do not conform to the affluent lifestyle of old. “The rich consumer sector now has many dividing ceilings and each is desperate to differentiate itself,” notes William Cash, editor of Spears Wealth Management Survey. The priority for the New Mass Affluent (NMA) is balancing hectic lifestyles with the quest for a better quality of life, rather than simply accumulating wealth and assets. The opportunities that this presents to brands offering luxury-end goods and services is vast. However, NMAs must be approached with care. As we identified in a recent report for MasterCard, sustainability, quality, family and value are key for this expanding group of consumers.The importance of these factors will increase as economic pressure crunches the disposable income even of this affluent sector. However, shrewd spending and a focus on investment and quality are ensuring they enjoy the fruits of their labours more than other fiscal sectors.Where is the huge increase in NMAs coming from? Often also referred to as the Upper Mass Market, it is important to distinguish them from simple mass consumers. NMAs have perhaps always existed, albeit in smaller numbers, preferring quality over quantity and value over excess. Around 80% are graduates, and the majority are still active in the career market, which shows that their numbers have been swelled by the global push for higher qualifications. Dual-income households have seen an increase of around 75% in inflation-adjusted income versus that of the one-income family of the 1960s and 1970s. Later retirement and the rise in self-employment and business ownership are also adding to wealth; according to the Spectrum Group consultancy, 16% of NMA assets are located in privately held business. “NMAs enjoy recognition of their status through high quality service and the prestige associated with branded goods,” says John Bushby, General Manager, Northern Europe of MasterCard Worldwide. “However, they are careful with their money. Our research shows that 57% will examine all price ranges before making a purchase. Although NMAs can afford to buy the latest designer handbag at full price, they prefer to buy it in the sale.” MasterCard research shows that more than half of NMAs believe income should not be flaunted and over a third believe a high personal income makes them less likely to take financial risks.The emerging picture of the NMA is someone with a subtle approach to spending, who prioritises the desire for experiences and sensory pleasures over the purely material. “This group is ostentatious in very muted ways,” says Richard Baker, CEO of Premium Knowledge Group. “They’re not going to drive a Rolls-Royce, they will get a BMW 3-Series. The Prius becomes a luxury because of its advanced technology, because it’s ecologically and politically correct, and it’s anti-authoritarian. It’s a revolutionary generation with a different set of values.”In some ways, then, the NMAs view their disposable income as something that allows them to stand apart from, not together with, those in the higher echelons of wealth. “The WAGs, Posh and Becks, the new Russian wealthy et al have made conspicuous consumption really naff,” says Nick Compton, features director of Wallpaper magazine. A local, intimate bistro where the owner knows your favourite table is a far more rewarding experience for the NMA than the latest hot destination restaurant. Where they do opt for cool new eateries, they look for ones offering authentic, personalised experiences over the expensive celebrity flair of somewhere like Nobu. Restaurants such as Allen & Delancey in New York and Tom’s Place by Tom Aikens in London, which offers upmarket fish and chips, offer NMAs an experience that blends nostalgia with sustainability. Where the Boomer generation was about status and overt branding, the NMA group buys into products that are built to last, self-actualising, handmade, and very much about insider status – showing subtle, high-end values while communicating they are averse to obvious showmanship. Yaffa Assouline, editor-in-chief of the Luxuryculture lifestyle portal, sums up: “For all NMAs, luxury is having the right information before anyone else.”

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