Gen Z: living by the power of self-belief
Unlike the previous “Me” generation of millennials, Generation Z is said to value individual expression, avoid labels and focus more collaboratively.
Gen-Zers have a different attitude towards consumption and brands: they want access to goods rather than possession; they’re more ethically concerned, and they crave self-expression. Coupled with technological advances, this generational shift is transforming the consumer landscape - and it’s finding expression in student spending habits.
Youth agency Student Village has just released its latest Student Spend Report, which revealed that Gen Z - also known as centennials - are “switched on, conscious consumers”.
It’s the fifth such biennial report, and their biggest yet, having interviewed 3175 students on 40 tertiary campuses across the country. The student respondents were from first to fourth year: 88% black, 3% white, 7% coloured and 2% Asian.
Of those, 25% shared accommodation, 25% stayed on campus, 36% lived at home and 15% were renting. Those who were renting paid a significantly higher percentage of their income in high-demand centres such as Cape Town and Johannesburg.
The report said previous years’ results uncovered spending sprees and a “huge desire to build Brand Me, the belief in shaping oneself through the formation of external influences”.
However, the latest report paints a different picture because of the arrival of a new generation, Gen Z. “Gen Z is characterised by a tremendous entrepreneurial spirit, founded on hope and a sense of self-created liberation. Many have started businesses at a young age; they no longer save to spend, they save to reinvest.”
Gen Z, the writers say, love money, but their relationship with money is different from previous generations. “While they place great value on authenticity in a cluttered world, many live by the view that money is life, and life is money, with both yielding great power. At the same time, they showed a desire to spend more collaboratively and more consciously.”
This is a generation with different attitudes to spending, investing and saving. They’re debt-averse, treat credit with caution and are more inclined to online shopping than previous generations.
Student Village chief executive Ronen Aires says: “Our research shows that their maturity and forward-thinking sets Gen Z apart from past generations. They see a world in need of change. Disintegrating social structures, false news and over-cluttered 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 oneself. Gen Z are without a doubt at the forefront of change.”
The study says the combined annual spend of the country’s 985000 students is R35billion, or R35328 spent a year on average individually.
Almost 80% of the students surveyed had some parental support; 31% also worked to support themselves; 29% had either a bursary or National Student Financial Aid Scheme funding; and 17% own a business of sorts.
How the students spend their R35328 is revealing: on average, R2498 on car payments; R2417 on rent; R948 on car insurance; R783 on fuel; R705 on food and groceries; R577 on clothing and footwear; R312 on entertainment; R252 on alcohol and on pay TV and streaming, respectively; R205 on data; and only R78 on medical and health care.
Retail accounts with Rage, Sportscene and Markhams are said to have grown in this market, while Edgars and Truworths have lost market share with them.
And Capitec bank remains the favourite bank, beating First National Bank by 8percentage points.
The study found that 21% of students are saving between 50% and 60% of their income.
Sechaba Sello, the marketing manager for Student Village, says they’re encouraged that students are spending and saving more. “Before, only 7% of students saved, now it’s 21%. We found they are saving a lot more to reinvest in themselves and in their businesses. They also make more informed business decisions.”
He says senior students favour Edgars and Truworths, because they cater to an older market of outgoing students who are about to enter the world of work. “Those clothes don’t appeal to a younger market’s taste. These are retail card-holders. And the retailers have a very strong campus presence. It’s more tag-worthy - highly customisable, more outfits to choose from, more trendy.”
In short: while South African students are indebted, they’re starting to invest in themselves - and their environment. They’re becoming more innovative and more collaborative. Like the rest of the population, most of their money is spent on rent, transport and entertainment. There’s not much left for “luxuries”.
One positive finding of the study was that students wanted to learn more about managing their finances. They were interested in learning more about saving, budgeting and investing.