Product, Service & Design Innovation
How eCommerce Retailers Can Satisfy Today’s Sustainability-Demanding Shoppers

As consumer demand continues to grow for sustainable products and packaging, the most successful brands in the next era of eCommerce will be those that make sustainability a priority and create a shopping experience for customers that reflect their values. What makes Generation Z tick? We surveyed 4,000 consumers in the US and the UK on the topic of sustainability and our findings offer insight into how younger consumers are approaching conscious commerce.

Think outside the recyclable box

In the 1970s and ‘80s, the three Rs — reduce, reuse, recycle — were touted as a way that consumers could do their part to help the environment. Today’s younger shoppers, however, are raising the bar on what it means to be sustainable.

When asked how they would describe sustainability, Gen Z consumers were more likely to say ‘sustainable’ means being socially responsible, locally produced, labelled or certified as responsibly sourced, carbon neutral, and supporting biodiversity. In comparison, for older age groups, the understanding of sustainability was more focused on recycled, repurposed, durable and reused items and materials.

Younger generations are more concerned with the larger supply chain implications of their purchases and appear to have a broader understanding of the ways in which retailers can reduce their environmental impact across the supply chain, not just how they package or deliver their products. In fact, 65 percent of Gen Zers and 66 percent of millennials put a premium on high-quality goods that will last a long time and can be repurposed or upcycled.

And with 54 percent of Gen Zers describing sustainability as being socially responsible, these initiatives should not exist in a vacuum. Retailers and brands need to adopt a holistic approach to being sustainable — taking into account how they can reduce their carbon footprint at every step of the product journey.

It’s their future

The generation that brought us Greta Thunberg is driving a more socially conscious narrative. Climate change is top of mind for Gen Z consumers, who are more likely to express anxiety about the future. These digital natives are mobile, well versed on topics and understand the importance of mass communications. They came of age during the COVID-19 pandemic — a global crisis has a way of shaping lifetime spending habits.

According to our research, 71 percent of Gen Z consumers expect sustainable packaging from retailers — compared to 52 percent of baby boomers and 66 percent of millennials.

With younger shoppers investing in brands that walk their talk on sustainability, retailers need to find smart solutions to appeal to this growing focus. From manufacturers to the third-party logistics (3PL) providers fulfilling online orders, brands should find partners who strive for a more sustainable future.

A retail catch-22

Consumers want brands that support their values but without increasing costs. Among Gen Z shoppers, 33 percent believe that charging a higher cost for more sustainable shipping and delivery options is not justified. The concern is slightly less for millennials and baby boomers.

Most shoppers say they’re willing to wait an extra day or two for their delivery if they know the delivery has a significantly smaller carbon footprint; but shoppers also want what they want when they want it. As a result, 73 percent of millennials will choose faster delivery if they don’t have to pay extra, with no concern for sustainability. The figure is only slightly less for Gen Z shoppers at 67 percent. Baby Boomers will go for speed, too (61 percent).

Another Gen Z trend is “bracketing” — buying the same item online in multiple sizes or colors and then returning what they don’t want — which creates not only a logistical nightmare for retailers but compounds shipping emissions and product waste during the return process. According to our research, this practice is highest among Gen Z shoppers (35 percent) compared to other generations (ex: only 8 percent of baby boomers).

Efficiency rules

One way to offer fast delivery more sustainably is by getting products closer to customers. To pull off multi-node operations successfully, you need advanced order-routing capabilities. A distributed order management (DOM) system enables retailers to route orders across many fulfillment points if needed. This way, you can factor in delivery preferences including shipping time and costs, along with better inventory management at stores — and of course, more sustainable delivery methods.

Leveraging the growing regional carrier market allows brands to make good on faster delivery times at a lower cost, with more accountability than national carriers. Partnering with these local operators wherever their distribution centers are located enables faster, more cost-effective and efficient ground delivery. When combined with a multi-node fulfillment approach, retailers can maintain quick turnaround across regions, as opposed to a traditional fulfillment-hub model.

And when items do need to be returned, shoppers want convenience. More than 60 percent of Gen Z consumers prefer to have multiple options to return a product — such as returning to a store, using a drop-off location, shipping it back, etc. Millennials (59 percent) and baby boomers (50 percent) want multiple options, too.

Speaking Gen Z’s ‘sustainability’ language

QR codes are a great way to pass on information about sustainability initiatives. Along with printing “Recycle me” on packaging, retailers and brands should consider linking to a page detailing their sustainability initiatives via a QR code on the box. Brands can also leverage QR codes to streamline more efficient returns.

Customers should also be able to opt-in to more sustainable packing methods during checkout. For example, a luxury brand could offer shoppers the option to choose minimal packaging instead of the premium experience with ribbons, non-recyclable boxes, tissue paper, etc. Expanding consumer understanding of sustainability beyond recycling can help customers appreciate the efforts brands are making to reduce their impact on the environment.

Gen Z’s influence will only grow as more of this generation enters the workforce. Retailers and brands should work with partners who share their values and goals when it comes to sustainability. Brands and retailers that continue to reduce their environmental impact and clearly communicate their sustainability efforts will gain a competitive advantage.