### High-Income Consumers Spending More on Apparel and Accessories
Retailers are increasingly focusing on driving loyalty with high-income consumers, with apparel and accessories emerging as a key point of entry for winning over the biggest earners. According to a recent installment of the PYMNTS Intelligence series, a January survey of over 4,200 U.S. consumers revealed that the highest earners are willing to dedicate a significant portion of their paycheck to clothing and other fashion-related items. Specifically, individuals earning more than $200,000 a year spend the largest portion of their personal income on clothing, accessories, and personal care items, at 8.5% compared to the population-wide average of 7.2%.
### Retailers Targeting High-Income Demographic
Retailers are actively pursuing this demographic, tailoring their apparel businesses to meet their needs. Luxury fashion eCommerce platform Mytheresa, for example, shared during its recent earnings call that it is shifting its focus towards shoppers with excess cash on hand, rather than aspirational deal seekers. This strategic shift is driven by the better economics, loyalty ratios, and average order value observed in shoppers within the higher income bracket.
### Mass Market Retailers Adjusting Strategies
In addition to luxury brands, mass-market retailers like Target and H&M are also adjusting their clothing portfolios to include items that appeal to high-income consumers. By partnering with high-end designers on exclusive lines, these retailers aim to offer products that are more accessible than what the designers typically provide but are priced higher than the retailers’ usual fare. This strategy allows retailers to cater to the upscale preferences of high-income shoppers without compromising on their brand proposition.
### Shift Towards Direct-to-Consumer (D2C) Channels
While traditional retailers are facing challenges in attracting luxury shoppers, brands are increasingly focusing on their D2C efforts. Luxury brands are stepping up their D2C initiatives, as high-income consumers are showing a preference for shopping directly from a brand’s online store as opposed to a retailer’s platform. PYMNTS Intelligence research indicates that individuals with annual incomes over $100,000 are more likely to favor D2C channels, highlighting a shift in consumer behavior towards direct engagement with brands.
Original Story at www.pymnts.com – 2024-03-27 21:04:10
