Amazon’s Customer Strategy: New HQ Edition

At the beginning of the summer, I posited that Amazon bought Whole Foods not as part of a distribution or merchandising strategy but rather because they wanted to cater to the mass affluent consumer.

Now that Amazon has begun the great HQ2 competition, I’d like to take a moment to extend the mass affluent factor to geography.  In other words, where would Amazon build its second headquarters if they wanted to keep the mass affluent consumer in mind?

At first glance, this question seems irrelevant.  After all, Amazon already sprawls across this country with major offices in places like Newark, NJ and Grand Forks, ND.  Myriad distribution centers fill spaces in between.  They once got me a router the same day I ordered it in NYC from Kentucky.

That said, companies often relocate to get in touch with an audience or a workforce.  Many car manufacturers have design HQs in Southern California to take advantage of the region’s car culture.  GE recently announced a move of their headquarters from Fairfield, CT to Boston to attract workers interested in a more cosmopolitan environment (or maybe because GE likes Harvard better than Yale).

So where would Amazon put HQ2 if they wanted to immerse themselves in mass affluence given that they want to avoid the West Coast and such wealthy citadels as Silicon Valley, Santa Barbara and Palm Springs?

Don’t try to make it here

I’ll cross New York City and environs off the list first.  

In the aggregate, New York City has more mass affluent consumers than anywhere else in the country.  However, it also has more local anomalies than anywhere else.  To name a few, we have investment bankers who use public transportation, buildings chock full of luxury apartments whose owners live somewhere else and a reality that families earning $200,000 per year consider themselves to be just scraping by.  Our mass affluent consumers are just too weird, from the national perspective, to represent mass affluence as a whole.

Quintessential Mass Affluence

So if New York is too weird, what city sits at the bulls-eye of mass affluence?  (Speaking of bulls-eyes, I think we’d have to rule out Minneapolis due to Target’s influence.)  First, consider the components of mass affluence.  Most marketers tend to define it in a straightforward fashion, by income.  Mass affluence tends to begin at $75K (or roughly 50% above median household income) and extend to $200K or $250K.  They also include educational attainment (some college or more) and employment type (white collar).

However, the basic demographics don’t really take into account the key attitudes of the mass affluent.  I’ve held for years that time, more than money, defines the mass affluent.  Proverbially speaking, they have more money than time.

So, where do we have people with the least time?

Trafficking in stereotypes

You could engage mathematicians, statisticians and demographers to answer the question of who has the least time.   You could, but I’ve got other things to do.  So, as a measurement for least available time, I’ll use a proxy: the most time spent in traffic.  According to a study by navigation device maker Tom Tom,  the top 5 cities for traffic all sit on the left coast except for New York (which sits on the left coast of the East River, I guess).  Which leaves us with #6:

Ladies and Gentlemen, Your Miami Amazonians!

I predict that, like LeBron, Amazon will bring its talents to South Beach.  Wait, maybe a bad example.  Miami and South Florida actually have a lot going for it in terms of suiting Amazon.  In Miami-Dade County, 28.1% of households earn above $75. Nearly two-thirds are Hispanic according to 2015 US Census numbers, thus giving them a strong presence in a fast-growing demographic as well.  Its status as de facto capital of Latin America makes Miami a natural jumping-off point for lucrative markets in South America.  I hear the nightlife and cultural opportunities ain’t bad, either.

I’m just horsing around here, but if you spot Jeff Bezos with a manicured five-o’clock shadow, Wayfarers and a t-shirt under a pastel-colored blazer, don’t say I didn’t warn you.

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