Making sense of SA's rands and cents

The power of Caxton’s ROOTS 2016 research, South Africa’s largest urban community survey launched by SPARK Media, is its ability to provide powerful insights into consumers at a local level. One crucial area of interest for marketers when segmenting their target markets is looking at average household income.

Seven out of the ten top earning areas are in Johannesburg, with the top six spots being Jozi suburbs. They are, in order from 1st to 6th: Fourways, Sandton, NE JHB, Midrand, Glenvista/Mondeor and Northcliff/Melville.

What’s interesting to note is that the next three positions (7th – 9th) are all in KwaZulu Natal: Newcastle (Metro), Umhlanga and Sheffield Beach to Westbrook while Rosebank/Killarney (Johannesburg) brings up the 10th spot. The Western Cape only makes an appearance in 19th position with the suburb of Bellville/Durbanville representing the highest HHI in the province.

However, the picture is extremely different when looking at LSM 10 areas, in which case Bellville/Durbanville ranks 5th, after Sandton, Richards Bay, Sheffield Beach and Umhlanga.

It is necessary to look at all influential factors as precisely as possible when planning for brands and their categories. Geography and shopping behaviour can’t be under estimated when it comes to providing insightful information on who is likely to buy based on where they can be found and what purchasing patterns are prevalent in those areas.

A prime example is Newcastle Metropolitan, which has seen a drastic change in both LSM’s and income. For example, the area has had a 34% increase in the income bracket of R25 000* HHI per month and a 16% increase in PDM’s who work full time versus Umhlanga, which has seen less drastic changes in LSM and income. They have only experienced 18% increase in the income bracket of R25 000* HHI per month, 12% increase in PDM’s who work full time and a 13% increase in LSM 10.

Another example is the 25% of PDM’s (Purchase Decision Maker) in Newcastle Metro area who have looked for/bought computers and accessories in the past 12 months vs. only 15% of PMD’s in the Umhlanga area. This indicates that there is a higher propensity for Newcastle PDM’s to shop in this category.

”As I've mentioned before, we are facing economic pressures, both consumers and retailers alike. As demonstrated, ROOTS 2016 data allows marketers to target, with pin point accuracy and with very little advertising overspill or budget wastage, their exact target market by area," says SPARK Media CEO Gill Randall.

Topline data is available on www.sparkmedia.co.za

For more information about ROOTS 2016, contact SPARK Media on 010 492 8329. Or connect on Twitter @sparkmediasa #ROOTS2016 or find us on Facebook at SPARK Media.