When you think affluence, perhaps Palm Beach playgrounds, Telluride ski vacations and first-class plane seats (when the company jet just won’t do) come to mind. But the last two decades have spawned another class of wealth whose members aren’t typically found driving Rolls Royces or summering in Europe. This new crop of wealthy Americans were born of the post-war boom, raised in middle-class suburbs and benefited from college educations and years of economic prosperity during the bull market of the 1990s. Today they’re the empty-nesters converting their kids’ old rooms to home gyms, the well-heeled shopping at Costco and the workaholics fiddling with their BlackBerries on the express commuter train.

A new breed emerges
Call them the New Mass Affluent. An analysis of Nielsen Claritas financial data defines this emerging group as households with incomes above $100,000 and income-producing assets of $100,000 or more. Although earning $100,000 may seem modest compared to the salaries of the big city elite, that income still puts these households in the top 19% of all Americans—earning more than double the national median income of $49,280. And their numbers are rising: some 22 million households now earn over $100,000, a 23% increase from a decade ago after adjusting for inflation. That’s more higher-earning Americans than ever.

The high-income landscape is improving
The last decade has been especially good to America’s high-earners. When defining the New Mass Affluent, Nielsen Claritas analysts first segmented Americans into three broad categories based on earnings: higher-income households that earn over $100,000 a year; middle-income households earning between $30,000 and $100,000; and lower-income households that earn under $30,000. Focusing on higher-income households, the research confirms what the media has been reporting: while median household income has moved sluggishly over the last decade, more people are joining the affluent class than ever before.

In fact, both middle-income and lower-income households experienced a slight decline as a percentage of U.S. households. Contrary to reports citing a shrinking middle class, the number of middle-income Americans earning between $30,000 and $100,000 has actually remained relatively stable for 15 years—shrinking only slightly from 52% to 50% of the total population. At the same time, the number of lower-income households earning under $30,000 in inflation-adjusted dollars has slowly declined 7%. With the number of higher-income households increasing and lower-income households decreasing, America’s household-income landscape is actually improving.

The rich are different—from each other
F. Scott Fitzgerald had it only partly right: The rich aren’t just different from the rest of us, they’re different from each other as well. According to P$YCLE, the segmentation system that classifies households into 58 types based on demographics and financial behavior, eight distinct segments report both earnings and assets in excess of $100,000 to make up the nation’s New Mass Affluent. However, these consumer types are very different from each other in terms of demographics, life stage, attitudes and—perhaps most importantly—preferences for products and services.

The top-ranked segment, dubbed The Wealth Market, most closely resembles the traditional portrait of old money. Filled with suburban couples, these super-rich tend to be married, white, older—more than 68% are over 55—and empty-nesters.

But the New Mass Affluent also includes seven other segments where the incomes may not be as lofty but are certainly at a high altitude. In Prosperous Parents, middle-aged families are consumed with raising their families, paying off their mortgages and investing in college savings and retirement accounts. Business Class is home to “fiftysomething” executive couples who rank at the top for carrying prestige credit cards. Jumbo Mortgagees features Baby Boom families living in affluent suburban-fringe subdivisions. Tailoring products to affluent consumers at specific life stages can prove extremely useful with these segments.

Affluent shoppers seek value and variety
It seems that most everyone is feeling the “economic squeeze” these days and the affluent are no exception, showing a strong affinity for value and variety found at both mass merchandiser retailers and warehouse club stores. In fact, at times when the less fortunate are strapped for spending dollars, retailers would be well advised to leverage the spending power of the affluent as they are driving the sales growth in all key retail channels.

In the mass merchandise channel, high-earning households with yearly incomes greater than $100,000 increased sales in this channel by 21% in 2007—far more than any other income group, according to data from Nielsen Homescan. In fact, they drove significant sales growth at every other retail outlet—13% of year-over-year growth at convenience/gas chains, 10% at drug retailers, 8% at dollar stores, 7% at warehouse clubs and 2% at grocery.

Shopper appeal varies by chain
Drilling deeper into the channel-level information, it is apparent that certain retail banners carry more clout with affluent shoppers than others when compared with low-income households (salaries under $20,000). Retail powerhouse Target, for example, has a much stronger appeal to the affluent (salaries over $100,000), capturing 66% of these high-income households, compared with just 35% of low-income shoppers—a 31-point penetration difference. Wal-Mart Supercenters, on the other hand, attract more struggling households, cornering 64% of this low-earning income group.

And while there is no penetration difference among low- and high-income consumers at the channel level for grocery stores, there are notable chain preference differences. Low-income households have a stronger preference for limited assortment/low price retailers such as Save-A-Lot and Aldi, and the affluent are more inclined to shop at Kroger, other traditional grocery chains, and upscale grocers such as Whole Foods, Bristol Farms, and Wegmans, etc. Perhaps these findings are not surprising given how these retailers target consumers.

Spread the wealth
With more money to spend, affluent households take advantage of the wide array of retail channels available. Alternative channels such as department, office supply, electronics, news/bookstores, hardware/home improvement, pet and liquor stores all have very strong appeal among affluent consumers.

Grocers competing with mass merchandisers and club stores should look for opportunities to sell gift cards and other joint promotions with retailers in some of these alternative channels to give shoppers an incentive to shop in retailers with less assortment overlap.

Challenging times ahead
Because of changes in the economy, the growth in New Mass Affluent households seen in the last decade is not projected to continue at the same robust rate. Whereas the Baby Boom generation was able to rise up the socioeconomic ladder by going to college and landing well-paying jobs, today’s Generation Xers and Yers face a much tougher climb. Between now and 2012, Nielsen Claritas predicts the number of New Mass Affluent Americans will grow by only 5%—one-third of the projected inflation rate. With last year’s stock market declines and the ongoing credit crisis, New Mass Affluent consumers will become even harder to find and more challenging to sell.

Clearly, companies that seek to gain an advantage should consider employing segmentation solutions as one way to identify these affluent consumers. By doing so, they'll be better able to develop targeted products, differentiated messages and specific marketing strategies to appeal to these pockets of middle-class rich. Continuing to view affluent Americans as a single market of blueblood families is no longer an option. And with more than $22 trillion at stake, the prize is just too large to ignore.