Post-millennial students, though unapologetic about their love for money, are conscientious spenders, entrepreneurial, self-reliant, accountable and altogether more responsible than previous generations, a new study finds. Marketers should take note.
Cosmetics and toiletry brands would do well to refocus their marketing efforts on the burgeoning Generation Z student demographic, the post-millennial cohort born in the mid-1990s. A new study by the Student Village research agency finds that this group is spending the majority of its monthly budget on such products.
CEO Ronen Aires says these students spend on average R2,944 a month on cosmetics and related products, or R35,328 a year — a higher amount than the average South African. He says they now make 64% of their purchases online, are savvy spenders and buy only what suits their lifestyle.
It’s also evident from the study that SA students are concerned about their financial futures in the low-growth economy. Nearly 40% are saving 20%-40% of their monthly income, while one in five saves 40%-60% of it.
Apart from toiletries and cosmetics, priority purchase items are food and groceries and after that fast food and mobile telephony. Aires says retailers such as Rage, Sportscene and Markham have grown in this market at the expense of other, traditional retailers. Capitec Bank has leapt while others have lost share.
Today’s students show greater responsibility in managing their debt and are spending less on cars and motorbikes, which are seen as "unnecessary in the pursuit of independence".
The survey also finds that Generation Z is characterised by "a tremendous entrepreneurial spirit, founded on hope and a sense of self-created liberation". Many in this cohort have started businesses at a young age and are saving to reinvest rather than spend.
Despite 2018 being one of the most challenging years economically and socially, members of Generation Z have shown great resilience "as their spending remained consistent, staying just under inflation, and [their] saving increased, indicating higher revenue". They are unapologetic about their love for money. "They place great value on authenticity in a cluttered world, but many live by the view that money is life, and life is money, with both yielding great power."
This market segment has also gravitated to the online environment, where sites such as Takealot and Uber Eats are widely used. Debt is approached with great caution, and credit has declining appeal.
Student Village COO Marc Kornberger says: "Our research shows that their maturity and forward thinking sets Generation Z students apart from past generations. They see a world in need of change. Disintegrating social structures, false news and overcluttered social media have altered the way they think. They are switched on, more aware, and in search of bespoke solutions that suit their lifestyles. Never have we seen a generation that places higher importance in believing in itself.
"While their primary income source remains their parents, the students of this generation are working towards being self-sustainable in the future."
Marketers should also be aware of where this demographic is heading.
Says Kornberger: "These young people are hard at work, geared to self-directed liberation, and are showing greater accountability and resourcefulness than previous generations.
"They view jobs as things of the past, as the mindset has shifted towards entrepreneurialism. Generation Z students have great ambition to improve not only their own lives but the lives of family and friends, as well as the country and the planet."