OC&C survey of 15,000 consumers uncovers distinct Gen Z characteristic

30 January 2019 Consultancy.asia

An emerging borderless tribe; that’s how OC&C Strategy Consultants has characterised Generation Z following a comprehensive study of the globe’s youngest generation.

As the older members of Generation Z reach maturity, born from the mid-to-late-nineties and on, the international strategy and management firm OC&C Strategy Consultants has undertaken an in-depth study of the world’s generational habits and perspectives, describing those of Gen Z as belonging to an emerging borderless tribe – hungry for uniqueness but with the most globally consistent attitudes and behaviours.  

In an effort to gain a clearer understanding and insight for business and retailers into the youngest generation, OC&C altogether surveyed more than 15,000 respondents across four generations (Baby Boomers, Gen X, the Millennials and Gen Z) residing in nine countries, including 2,000 citizens in China, with Gen Z’s accounting for approximately one fifth of the Chinese population and 30 percent of world’s overall total.Chinese Gen Z ratio of household spend compared to globe

The findings of the survey demonstrate that while Gen Z is similar to its Millennial predecessor in certain respects, such as featuring experience-led and socially conscious consumers, the younger cohort has developed some distinct traits which set them apart – fittingly, one example being the desire as individuals to stand-apart. The other defined markers however may strike as an immediate contradiction; Gen Z is the most likely to be influenced by peers, and as a group is the most closely aligned in behavior and perspective at a global level.

The ready explanation to this apparent contradiction is of course social media. As stated by the report, whereas Generation X, the Millennials and Gen Z – the latter soon to account for one third of all consumers worldwide – may all shop online and are all influenced by social media, Gen Z’s list of influence extends further on digital media channels; “Brands’, friends’ and celebrities’ social media and blogs have bigger influences for Gen Z than for older generations.”

“China’s Generation Z are the first Chinese generation to be born in a fully digital age,” said Adam Xu, who was recently made Partner with OC&C. “They are an extremely tech-savvy crowd, willing to share their feelings and experiences in forms of online reviews, blog posts and other means of self-expression. Chinese Gen Z are more likely to make their social media public compared to their Western counterparts who prefer to limit their social media audience to people they know in real life. This suggests that information sharing extends even further beyond their immediate circles for Chinese Generation Z, a trend that presents immense marketing potential if leveraged appropriately.”

One area where this is apparent is in terms of brand discovery channels, with Gen Z’s citing a friend’s influence in 21 percent of recent occasions where they’d been introduced and subsequently purchased an item from a fresh brand, compared to 14 percent of Baby Boomers and Gen X’s and 17 percent of Millennials. The influence of social media and the internet can also be evidently credited for Gen Z’s sharing the greatest cross-border similarities in behaviours and attitudes compared to other generations.Social responsibility priorities for Gen Z As to those shared behaviours and opinions, Gen Z is distinctly socially-minded, or its members at least state a variety of social concerns as having a greater level of priority than their generational peers – building on the Millennial mind-set. Issues such as human rights, diversity, and building local communities all attract concern at far higher levels than the generational average, while for the Gen Z’s of China, environmental-friendly consumption features prominently – at 25 percent compared to the 13 percent global Gen Z average.

While those of Gen Z expect brands to adhere to high ethical standards, and are for example more willing to take extra steps to research a brand’s supply-chain and employment practices before making a purchase, the stated environmental concerns of the newest generation don’t necessarily translate however to broader purchasing activity, with its shoppers favouring passing trends and showing the lowest tendency to preference products that can be used repeatedly. This would suggest opportunities for brands which can meet both the Gen Z need for individual style while leading on social and ethical issues.

And for those same brands, retailers and manufacturer looking to the Gen Z market, it may be worth noting than the Chinese segment of young consumers – most still just teenagers or even younger – account for a massive 13 percent of direct or influenced total household spending in the country – 10 percent of that from their very own pockets – against comparative overall figures of just 3 percent in the US and UK. “These statistics are enough to urge brands to rethink their business strategy if they want to capitalise on China’s booming market,” concludes OC&C Strategy associate partner Veronica Wang.

Excessive technology can be counter-productive in new retail, says S.POINT

05 April 2019 Consultancy.asia

Technological advancements have in recent years opened the door to ‘new retail’ – but an overreliance on technology can be counter-productive for retailers, argues Steven Jiang, Managing Partner of Shanghai-based innovation consultancy S.POINT.

Moving beyond just a buzz-word, the ‘new retail’ business model has outright boomed in recent years, most notably driven by Chinese e-commerce giant Alibaba. Striving for the seamless integration of offline and online shopping channels, together with a mesh of big data, logistics, marketing and distribution, the emergence of new retail has been undoubtedly enabled by rapidly evolving intelligent technologies.

But, as Steven Jiang, Managing Partner and Vice President of Shanghai-based product innovation consultancy S.POINT notes, not all enterprises have the strong technological genes of Alibaba. Jiang contends as such that enterprises in the new retail space can have a tendency to over-rely on technology, with its excessive application and misapprehension of the space producing effects counter to intentions.

“Developers with a misunderstanding of new retail are over-dependent on technology and believe that technology changes and solves everything, which is an extreme obsession with technology,” states Jiang. Rather, new retailers should as a starting point consider scenarios across the shopping and buying life-cycle and the combination of human and technological elements to create a seamless customer experience.Excessive technology can be counter-productive in new retail, says S.Point“New retail should pay particular attention to the sense of balance to connect technology with customers to create a better experience – as the application of excessive technology leaves no room for the development of the relationship with customers,” says Jiang. “The key lies in the insight into customer scenarios, and only by understanding and extending scenarios for their consumers can organisations have the chance of winning new retail opportunities.”

An MBA graduate from the MIT Sloan School of Management and former consumer and industrial goods consultant with Booz & Company, Jiang was a founding member of the China Industrial Design Institute and now serves as Managing Director for S.Point, a 1997-founded Chinese consultancy and Cordence Worldwide member with offerings in consumer research, product definition & design, product delivery, go-to-market strategy, and innovation capacity building among other provisions.

With respect to his contentions on new retail, Jiang points to the modern self-serving vending machines that have emerged in the past few years, which are very advanced in terms of technology but haven’t been entirely successful – separated as they are from consumer scenarios. “Consumers will not approach technology proactively,” he says. “Only when technology is made close to customers’ needs can it find its market.”

Noting that the center of shopping has shifted from the merchandise in traditional retail to customers in new retail, Jiang concludes: “Enterprises hoping to grasp new retail should understand traditional retail from the heart – i.e. consumers see the product first, then recognise the brand, and compare prices in the end. If consumers cannot see the product or understand the product it will be very difficult to push sales . . . the key to new retail lies in creating new and more scenarios to increase the value of the merchandise.”