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Millennials, also known as Generation Y, are defined as currently being aged between 20 and 35 and make up about 20% of the UK’s population. Despite being a generation that appears to have built itself a somewhat negative reputation, sometimes being labelled demanding, digital natives, who have increasingly high expectations, this generation now represents a large proportion of our working population. Therefore retailers and carriers would benefit greatly from gaining a laser focused understanding on what makes this particular generation tick when it comes to online shopping.
Today, global ecommerce is growing at a rate that is challenging for the logistics and retailing industry to match. Online retail sales in the UK topped £133 billion in 2016 and, as the millennial generation continues to demand instant gratification, business success for both retailers and carriers will depend on how efficiently, economically and quickly they can deliver and return parcels, as well as how well they manage their multichannel strategy.
Millennials expect fast delivery
Our 2016 research, found that one in six millennials wanted the fastest delivery and the option for same-day delivery on their purchases. When it came to returns, our ‘Many Happy Returns’ research study which we undertook in September 2015 found that of all the generations surveyed, millennials stood out as being the biggest returners of goods with 50% returning anywhere between 11 and 25% of goods purchased. In addition, shoppers of this age group admitted to only purchasing from a retailer with a free and easy returns policy (42%) which demonstrates the importance of offering free returns to this generation.
Therefore in order to meet the needs of the millennials, not only do retailers need a seamless and fast process that enables parcels to glide out the door, they also need a fast and seamless returns process. With more and more goods being purchased online, retailers will naturally experience a greater rate of returns. This means that the returns process has to mirror the ease of the shipping and parcel delivery process.
Free delivery and delivery options
When it comes to delivery, there’s no question that millennials are asking for a lot. Not only do they want the speediest delivery possible, ideally, they don’t want to pay much, if at all, for that service.
In a survey from fraud prevention firm Trustev, researchers found that 56% of consumers aged between 18-34 expect a same-day shipping option, and 69% of millennials say delivery cost is even more important than timing.
In order to meet this expectation, retailers must take full advantage of the huge range of delivery options available to them, including alternative delivery options such as supermarket, Click & Collect, Post Office, delivery lockers and even potentially drone delivery.
Going back to our own research, well over half of 16-24 year olds (54%) selected the Post Office as their first delivery choice, and 27% of this age group selected Click&Collect and their preferred delivery method. The concepts of drone delivery and delivery to the boot of the car were also very appealing to millennials.
With their busy lifestyles, millennial’s parcel deliveries need to be able to fit around this, so with such a variety of options on offer, retailers can make this a reality.
Studies show that approximately two thirds of the UK adult population have a smartphone which, when equipped with superfast 4G, is significantly altering the way we shop. The ‘always on’ digital native nature of millennials naturally highlights mobile commerce as the preferred way for this generation to shop. Customers can order what they want, whenever they want.
Increasingly, more ecommerce companies are giving more priority to mobile traffic in their decisions and with technologies such as Apple Pay being offered across devices, and features such as fingerprint recognition making transactions effortless, there is no sign of mobile commerce slowing down.
The top retailers are the ones who are building intuitive and useful shopping apps that give consumers a seamless way to shop on mobile devices. In fact retailers with a sophisticated mobile app presence saw up to 54% of their mobile transactions generated in-app in Q2 2016, an increase from 47% in 2015. In order to remain a strong competitor in this fast developing industry, retailers must have a seamless multichannel strategy that meets the high standards that are being set.
The bottom line is that millennials want to be able to order all kinds of goods, whether it be food, clothes, books or other services, and have these orders almost immediately available to them. Increasingly, next-day and free delivery is being seen as a necessity that every millennial expects. In order to survive logistics companies and retailers must acknowledge this and quickly develop strategies to meet these demands, otherwise they may find that the millennials switch to another online provider.
[Source: Matthew Robertson, co-CEO, NetDespatch]