NielsenIQ (NIQ), in collaboration with World Data Lab (WDL), has released a comprehensive generational spending report focused on Generation X, the cohort born between 1965 and 1980. Titled The X Factor: How Generation X is quietly driving trillions in consumer spending, the report reveals that South Africa’s Gen X is an economic powerhouse accounting for 21.4% of total spending.
Generation X worldwide accounts for 24% of consumer spending and represents a market worth $15.2 trillion, which is roughly twice the size of China’s total consumer market. By 2035, their annual spending is expected to peak at $23 trillion.
Zak Haeri, managing director for NIQ in South Africa
“Gen X is a force to reckoned with in South Africa, despite the country’s relatively young population,” says Zak Haeri, managing director for South Africa at NIQ. “SARS data shows that people in the Gen X age band are the country’s top earners. Although a much smaller segment of the population than the under-45s, Generation X is in its peak spending years and represents a major chunk of the spending on consumer packaged goods (CPG) and Tech & Durables (T&D).”
South Africa’s history means that there are stark levels of wealth inequality among the country’s Generation X population. However, middle class and suburban members of Generation X represent a large portion of the country’s consolidated wealth. Their economic importance is amplified by their need to spend on their children and their ageing parents as well as their status as business and political leaders.
Feeling the pinch
While Generation X in South Africa is at the height of its earning power, many of its members report that they are taking financial strain. Some 64% report they only have enough money for the basics, compared to 46% of Gen Xers globally and 53% of the overall South African population. Only 4% said they could spend freely, compared to 11% of their global Gen X peers.
Around 38% treat themselves or their family by upgrading to a premium brand product compared to a cheaper alternative versus 62% of South African Millennials and 57% of Generation Z and 54% of global respondents. One explanation for this is that Gen Xers are stepping up to help their elderly parents, their children, and in some cases, their grandchildren. Being sandwiched between ageing parents and their children has led to a decrease in discretionary spending.
Still keeping ahead of the curve
While not as adventurous as their Gen Z children, many South African Gen Xers are still interested in novel experiences and products. Some 29% like to try new things (versus 46% of Gen Zers) and only 18% report they seldom try new things or risk buying something that might not work out. This suggest Generation X will give new brands or products a chance when they offer practical value or align with their personal values such as sustainability, health or convenience.
Brand loyalty – it’s complicated
Generation X in South Africa is split down the middle between those that are loyal to particular brands and those who are indifferent to brand labels. Just over a third (36%) prefer to buy well-known large brands whenever they can, while 35% report that they buy what they need without thinking about brand too deeply. Just 9% go out of their way to support small brands.
Tech sceptics
Although Generation X grew up during the PC revolution and joined the workforce when the internet was starting to take off, South Africans in this age group appear to be relatively cautious tech adopters. Only 23% allow smart devices to automatically order new products, compared to 35% of global Gen Xers and 50% of South African Millennials.
Just 32% accept product recommendations from an AI assistant versus 39% of Gen X globally and 58% of South African Millennials. Meanwhile, just 29% leverage AI to automate and speed up daily tasks (versus 40% Gen X globally, 59% of South African Millennials) and 65% say they avoid sharing details in virtual interactions because they don’t trust AI data privacy (compared to Gen X 58% globally and 63% of South African Millennials).
Actions for CPG and T&D brands and retailers
The diversity of the Gen X cohort in South Africa means that brands will need a nuanced, segmented approach to capitalise on its spending power:
- Fuel premium purchases across key categories by focusing on attributes that are most valued by higher-income Gen X consumers. These include reliability, functionality, product value (not simply price), health and wellness, efficiency and convenience.
- Secure customer lifetime value (CLV) by earning Gen X trust via long-lasting, multi-use products and promotions that reflect the household finances for lower and middle income households. These include affordability and accessibility, durability and multi-use utility.
- Position products/services as time savers and enablers of care. Dependent Care, Outdoor Recreation, and Household Tools are key categories of growth.
- Deliver omnichannel experiences that build trust first, then highlight convenience.
Haeri says: “Many South African brands are focusing on courting Gen Z and miss significant opportunities with Gen X consumers. Generation X is in its prime earning and spending years, wielding outsized influence despite its smaller population size. Members of this generation don’t chase trends; they invest in what works for them and those they support. Brands that fail to prioritise them now could lose out on a decade of loyalty and lifetime value.”
