South Africans are facing a “crisis of aspirations and income immobility” according to the latest Aspirations Study from UCT’s Unilever Institute of Advanced Marketing.
“Everybody has a different understanding of what aspirations are. Aspirations differ in different market segments and are continually changing and evolving due to circumstances. Marketing is a way of fulfilling people’s aspirations and the challenge for marketers is to understand what their consumers’ aspirations, which are always way above their present situation, really are,” said Professor John Simpson, director of the Unilever Institute of Strategic Marketing.
When aspirations aren’t met, that results in frustration. This plays out in different ways: resignation, desperations, anger, blame or moving the goalposts, which leads to “a crisis of aspirations”.
Marketers need to appreciate what their consumers’ aspirations are, in order to understand how they can adapt their marketing and communication strategies to improve consumers lives through product development and brand positioning.
The NIDS (National Income Dynamic Survey) found that there has been little movement of consumers either up or down the income scale over the last six years. 75% of South Africans remained in their same income band. Of the remaining 25%, the majority have moved down the scale.
What marketers think, what consumers aspire to
“What came through in our research time and time again, is a mismatch of what marketers think consumers are aspiring to, and what they actually are aspiring to,” said Simpson.
The problem is that marketers and brand communicators are not coming from the same place as their customers and the market they’re aiming for. Simpson illustrated this with the example of Woolworths who opened a shop in Lagos and closed within six months because they were coming from an upper middle-class perspective that did not understand the customers they were trying to reach.
The South African market place is exceptionally diverse, unlike most other countries which are more homogenous.
Many South Africans are involved in the informal sector – there are around one million businesses classified as informal and this sector is growing rapidly. These are mostly one or two person businesses. Although these small businesses are generating income, the business owners would still prefer to have a job in the formal sector.
Tough economic and political conditions
South Africans are currently experiencing tough economic and political conditions which is significantly impacting on their aspirations. This is affecting all sectors of the market in different ways as their expectations are not being met.
The South African economy is driven by consumption and consumer confidence drives spending. Consumer confidence is negative throughout all market sectors which is presenting a great challenge to marketers.
Only 5.5% of SA households have the ability to save, with a positive net income balance each month. Formal savings are not doing well. At the bottom end, almost every individual contributes to informal savings in the form of stokvels and burial societies.
Then, 45% of South Africans feel a lack of education is holding them back, while 45% feel it’s due to a lack of jobs, and 38% felt they were being held back by family responsibility, the so-called “black tax” which sees many black people allocating 20% of their net income to taking care of family members.
Interestingly, despite the negative economy, the NIDS survey found that 62% of South Africans have high hopes for their future, expecting to move up the economic ladder in two years, while 79% expect to move up in the next five years.
What do South Africans want?
The top eight South African aspirations are:
We’re making a plan
While the majority of South Africans believe their lives would be improved if they had a job, or a better job, this has not meant that they are sitting back waiting for hand-outs. South Africans are getting on with it and making a plan.
Entrepreneurship has increased significantly with growth in micro-enterprise up 104% since 2011.
South Africans understand the importance of education to drive their upward mobility and this is a priority for them to improve their lives.
While formal banking, with their conventional asset-backed products, has failed to react to the changing economic landscape in South Africa, unsecured lending has stepped in to fill the gap.
South Africans’ attitude to debt correlates with their financial stability. Debt is viewed as an enabler that plays a facilitating role – to invest in education, a home or a business, or just to make ends meet.
How can marketers respond to the crisis?
- Keep in mind it’s a journey, not the end-state. Aspirations are continually evolving and it’s important to look at these from a life-stage perspective.
- Keep it real. There’s got to be a balance of expectations vs. reality. Don’t pitch your promise so far from people’s current reality that it becomes unbelievable for them. Painting an indealised picture can make it irrelevant for the market so authenticity and credibility are key.
- Pay attention to the tensions and trade-offs.
Save the minutes – make it possible for people to have more time to do the things they want to do.
Help simplify people’s lives. Help them declutter.
- Empower people to make smarter decisions and take control of their lives. Empathy is crucial here. Do a reality check – how well do you know and understand your customers?
Articulate the practical steps that people can take right now.
Build confidence – a lack of confidence is a primary reason why people hold themselves back. Make mentorship available to people who need it. Businesses and brands have the power to share information, networks and help with soft skills training.
- Embed purpose. Brands are cautioned to shift their outlook to serving society. Many consumers will not support brands who are not supporting the environment, their employees, factory conditions of suppliers as well as sustainable waste solutions.
Involve consumers in the journey of giving back – active community participation fosters goodwill and helps strengthen brand loyalty.
Be inclusive – this is the opposite of segmentation. Build connection with broad society.
- Find a voice and give them a story to tell. South Africans want experiences and escapism. Inspire and create feelings to wake up dormant aspirations. Reaffirm your customers’ sense of self.
“South Africans are eternal optimists, but need to learn how to put their dreams into action. Brands and advertisers need to adapt to this reality and have a role to play in inspiring people to shift from being dreamers to doers,” said Simpson.
