Rise of the nillionaires
A new class of shopper — encompassing 70% of SA’s population — has little or no money because of the Covid-19 lockdown. Yet they make up the bulk of the labour force and are a category brands should pay careful attention to
As the SA economy starts up again, brands and their advertising agencies need to focus on a new demographic emerging from the lockdown crisis. "Nillionaires", says research agency Kantar, are a new class of shopper, facing more troubling times than usual and making up about 70% of SA’s population.
Kantar says its findings show 69% of people who fall into this category are below the age of 34, 55% are women and all are surviving on a household income of about R5,000 a month. The agency says it’s critical to leverage insights into this market for business growth, as Covid-19 has become the great marketplace equaliser.
Nillionaires are not a monolithic group; each household’s structure and every individual is at a different station in life. The only thing they have in common is that they have little or no money. Yet, says Kantar, they are the lifeline of the SA economy, make up the bulk of the labour force across key industries and are essential for both production and consumption.
This is what life is like for this demographic under lockdown: most are stuck at home, feeling uncertain, anxious and depressed, both about their families and their financial future as there’s been a radical decline in income. With less money in hand than before, they’ve had to make trade-ups on staples and personal care products; trade-downs on meat, snacks and soft drinks; and trade-offs on luxury items that are no longer a priority or have become unaffordable. So, they pass the time on free entertainment and social media platforms, as well as on basic chores and cooking.
But Covid-19 and the lockdown have not eroded the desire for people with little money to spoil themselves, nor have they put an end to their standing plans — they’ve simply been paused. Notes Kantar: "Our sample revealed that nillionaires are planning on treating themselves and their families with hot wings and pizza, and will be buying nappies and winter clothes for their children and grandchildren as well as visiting the local hardware store post-lockdown."
The agency recommends a three-pronged approach in satisfying this market segment: brand communication that inspires hope and optimism with positive societal impact; availability of the right product in the right place; and readdressing pricing and promotion strategies for where and when they’re shopping.
Kantar Insights Division SA CEO Ivan Moroke says tone is critical. "Just as people have many ways of responding to crises, there is no single way for a brand to respond — but above all, brands need to be authentic. Connecting with consumer needs and attitudes is essential, but brands must be true to their own character too.
"If your brand is joyful and energetic, speak to share happiness. If your brand is the serious sage, share expertise and information to feed our desire for knowledge to navigate the world. And if you’re warm and caring, it’s a great time to share your generosity, care and empathy with the world."
For brands, Moroke says engaging now is essential to maintain relevance and build meaningful connections; consumers will remember the brands that were there during difficult times.