Tracking consumer trends is part art and part science, especially in the rapidly evolving mass market in South Africa. While trends research ultimately depends on empirical methods, to know what to ask and where to find the information one needs depends on an intuitive knowledge of the market itself, writes Lebo Motshegoa.
By immersing itself in the mass market, by interviewing people where they feel most comfortable, in their own homes; and by researching specific trends in both qualitative and quantitative ways, we are able to offer rare and important insights into developments in this important segment of the market.
As we begin 2015, it is clear that social transformation is taking many different forms in the mass market and that previous assumptions no longer hold true.
One of the areas in which this is most evident is in the financial services sector. While more and more people in the mass market now have banking and loan accounts, an altogether different trend is unfolding beyond the confines of traditional banking. A uniquely local institution, the stokvel, is taking on an entirely new role, especially in the urban areas.
Stokvels or savings clubs have been a feature of mass market money management for many years, but now a new generation of young black people are taking the concept into an expanded and even more empowering space.
Traditionally, stokvels were used to save up for year-end supplies and gifts, with members receiving their payouts in time to purchase special items or groceries in bulk to take home with them over the festive season. Now a younger, more educated and savvy demographic is forming and managing a distinctive kind of stokvel, bringing with them knowledge gained in the business sector to benefit members in other ways.
This generation is now using stokvels as an investment vehicle rather than just as a savings vehicle. As has always been the case, members contribute to a communal account, but in the case of investment stokvels, this is used to fund interest-bearing loans that are offered to known and selected individuals or to invest in such areas as property and the taxi industry.
Payouts take the form of a dividend on investment rather than simply as a savings amount, and these are usually made in January rather than December, so that members can fund school fees and uniforms or large purchases like a car.
Interestingly enough, many individuals belong to multiple stokvels so that they can benefit from this mechanism in different ways. They may, for instance, belong to a more traditional stokvel that pays out at year-end, and may use their portion of the collected funds for festive season purchases. They may, however, also belong to an investment stokvel that pays out in January, which enables them to finance other needs.
Either way, a larger and younger segment of the mass market is taking this traditional savings vehicle into important new territory.
Another way in which young black people are re-defining traditional ways of life is by revisiting the concept of the multi-generational household – with a twist. Many professionals and office workers who have been able to buy houses in the suburbs find they long for the social structures and way of life in the townships, which are affectionately known as eKasi, an urban term for ‘home’.
What some of them are therefore doing is moving back in with parents and parents-in-law in the townships and renting out their houses in the suburbs to bring in additional household income. They are nevertheless re-defining the meaning of the mutli-generational household, expecting a level of equality and respect that they may not have been able to expect even a generation ago.
The net effect is that young working people are re-embracing their cultural and geographic roots, but at the same time redefining their roles within the extended family. From a consumer point of view, the additional income they are bringing in from renting out their suburban properties is raising the overall disposable income of township households in a significant way.
Expectations of the built environment
In a related trend, developments in the built environment in South Africa’s largest township, Soweto, have created similar expectations of the environment in other townships. Residents, especially those who have returned to the townships after living in the suburbs, now want full and easy access to the same facilities that are available in Soweto, including large shopping malls, transport systems and other public facilities like clinics and parks.
A specific feature of this trend is that they want access to all of the large retailers and fast-food outlets right on their doorstep. They no longer want to make long and arduous trips ‘into town’ to do their shopping. They want to be able to get everything they need and want close to home. This presents a significant opportunity for retail chains wanting to reach a growing, more informed and more affluent township market.
Changing lifestyle trends
Needless to say, trends such as these in the greater socio-economic environment are giving rise to related lifestyle trends.
For instance, it is now quite acceptable for a single mother – whether unmarried, separated, divorced or widowed – to live on her own, to further her career, to own a car, to purchase property or even to start a business. It is no longer expected that she needs to enter into another relationship in order to lead a successful life.
If single moms do decide to marry again, most of them choose ante-nuptial or accrual contracts in order to protect the assets they have accumulated before the marriage. For marketers, this means that women in the mass market are more socially and financially independent than their mothers and grandmothers were, and now represent a distinct and highly viable market of their own.
This independence is, among other things, evident in the health and beauty market, where there is less emphasis on so-called ‘black’ products, and more emphasis on what individual products have to offer in terms of features and benefits.
Other lifestyle trends in the mass market include a growing tendency to choose cremation rather than burial, not only for financial reasons but also due to changing attitudes to death. In a similar way, many people in the mass market are now opting to draw up wills in order to ensure that their assets are distributed according to their wishes after they pass away.
A new world dawning
All of this indicates how rapidly and profoundly the nature and character of the mass market is changing, driven in many ways by access to smartphones and the internet. For marketers of both products and services, this presents a wide array of opportunities, but it does mean that they need to keep their fingers on the pulse of changing trends and to understand that a new world is dawning in the mass market.
Lebo Motshegoa (@lebomotshegoa) is the managing director of Foshizi (@foshizi), a mass market research and strategy provider operating in South Africa, Kenya, Botswana and West Africa.
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