SA’s young millennials: invincible, bright-eyed, money-saving big-earners
by David Smythe. Based upon what they tell us about themselves, their career goals and aspirations, South Africa’s younger millennials — dubbed the culture creators — won’t be anything like older millennials.
This is another key takeout from a comprehensive study of South African youth, completed towards the end of last year; the objective was to analyse the attitudes, behaviours and values of the youngest millennials and oldest Gen Z South Africans.
Value different things
One of the critical differences highlighted by the research is that South Africa’s younger millennials value different things in the workplace than their older millennial counterparts, starting with money. This has major implications for brands in the financial services space, as well as the retail environment.
Young South Africans may only now be entering adulthood with limited purchasing power but there are indications that they’re more conservative with their money than previous generations, and prefer financial independence. Most of young South Africans say that earning a great salary while making a difference is most important to them. Oh, and, they really, really don’t want to work for you.
Entrepreneurship is seen as a way to not have to rely on anyone or anything else, and their version of it will likely be focused on sustainable ‘singles’ and ‘doubles’ ventures. Their overriding attitude is that, if the job opportunities aren’t ripe for the picking, they’ll go out and carve their own success. The research showed that 66% of young South Africans want to work for themselves, 19% to work at a company and 15% to be an online influencer.
Another way they differ is that the younger millennials take on less debt, and they expect more from their money; they prefer to save it. Their interest in holding on to money is more from a desire for stability, rather than status. By and large, they feel insecure about their financial futures. Being prepared for retirement and their ability to pay off loans in the future worry them in the present. So, they prioritise saving over spending and are financially quite conservative.
The figures show that 81% says that saving is important for them. And, while 9% has accumulated more than R12 500, 56% has accumulated less than R1000 in their savings account. That said, a whopping 85% have a savings account vs only 16% with a credit facility, 14% a student loan, 13% a retirement facility and 13% some form of life insurance.
Most interestingly, stokvel membership — something they would have known their grandparents and parents to have — sits at only 7%. This is a large cultural shift.
Some 40% is saving for basic living expenses, 38% for education, 23% a car, 21% a home, 15% electronic gadgets, 15% a special life event, 9% retirement, and only 3% not saving at all.
Underlining the importance of savings and financial security, asked what they would do once their savings account reached R5000, 28% would continue to save it, 23% would spend it on necessities, 21% would put it towards tuition, 14% would pay off debts, 8% would share with their family and 3% would just spend it.
If forced to spend the R5000, 19% would just spend it on clothes, 18% would buy necessities, 17% would put towards tuition, 16% would pay off debt, 11% would give to their families, 8% would buy the latest tech, 4% would experience something new and 3% would travel.
This low interest in ‘experiences’ — something new or travel — is a hallmark of the younger millennials. Contrary to their millennials elders, younger South Africans are more inclined to spend their money on buying high perceived value items (albeit infrequently), rather than the stereotypical accumulation of experiences. Simply put, they’d prefer a cool product, instead of a cool experience. To a large extent, they’re playing asset catch-up.
Money is spent on food (88%), transport (44%), savings (29%), entertainment (21%), beauty and grooming (18%), technology (16%), clothing (16%) and books and music (6%). Bricks and mortar retail outlets get the lion’s share of their money — 90% for clothes and 94% for groceries, compared to just 7% and 2% spend using their mobiles, and 3% and 4% at markets or roadside stalls.
In conclusion, the ‘rejection’ of the experience, coupled with being more likely to save for the future than their experience-seeking elders, will put pressure on brands. Ecommerce, however, represents a big opportunity for those who can get it right, as shopping online, or, more importantly, on their mobiles, has not yet reached critical mass among younger South Africans.
David Smythe, the strategic planning director at FCB Cape Town and an exco member, led the above study of South African youth using FCB Africa’s insights tool, FCB Alchemy, in partnership with Answered Insight, which produced the above analysis. He believes that to be brave is to embrace change — embracing something that you’ve perhaps not seen or done before but which will utterly pulverise the status quo. He is a passionate advocate of neuromarketing and devotes his professional and spare time to understanding what makes human beings tick.
“Motive” is a by-invitation-only column on MarkLives.com. Contributors are picked by the editors but generally don’t form part of our regular columnist lineup, unless the topic is off-column.
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