To grow a business in retail, store owners need to tap into the groups with the greatest spending power. One important subsection is Gen Z and retailers need to understand the return habits and preferences of the Gen-Z shopper.
To understand more Digital Journal caught up with Tasha Reasor, SVP Marketing at Loop.
Digital Journal: What types of return features and policies do Gen-Z shoppers look for prior to making purchases?
Tasha Reasor: Our data shows that 97 percent of Gen-Z shoppers regularly review retailers’ return policies before making online purchases, so the features and policies retailers employ are critical to retaining this demographic long-term. When they’re reviewing, they’re looking for two main things: flexibility and sustainability.
Gen-Z shoppers are leading the charge when it comes to flexible, convenient return options. They are interested in features like at-home pickup, package-less return drop-offs, or QR-code-initiated returns that enhance consumer convenience – and they’re willing to pay for it. With more and more brands offering fast, flexible returns, Gen-Z is coming to expect these conveniences when they shop.
The second thing Gen-Z considers when making purchases is the environmental impact of the purchase and the sustainable practices of the brand. Compared to older generations, Gen-Z is more likely to consider retailers’ company values, employment practices and social causes when making purchases. In fact, 91% of Gen-Z consumers agree they are more likely to shop with brands that offer eco-friendly return options, like package-less or carbon-neutral returns.
DJ: How much of an impact on GenZers might the shift to pay-your-own return policies pose retailers?
Reasor: There are a number of larger challenges facing the industry, like waning demand, disrupted supply chain, excess inventory, and associated discounting and margin pressures, which put additional pressure on the post-purchase experience. Retailers looking to returns as an area to recoup costs and find pathways to profitability are doing away with free and limitless returns.
According to our data, consumers, especially Gen-Z, are not as apprehensive about paying a fee to return their goods as you may think. In fact, we found that 70% of Gen-Z shoppers are willing to pay a small fee for a more convenient, premium return experience. In particular, they are interested in options like at-home pick-up, which 69% indicated using in the last year, and boxless drop-off, which 51% have used.
Where brands lose consumers is in charging for returns with no compelling benefit for the charge – like more flexible return options. When the customer experience suffers, shoppers may begin to distrust a brand and take their business elsewhere.
DJ: How significant are Gen-Z attitudes changing regarding sustainability?
Reasor: Shoppers in general are increasingly choosing who they purchase from and who they’re loyal to through a sustainability lens. In fact, according to our research, 73 percent of shoppers review a retailer’s return policy to gauge their sustainability levels before making a purchase, and 88 percent agree that eco-friendly return options make them more likely to shop again.
But, among younger shoppers, the desire for a more sustainable return experience is the strongest. Our data indicates that Gen-Z shoppers are more likely to look at a retailer’s return policy to determine how sustainable their business is (41 percent), shop with retailers that offer eco-friendly or sustainable return options (91 percent) and buy from retailers that clearly communicate sustainability measures in their return process (83 percent). Additionally, just a mere 6% of Gen-Z shoppers never think about environmental impact when making a return and more than half (51 percent) have declined to return a product due to environmental implications.
DJ: How can retailers/merchants better meet this generation’s expectations?
Reasor: Now more than ever, customers are looking for a relationship with brands after making a purchase; Gen-Z is leading this charge. For starters, retailers must provide eco-friendly return options and make it easier for shoppers to reduce their carbon footprint. To accomplish this, they can offer return options that send unwanted items to donation centers, enable keep item features, and offer more sustainable returns processes like boxless/labelless returns. Returns are inevitable and it’s a retailer’s job to find unique ways to reduce their and their customers’ environmental impact.
Retailers must also offer flexible return offerings and windows as Gen-Z consumers are more likely to take three days to one week to initiate the return process, whereas older generations are more likely to take 1-2 days.
In the end, brands must meet this generation where they are and cultivate a return experience that’s as personalized to the individual shopper as possible. For instance, if a particular Gen-Z customer has indicated that they prefer to drop off their items with a shipping partner, this should be the first option presented to them, and it must be done proactively. Consumers shouldn’t need to navigate through the same processes and selections over and over again. Retailers must take note of specific preferences, and craft a consumer’s post-purchase experience to fit their own unique expectations.
DJ: Any other observations/comments on the role of Gen-Z consumers regarding how retailers and marketers address this consumer segment?
Reasor: Brands must speak to the values of Gen-Z shoppers. This generation is fired up about social causes, and are willing to put their money where their values are. Brands that are aligned with their values, particularly around sustainability, are poised to build better customer relationships with this younger generation and earn their continued trust and business. Ultimately, reverse logistics is no longer a one-size-fits-all proposition for retailers. In general, returns policies are used to build customer-brand relationships, but what resonates with one customer does not necessarily resonate with another. Furthermore, customers now expect brands to build relationships with them after a purchase; retailers must develop reverse logistics strategies that cater to the expectations and preferences of shoppers across all generations in order to win shoppers for life.
