The Shullman Research Center’s recent brief focused on American Millennials’ buying power and affluence levels within three age segments. That column induced many readers to ask us how American Millennials compare with American Gen-Xers and Boomers as regards their affluence and buying power. As some marketers also target Seniors (the 30 million adults who are 70 or older), we decided to include them in this brief, which focuses on the following four frequently-used measures of affluence in America: personal income, household income, personal net worth, and the purchase of one or more luxuries in the prior twelve months. Because some marketers focus on average (mean) measures and others focus on medians, we are including both in the following exhibit.
Depending on the measure of affluence a marketer chooses to address, materially different numbers of American consumers would be deemed to be targets. The exhibit above shows that American Gen-Xers have the highest proportion of "high-income" consumers, as well as average and median levels, when a marketer targets by either personal or household income. If wealth matters, i.e., having a personal net worth (the person's share of total household net worth) of at least $1 million, then American Millennials technically come into the picture along with Gen-Xers. Notably, though, many Millennials are still living at home with their parents or sharing their living quarters with other young adults, and they tend to have very little personal income at this stage of their lives. American Seniors are also potential affluent targets when median personal net worth is the metric. Last, as regards behavioral as opposed to demographic targeting, American Millennials come back into consideration for luxury marketers, as they are the American generation with the largest number of luxury buyers. However, the typical amounts they spend when buying luxuries tend to be materially lower than the older generations.
From our perspective and experiences, American "affluence" is best described however affluent marketers define their marketplaces. Just as we know that luxury is best described through the eyes of the consumer, affluence is best defined through the eyes of the marketer.