Rich Kids Who Refuse to Let Themselves Be Spoiled
Middle-class upbringings, casual dress and relevance all affect their motivation to spend
The new millionaires are different from you and me, as well as from old millionaires. Not only do they have more money, they also favor a different image than previous generations who showed off their bucks with Rolexes and diamonds. Marketers, to their dismay, find many affluent 20- and 30-somethings shop at The Gap even though they can afford much more.
How young are the new wealthy? One-third of all U.S. households with assets of $1 million or more are headed by someone 18-39, up from 28% in 1990, according to The Wall Street Journal and Mendelsohn Media Research. Sounds promising, but the daunting reality is these rich kids dont spend readily.
Example: Robert Bingham, 31, sold his Internet company for $21 million in 1998 and rewarded himself with a Timex Ironman watch and single-finned Dewey Weber surfboard. He and his wife, Darcy, also bought a new house, but one without the ocean view they could have well afforded. In a world dominated by excess, the couple told The Journal, they are still digesting the fact theyre worth millions. I still havent figured out the scale of it, he says.
Many of these new rich made their money on Wall Street or in high technology, but they come from middle-class or blue-collar backgrounds.
The phenomenon is exaggerated by todays trend toward casual living and dressing. Now that Casual Friday has become Casual Everyday in some businesses, theres less opportunity to display the traditional trappings of wealth.
Merchants have responded by changing their merchandise. Cartier and Montblanc, for instance, now sell stainless steel watches with black rubber wristbands. Cartiers 21 de Cartier Chronoscaph starts at $2,450 retail cheap compared with most of its watches and jewelry. The young wealthy arent in the habit of spending a lot of money on jewelry, says Simon Critchell, chairman of Cartier for North America.
Similarly, Bentley Motor Cars recently rolled out a new auto targeted at the young wealthy. The smaller, sportier vehicle costs $140,000-$170,000, considerably under Bentleys usual $210,000-plus sedans.
Retailers are tweaking their ads also. This past spring, for instance, Rolex placed its first ads in Wired and Georgio Armani did the same in Fast Company, both magazines oriented to todays young corporate and technology professionals. Traditionally, Rolex and Armani have focused on lifestyle magazines such as Town & Country.
Advertisers also use language that resonates with the modest self-image of the young rich. In one of its newest ads, Land Rover shows its sport-utility vehicle plowing through deep water. The ad urges a mogul, a player or even a hotshot to Work Hard. Be Successful. Go Someplace Where None Of That Matters.
Retailers also are attracting these shoppers and helping hone their tastes with personal-shopper services and one-on-one consultations. At Neiman Marcus, personal shopper Jan Batchs client base is growing about 20% a year. But she finds its better to initiate them with, say, a leather jacket by Andrew Marc for $695 rather than one from Bruno Magli for $1,095. Try this with jewelry, taking them up the price scale gradually.
Led by the menswear industry, some retailers are supporting Dress-Up Thursday, intended as an antidote to the dress-down trend. A parallel effort, Saturday Night Special, encourages couples to dress up for a night on the town.
According to a 1999 survey of about 750 corporate benefit executives by the Society for Human Resource Management, Alexandria, VA, 42% of companies have casual dress every day, up from 36% in 1998. Fifty-one percent with more than 5,000 workers are casual five days a week, says the society.
Doing it Right
Executing casual properly isnt easy, however, and companies have learned everyone interprets the new rules differently. After Development Counsellors International, a New York City marketing company with 25 employees, went casual year-round in 1998, some came to work in gym clothes and without bras.
Menswear industry officials are betting the more conservative Gen Xers will be more receptive to traditional dressing than forever-young Baby Boomers, says Judith Rasband of Conselle, an image consulting company that has developed a dress code for companies that wish to join the campaign. People want to feel special, and clothes can do that, she says. Its time to get dressed and turn all occasions into special occasions.
Mark E. Dixon