Move over Millennials - Fung Academy Vol. 1: Gen-Z FUNG ACADEMY / INNOVATION CATALYST Insights 1 How...

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Move over Millennials: Using design thinking to imagine the future of retail for Gen-Z.

If you think you finally understand Millennials, then you better

prepare yourself for the new kids on the block (literally). The

Innovation Catalysts from the Fung Academy spent a week

in New York with GBG using design thinking to get to know

the next generation of shoppers and what the future of retail

might look like for them. Not only was the week revealing

for the challenge at hand, but it was proof of the power of

design thinking for generating innovative ideas, even under

tight timelines and limited budgets.

When it comes to the future of retail, Millennials are fast becoming old news. In their place are Gen Z, the first generation to not have known life without

technology. The 12 – 16 year olds that now make up 25% of the American population, are a bigger cohort than Baby Boomers and Millennials combined. As their disposable income increases, so will their power over who wins and loses in retail.

Who are the Gen-Z?

12-16 yr olds

Design Challenge

Imagining the Future of Retail

FUNG ACADEMY / INNOVATION CATALYSTReport Vol. 1: Gen-Z

© Copyright 2017, Fung Academy

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“Girls come with their friends, but they rarely ever buy anything then. It’s usually with their moms or an adult. “

-PINK employee



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But who are Gen-Z really? How has their upbringing in a world facing climate change, economic collapse and Kim Kardashian effected what motivates, frustrates and delights them when it comes to retail? These are some of the big questions that inspired our latest Design Thinking Bootcamp, run for GBGs newest LIO programme hires.

In a world powered by Big Data it’s hard to resist the seductive pull of numbers when it comes to understanding customers. Data tells you what’s happening. But to imagine the future of retail for Gen-Z we didn’t just want to know what their shopping habits were – we wanted to know why they were shopping the way they did. And for that, we turned to empathy based research methods to help us step into Gen-Z’s world, and see it from their perspective.

The great thing about empathy research is that unlike quantitative studies, requiring vast amounts of data, validation and often a great deal of time for collection and analysis, empathy research can be designed, executed and synthesized quickly. It just requires a little creative thinking. In a little less than two days we conducted three different empathy research exercises that gave us a revealing glimpse into Gen-Z’s world...

1. Diary Studies: Tapping into our network, we recruited 20 teens from around the world and asked them to keep a photo journal of a day in their life. Submitting photos and short captions over WhatsApp we saw first hand, the things they value most, their shopping habits, their greatest frustrations and motivations.

2. Observation: Over the course of one afternoon we hit the streets in New York focusing on popular shopping neighbourhoods, to observe Gen-Z in their natural habitat, shopping, socialising and hanging out with their friends. We noticed how they shopped and even stopped to talk to some of them to get deeper understanding of why they shopped the way they did.

3. Interviews: Using our network once again, we recruited 20 parents of Gen-Z teens and asked them to speak to us about their children’s shopping habits and the role they played in the shopping experience.

Empathy Research

In a little less than two days we conducted three different

empathy research exercises that gave us a revealing

glimpse into Gen-Z’s world...

Diary StudiesWhatsApp a day in their life Submitting photos and short

captions over WhatsApp

ObservationObserving Gen-Z in their natural

habitat - popular shopping neighbourhoods in New York

InterviewsInterviewed 20 parents

of Gen-Z teens on their children’s shopping habits



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“We must have gone to 14 stores, and even with increasing the budget, he couldn’t find any sneakers he liked.”

- Jessie, parent of Gen-z



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Through this research we collected hundreds of stories, identified clear patterns of behaviour and gained a deep appreciation for the things that mattered most to Gen Z. These translated into three big insights:

Gen-Z are independent shoppers, but dependent buyers. Gen-Z are in transition – moving from childhood into adulthood. And through our research, it was clear this transition was affecting the way they shop. Gen-Z are allowed to shop independently, we observed them shopping without their parents, browsing, trying on clothes. But when it came to purchasing, independence evaporated. For Gen-Z, getting access to the money they need to buy something involves a series of text messages back and forth to their parents, maybe a photo of the item, sometimes a Facetime call to see exactly how it looks. And then the parent’s promise to return to the store with their child to make the purchase when they had time.

This got us thinking, in the future of retail how might we help Gen-Z be independent buyers while also giving parents the control they want?

Gen-Z see value beyond monetary cost.We heard countless stories of the effort parents put into making sure their children were happy. One mother described a shopping trip with her son that took her to at least 14 stores to try on different pairs of sneakers without finding the right one. In desperation, the mother thought


Insights

1How might we help Gen-Z be

independent buyers while also giving

parents the control they want?

2How might

we elevate the perceived value of a brand in the eyes of

Gen-Z?

3How might we

create an in-store experience

that allows Gen-Z to socialise

and shop at the same time?


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“I’d rather my actions make social impact.”

- Serena, 15 yrs



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that surely by increasing her son’s budget he would be able to find something. Unfortunately, that wasn’t the case. Her son went home, empty handed and was only able to find the right pair after more research into different brands, what they stood for and how they were perceived by others.

This got us thinking, in the future of retail how might we elevate the perceived value of a brand in the eyes of Gen-Z?

For Gen-Z shopping is often a byproduct of socialising.Observing Gen-Z, it became clear their motivation for coming in-store wasn’t always shopping. In Forever 21, groups gathered around phone charging points, chatting about their day at school while waiting for their device to charge. In Kith they headed straight to the cereal bar to buy a snack and eat it with their friends. Shopping might happen, but socialising, connecting with their friends, was most important for them.

This got us thinking how might we create an in-store experience that allows Gen-Z to socialise and shop at the same time?

These insights inspired hundreds of ideas, three of which were rapidly prototyped and pitched to an audience of GBG employees. All in less than a week. All the ideas were validated by the audience and we’ve since learnt that one idea has been progressed for further prototyping with Under Armour. And great ideas weren’t the only positive outcome, bootcamp participants described the experience as “life changing” and “extremely powerful observing people’s real needs”.

This is just one way design thinking, and

empathy in particular can be applied to solve

complex challenges. Do you have a challenge

you’re wrestling with – maybe we can help?

Get in touch, we love to talk (and listen)

[email protected]



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Liz Kreuger

Liz has been using Design Thinking to bring about cultural change for big

organisations like Cathay Pacific, Standard Chartered

Bank and Johnson & Johnson. She’s no stranger

to complexity, embraces ambiguity and loves a good

story.

Susana Osorio

Susana started using Design Thinking more than a decade ago, as an industrial designer.

Spurred on by her frustration with product design briefs that were more business-centered than user-centered, she became a

product development coordinator. Her studies in Entrepreneurship

& Innovation at TUM, paired with her experience helping

companies innovate, gave her a deep understanding of corporate

entrepreneurship.

John Rehm

John provides direction to Fung Academy’s Corporate

Capability Development team, focusing on Fung Group’s

top 3,000 global leaders, with an emphasis on accelerating innovation & learning across

the Group. He founded global design firm IDEO’s Singapore

office, making it the most profitable in the firm. John is also a guest lecturer at

Stanford’s d.school.

Collectively, we’re on a mission to build a culture of innovation capability across the group by equipping people with the skills and mindsets they need to tackle the wicked problems of today. Individually we are…

Who are the Innovation Catalysts?

Sunhera Cariappa

Sunhera is focused on serving people in new & innovative ways.

As a strategic designer, she’s partnered with companies

like Phillips, Australia Post and LVMH, working to understand

problems through careful observation of people and

environments, rapidly prototyping ideas and

communicating them visually.

Daowen Chang

Daowen is an innovation trainer/facilitator/coach along with

eight years software engineer experience. These allow her to

work with global companies such as Bosch, BSH, Google, Lenovo, Disney and Johnson&Johnson

to help them solve the problems and build innovation capability,

as well as to communicate easily with both technical and

business types.

Get in touch We love to talk (and listen) [email protected]

Move over Millennials - Fung Academy Vol. 1: Gen-Z FUNG ACADEMY / INNOVATION CATALYST Insights 1 How...

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