Pamela N. Danziger
Pamela N. Danziger, President, Unity Marketing
The Home Trust International (HTI): Understanding your client is essential, and you’ve become to go-to resource for dozens of luxury brands. Where did you get your start in market research?
Pamela N. Danziger (PND): Back in the 1980s and the early days of the information revolution, I got my master’s degree in library science from the University of Maryland. I decided on this course of study after having such great experiences with reference librarians at Penn State’s Pattee Library while I was getting my bachelor’s degree in English literature. I thought it was wild to have such access to so much important information. And so I began my career dedicated to information – collecting it, organizing it, and using it.
When I was studying for my MLS, the information age was in its infancy. Computers, mainframes, not desktops, were just beginning to be used to manage information, so this was the area I specialized in. I started working for a DC trade association to manage their library, which was heavily focused on periodical literature and newspaper clippings, not books, My job was to convert all those paper files into an automated computerized system.
That led to my next job working for AT&T, which was being broken up into regional ‘Baby Bells’ supported by a central research and development group that came out of the old Bell Labs. That is the group I worked for, again developing internal information databases and research resources to support the marketing arms of the seven regional phone companies.
My last corporate job was with The Franklin Mint, outside of Philadelphia where I managed the research library, including the corporate archives of TFM direct mail pieces, again converting traditional card catalogs and paper index systems to computerized databases.
I loved this work, but it was clear to me that many of the information needs of the business managers I was supporting were not satisfied by relying on publicly available, published information. They needed original and exclusive sources of information, which then led me to customized market research, conducting both qualitative and quantitative studies.
I founded Unity Marketing in 1992 to provide the kind of specific, reliable and valid research services for companies like The Franklin Mint, manufacturing and selling stuff people didn’t need, but really wanted, like gifts, collectibles, jewelry, home decorative items. Thus the title of my first book, Why People Buy Things They Don’t Need, which came from a question posed in a meeting back at The Franklin Mint. I needed to answer that question, thus Unity Marketing was born.
HTI: What led you to the luxury market and the affluent consumers?
PND: My research led me straight to the luxury market as the next big growth market, and one that was underserved by market research. Through the 90s Unity Marketing built a strong business serving marketers in the giftware, collectibles and decorative accessories markets. But then the Beanie Babies boom came crashing down and retailers that served those markets lost the ready supply of revenues and customers that Beanie Babies represented. The collateral damage of Beanie Babies bust spread throughout the giftware and decorative accessories market and took many established brands out.
As that market tanked, I identified luxury as the next big thing and decided to pivot toward that market, starting with a major study of luxury consumers with House & Garden magazine as a sponsorship partner. That resulted in my second book, Let Them Eat Cake: Marketing Luxury to the Masses, as well as the Classes.
As you can imagine with House & Garden as our original partner, luxury consumers’ purchases of home goods and services as well as their relationships and attitudes towards their homes was a major area of investigation for Unity Marketing and has been so ever since.
HTI: Where is your research directing you today?
PND: I wish I could say there is a market out there ready to boom like luxury did in the early part of this century, but I can’t. The current economy is really dragging and it is impacting consumers both up, down and in the middle range of the market.
That said, I continue to focus on the affluent consumer segment, which we define as those with household incomes at about the top 20% of all U.S. households, or roughly $100,00 and above. The affluent are still the ones with discretion to spend, though our Affluent Consumer Tracking Study shows that their spending is restrained from where it was in 2010-2012, immediately after the recession.
Today the affluent consumers have settled into a ‘new normal,’ which means they are making more considered purchases, discovering new ways to shop that are both more efficient and cost effective (i.e. the internet), and just generally holding onto their cash because the future economy is so uncertain.
But despite the headwinds, there are still segments of opportunity where businesses can prosper. For example, in the retail industry those segments dominated by specialty independents are growing far faster than the industry norm. I’ve published a white paper about this trend entitled Small Is the Next BIG Story at Retail.
Discerning affluent customers are looking for special, more personalized shopping experiences and finding it on ‘Main Street’ not in the malls. My new book, Shops that POP! 7 steps to extraordinary retail success is written about, and for, specialty retailers and how to take advantage of the new back to Main Street trend.
Many of The Home Trust International members can take advantage of this shift back to Main Street. Manufacturers need to help their retailing partners understand the new affluent customer in order to deliver the kind of extraordinary customer experiences they desire. They need to shift the focus from the products they sell to the customer they serve with heightened expectations, needs and desires. This will help their design and retail partners grow, and their product sales to grow along with them.
Interior designers can find opportunities on Main Streets too. During the recession, many design firms that had retail showrooms closed them or scaled way back the retailing side of their businesses. However, the time may be ripe to reevaluate those decisions. The right retail location coupled with a forward-thinking, service-oriented concept and a community of affluent customers can give a boost to the bottom line, both in retail product sales and by attracting potential new clients in a non-threatening retail environment where they can get to know you and learn about the extra design services you offer.
I recently wrote a blog about a Scottsdale, AZ design firm, MMB Studio under the direction of designer Matthew Boland, that opened a retail shop, The Main Dish, to fill a need for designer-quality tabletop and decorative home furnishings in the South West region. His shop has found great success and expanded to include giftware and other related items that attract an even wider customer base, many of them visitors to the area, who learn about the design services by participating in the shopping experience at The Main Dish.
HTI: And finally, you have uncovered an important new affluent consumer segment call the HENRYs. Who are the HENRYs and why are they important to The Home Trust International members?
PND: Oh, HENRYs! This is the most important customer segment for any brand aimed at the high-end, luxury customer. HENRYs are the High-Earners-Not-Rich-Yet consumers, with household incomes $100k-$249.9k. HENRYs are doing better than nearly 80% of all U.S. consumers, though they haven’t reached the top 2-3% of Ultra-affluent income levels, which starts at $250,000. They are the mass-affluent consumers with discretion to spend.
Why the HENRYs are so important for The Home Trust International members is that while Ultra-affluents are their most important customer target today, most Ultra-affluents go through the HENRY income stage before they reach ultra-affluence. So the young HENRYs (aged 24-44 years) are their future luxury customers.
Many young HENRYs on the road to ultra-affluence are already in a life stage associated with growing needs for home furnishings and design services, plus many have more sophisticated tastes that incline them toward luxury-leaning offerings. Young HENRYs are often starting families, buying new homes or trading up from their starter homes, and so are poised to make major investments in their quality of life.
Marketers and retailers offering luxury home furnishings, positioned as a smart investment for superior quality and design plus lasting value, can find opportunities selling to HENRYs, even if the HENRYs have to stretch their budgets to reach your level. However, if your selling proposition isn’t spot on for the HENRYs, you could well lose them to other marketers offering good or at least acceptable quality options for less. The key is to understand the HENRYs, their lifestyle and their luxury aspirations.
I am currently working on a new mini-book entitled Home for HENRYs: Where home marketers can find new customers. Once I complete it, I hope to bring the news to you and The Home Trust International community.
HTI: We look forward to reading your new book as we’ve enjoyed all your books. Thank you for your time today and for all your contributions to The Home Trust International.
Pamela N. Danziger
Speaker, author, and market researcher Pamela N. Danziger is internationally recognized for her expertise on the world’s most influential consumers: the American Affluent. Her latest book, Shops that POP! 7 Steps to Extraordinary Retail Success, reveals the secrets to crafting a retail shopping experience that’s irresistible to high-value shoppers looking for something special.
As founder of Unity Marketing in 1992, Pam leads with research to provide brands with actionable insights into the minds of their most profitable customers.
Pam received the Global Luxury Award for top luxury industry achievers fromHarper’s Bazaar. She was named to Luxury Daily’s Luxury Women to Watch in 2013. She is a member of Jim Blasingame: The Small Business Advocate’s Brain Trust and a contributing columnist to The Robin Report.
She is the author of five books including her recent mini-book, What Do HENRY’s Want?, explores the changing face of America’s consumer marketplace. Pam is frequently called on to share new insights with audiences and business leaders all over the world.