Black Tax and the Opportunity for Brands
by Tumisang Matubatuba – Strategist at Yellowwood
The concept of black tax has drawn a lot of attention in recent years. It is something that is considered important yet remains difficult for many marketers to fully understand. The concept of black tax has many layers to it, which has led to various interpretations of what it means and its impact on society.
Many marketers have approached black tax from a narrow, singular perspective, resulting in missed opportunities to successfully engage with black taxed consumers.
What is Black Tax?
Black tax is defined as black working class individuals who are financially indebted towards supporting immediate and extended family. It can take on many forms – for example, having to contribute to household living expenses, paying for a family member’s school fees, and in many cases, being the person who the family turns to when there is a financial need however big or small.
This can become a financial burden for a young person starting out in their career. It may even be viewed as unfair, and when coupled with the recent statistics released in the Stats SA ‘social profile of youth’ report, which highlights that the percentage of black youth in skilled jobs has been static for a period of 20 years – it paints a rather bleak picture.
However, merely portraying a black taxed individual as a victim of their circumstance diminishes the role that they
are playing in the lives of those around them. Marketers would be wise to view these individuals as change agents redefining the opportunities available to their families.
Many young black South Africans have parents who have either financially supported – or have been financially supported by relatives and it is because of this that many black South Africans have the privilege of better opportunities in life. What is of value, is to develop an understanding of the motivation behind those that honour this responsibility towards their family.
Understanding Black Tax
Simply put, through an African cultural lens; family support is an act of Ubuntu, grounded in the virtues of compassion and humanity. Black tax in itself should be seen as being rooted in empowering others for the greater good of the community.
By shifting this perception, it changes the way we as marketers view this generation who are `’bridging the gap.” It also allows us to better understand how the consumption of products and services are impacted by the wider group of people a black taxed individual has to take into consideration when making a purchase decision.
The opportunity for Brands
Good examples of brands that have adapted their offering to cater to the needs of black taxed individuals are brands that can be found in the service industry. For example, FNB now offers a funeral plan that covers up to 21 individuals, catering to the needs of larger families. AVBOB funeral and insurance services offers free transportation of the deceased to anywhere in South Africa, allowing for a family’s already limited funds to go further. Another example is Standard Bank, which offers a loan for lobola, allowing access to a lump sum of money, which might have otherwise never been accumulated through saving.
These brands have understood the dynamics at play in the lives of the target audience, and by changing their perspective, they have found ways to help individuals manage their responsibilities rather than renounce them.
Similarly, there are opportunities in other categories to drive relevance by amending offerings and driving innovation. For example, making education affordable for a generation of scholars supported by one breadwinner. Public transportation packages that offer family discounts and value. Healthcare or insurance offerings that make it possible to include extended family into the cover and investment policies. Family responsibility leave from employers that takes an employee’s extended family into consideration.
These ideas are thought-starters for alternative perspectives on how this specific market can be engaged with in a way that is more meaningful and relevant.
In short, by taking a more empathetic and considered approach, marketers can not only assist in reframing a complex issue, but can also find ways to help South Africans improve their own circumstances – and those of their loved ones.