‘NEO’ consumers drive economic bounce as Amex leads top 10 ‘Premium’ Brand index, Aston Martin sells out
Aston Martin has sold out of some models in Australia for 2021 and the bullish demand pattern is similar for other brands that are attracting a premium consumer segment prepared to continue their discretionary spending through downturns, known as NEOs.
What you need to know:
- Two-step economic recovery being led by higher-spending Neo premium consumer classification
- They have far less interest in discounting and sales
- Top 10 Premium brands table for 2020 sees Freedom and Ikea enter for the first time
Aston Martin can’t get enough stock. They reportedly sold out of some models. It’s just ridiculous. There is really, really strong pent-up consumer demand.
Honeywill says the underlying demand in discretionary spending is coming from those 4.7 million-strong NEO consumer classification. Another 4 million Australians are “aspiring NEOs” who have the mindset but are not as cashed-up.
Dr Honeywill, who is executive director of the Centre for Social Economics, says many brands and marketers struggle with data showing premium, high-margin NEO consumers are far less triggered by discounting and sales than those in the “traditional” consumer classification. Premium consumers, he says, are driving the higher-margin spending economy.
“Amex was surprisingly active during Covid but it was previously ranked second – it’s a neat brand. Pretty simply, NEOs don’t constantly rush to sales and price activation. In many cases, brands are misreading how people behave. Planet NEO is a very robust place to be as long as you’ve got your branding right. More than 70% of discretionary elective spending is generated by NEOs and aspiring NEOs. That’s 10 million people in Australia. It significant in terms of value.”
Australia’s Top 10 premium bands for 2020:
- American Express
- Vintage Cellars
- Harris Farm Markets
- David Jones
- Freedom Furniture
Source: Roy Morgan