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“In 2011, in the wake of a massive reset of the economy, it appears mass affluence may be a thing of the past.”

– AdAge, The New Wave of Affluence White Paper

40% of the wealth in America is controlled by 1% of the population. The Wall Street “occupiers” are rallying around this statistic. But so is Madison Avenue, although in a very different way. With economic pressures driven by the recession, the demographic profile of those spending money in America has shifted from the “mass affluent” middle classes to the truly affluent. And people have noticed, from Madison Avenue to corporate board rooms, resulting in  brands that are increasingly marketing themselves toward those with money to spend.

These aren’t just luxury brands. I saw an interesting example in the news the other day: US colleges and universities have been quietly increasing their percentage of foreign student enrollments: students who don’t qualify for financial aid and can pay the full tuition price tag without assistance. While I love the idea and possibilities of sharing cultures and bringing sharp minds from around the world to study in the US, I would believe there is a need to ensure a minimum amount of US students are educated in our colleges and universities to keep our economy and country competitive.

With the privatization of many of the needs of civil society, some corporations – and therefore their brands – have taken on important societal roles. Do certain corporations – beyond those that are currently regulated – have social or ethical responsibilities to remain focused on a majority, despite profitability? Peter Drucker, my go-to for intelligent thinking on CSR, I believe would say no. He concluded any negative social impacts of business should be eliminated, but not at the expense of impacting the performance capabilities of the business itself.

If history is an example, this down market is likely an extended wave that will effect the way a generation consumes. Over such an amount of time, the attention of brands toward the affluent becomes less an issue than an opportunity that – in many industries – will be harnessed  by entrepreneurial thinking and innovation applied to the needs of the mass consumer, delivered at prices they can afford. For every brand that decides to appeal to the $250K+ households, others will pivot or be created to fill the gap for the $50K households. (In his blog post on “Hourglass Branding,” our Chairman discusses the importance of brand strategy as brands move  up and down the value scale in the face of these economic shifts.) I would assume innovation for the mass consumer may be more difficult where entrenched companies refuse to or cannot innovate themselves, within industries with high barriers of entry, whether by cost, infrastructure or IP ownership.

Whether this is a temporary shift or an extended trend, brands that are core to the American way of life (cars, phones, transportation, etc) must tread carefully if they decide to build their strategies around the needs, desires, expectations and affordability of the affluent. Targeting the affluent may be a matter of survival or choice, but it may also come at the expense of the mass consumer feeling increasingly alienated. The current Occupy Wall Street protests have largely avoided shifting focus from financial institutions to corporations and brands, because such a significant number of those corporations and brands are major employers, and jobs are so important right now. But if the polarization within our society grows, and enough brands key to our lifestyle give priority attention to a small minority of “haves”, I suspect the Occupy backlash will continue to grow, and as it does, spread from Wall Street financial institutions to Madison Avenue brands.