How to Capitalize on Gen Z & Millennial Spending Habits
This year, the youngest Millennials will turn 26, while the oldest Gen Zers will turn 25. With members of the two largest living generations at peak spending ages, they simply cannot be ignored by retailers. So, what do today’s retailers need to know about these two unique generations? What are their spending habits? And how can you align your brand to meet their needs and capitalize on their immense buying power?
Millennials vs Gen Z
Everyone seems to understand who Baby Boomers (1946-1964) and Generation X (1965-1979) are. However, there’s often some confusion about who exactly Millennials and Generation Z consumers are (often, they get lumped together). So let’s set the record straight once and for all!
Who Are Millennials?
Millennials (sometimes known as Generation Y, adding to the confusion) were born between 1980-1995. This generation is often thought of as younger than they are due to the term “millennial” being associated with the year 2000. However, Millennial doesn’t mean the generation was born at the turn of the century, rather the majority were coming of age at the turn of the century. It often surprises people to learn the oldest Millennials are now 41 years old with mortgages and kids of their own!
Numbering more than 72 million in the United States, Millennials are the largest living generation and spend approximately $600 billion in the U.S. each year. Due to their sheer size and spending power, this generation has – and continues to – cause many changes in the labor market and business landscape. However, a lot of the attention Millennials once enjoyed is now being refocused on Gen Z...
Who Is Generation Z?
Generation Z (lately referred to as Zoomers) is the newest generation of shoppers, born between 1996-2014. Their annual spending is $140 billion – significantly less than Millennials – but it’s important to remember that the youngest of this generation are still in grade school. Generation Z buying power will only grow in the coming years, and with a population of 67 million, it will be significant, making them a prime target for advertisers.
There are challenges for some retailers with this generation, however. Unlike Millennials, the majority of whom can remember a pre-digital age, Gen Z was born into a completely digital world, making them a challenge for retailers who might not be on the cutting edge of technology or who haven’t adopted an “instant gratitude” mentality. They’re also the most diverse generation in the United States, which is also a challenge for retailers not used to catering to various ethnic groups.
Millennial Spending Habits vs Generation Z Spending Habits
Now that we’re on the same page regarding who these two generations are, how exactly do they spend their money? And what do they expect from retailers? It’d be easier for retailers if the two generations were similar, but their spending habits differ in numerous ways:
- 79% of Millennials cite sustainability as important to them when making a purchase compared to 75% of Gen Z.
- 75% of Millennials are willing to pay more for great customer experiences compared to 69% of Gen Z.
- 73% of Millennials will not switch to lower-priced alternative brands compared to 62% of Gen Z.
These statistics show that while Millennials are more focused on eco-friendliness and customer experiences, Gen Z is more price-conscious when making buying decisions. Of course, many members of Generation Z are still finding their way, and as they begin earning more money their priorities could certainly change.
In the meantime, ecommerce sellers can comfort themselves with the fact that both Millennials and Gen Z plan to do more online shopping than ever before. Of course, with online shopping comes order fulfillment, and there are ways to stand out in that regard that will appeal to both generations.
Build Loyalty Amongst Millennial Shoppers & Gen Z Shoppers Through Fulfillment
Millennials and Gen Z are digital shoppers, which means online order fulfillment will be a necessity. Your order fulfillment process is a great way to boost brand loyalty amongst both generations. Here’s how it works.
1. Be Authentic & Transparent
When deciding between brands to purchase from, Millennial consumers seek emotional connections. A recent study found that 48% of Millennials are more likely to buy from a brand if they know the people behind it. The same study found Millennials were drawn to brands that fulfill a “Trust Loop.” This means brands that are humanized and focus on transparency, experience, and community rather than their products or services alone.
Gen Z also looks for authenticity—not on marketing hype. They’ve grown up during a time when “fake news” has become a well-known phrase, so they’re not easily fooled. To build a successful relationship with Gen Z, brands need to gain their trust by being transparent and allowing them to feel in control. In a recent study, 60% of Gen Zers said it is important for brands to value their opinions and that transparency is key. They expect brands to be ready to interact with them digitally 24/7 on their choices of channels and devices.
The bottom line behind all this? Millennial and Gen Z shoppers expect the brands they shop from to not only have great products and services, but to take it a step further and actually build relationships with them, listen to their feedback, and engage with them.
So how can you meet these expectations through your order fulfillment process? Be transparent by clearly posting your shipping policies on your website, then providing full visibility into your fulfillment process by notifying your Millennial and Gen Z shoppers when their order has been received, fulfilled, and sent. If an order is going to be late, don’t just hope they won’t notice—reach out to them with an explanation, what you’re doing to fix the problem, and an updated ETA.
And, always ask for feedback by sending follow-up surveys after they’ve received their order and actually work to implement positive changes. Seeing as 67% of Millennials believe they have a responsibility to share feedback with a brand about their customer experience, and 60% of Gen Zers said it is important for brands to value their opinions, it shouldn’t be too hard to get it!
2. Get Personal
Another key way to boost engagement and build that brand loyalty with Millennial and Gen Z shoppers is to get personal. Both generations crave deeper connections with the brands they buy from, which means they want to feel like a valued individual—not just a number. How can you make each and every Millennial and Gen Z shopper feel unique when you have so many orders to fulfill?
Ecommerce retailers need to leverage technology to create personalized, tailored experiences. While Gen Z is the true digital native, both generations grew up in a hyper-connected world. As a result, they’re willing to share more information about themselves online, which presents a huge opportunity for retailers. By capitalizing on insights from consumer data, retailers have the ability to craft their fulfillment process to align with their Millennial and Gen Z customers’ needs and preferences. The Fulfillment Lab created fulfillment marketing to make this process easier than ever before!
Fulfillment marketing combines fast shipping, transparency, and customization—without sacrificing scalability. It leverages insights collected through marketing data you’re already collecting to deliver a personalized experience (even at mass volume!) that will keep your Millennial and Gen Z shoppers happy.
Our fulfillment team will meet with your internal marketing team to gain a deeper understanding of your business and the needs of your customers. Then, we can create unique fulfillment experiences for your various target market segments, and leverage the analytics within our Global Fulfillment Software™ to quickly pinpoint which fulfillment experience your Millennial and Zoomer shoppers like best. This enables you to create customized packaging to match, such as custom shipping boxes, labels, inserts, and more! The result? A more engaging customer experience that will keep these generations satisfied and more brand loyal. After all, which generations do you think are most responsible for the YouTube unboxing video craze? (Read more about how a positive packaging experience can lead to viral videos here).
3. Deliver on Shipping Expectations
For Millennials and Zoomers, Amazon Prime-speed shipping is not only the norm but the expectation. Both sets of consumers are up to three times as likely to pay for expedited shipping as older shoppers (40% of Gen Z and 32% of Millennials). So, for ecommerce retailers to attract Millennial and Gen Z shoppers, and compete with giants like Amazon, the proper fulfillment logistics need to be in place to deliver on these shipping expectations.
If your fulfillment process is slow, messy, and disorganized, it will result in drawn-out delivery timelines with no visibility. This will create a poor customer experience that will turn these consumers off. On the other hand, a streamlined and efficient fulfillment process with end-to-end visibility will expedite your shipping speeds and satisfy Millennial and Gen Z shoppers, who are then more likely to share their good experiences with others online.
That’s why at The Fulfillment Lab, we offer dependable, efficient shipping with global order fulfillment capabilities. We even offer expedited shipping options that guarantee delivery in 3 business days or less. We also have 14 fulfillment warehouses (2 domestic and 12 international), which means your products will always be on the fastest possible route to your customers. Utilizing multiple warehouses cuts down not only on shipping time but also reduces the number of zones that each shipment must cross. This makes it possible to pass along lower shipping costs to your Millennial shoppers and Gen Z shoppers.
Capture Millennial & Gen Z Business with The Fulfillment Lab
Millennial buying habits are different from Gen Z buying habits, and their spending is likely to become more similar in time. Right now, there are a number of things to capitalize on that meet the needs of both generations. And, in an increasingly competitive, fast-paced online market, it’s absolutely necessary! Order fulfillment is how to make it happen.
Today, order fulfillment needs to move just as quickly as eCommerce businesses themselves—especially if you want to satisfy digitally-driven, hyper-connected Millennial and Gen Z shoppers. Working with the right fulfillment provider can make this happen for your brand. The Fulfillment Lab offers the comprehensive, cutting-edge fulfillment services you need to develop a competitive advantage! Looking for an end-to-end fulfillment partner to help you capitalize on trends affecting Millennial and Gen Z shoppers? Contact us today!