GUEST COMMENT How brands can attract Gen Z consumers with last mile innovation

Sustainability is now higher on the agenda for many brands when it comes to parcel delivery, yet most are still missing opportunities to build Gen Z loyalty at key touch points in their supply chain, writes Alex Gallagher, chief strategy officer of UNiDAYS.

UNiDAYS’ recent sustainability report revealed that taking an innovative approach to last mile delivery presents brands with their latest chance to win the trust of a generation that now represents over 40% of global spending power.

For years Gen Z have wanted brands to demonstrate their commitment to the environment in their business practices; and now over 80% would consider paying more for products that meet their last-mile sustainability expectations.

In the era of next-day delivery and to-the-minute delivery tracking, a third of students are even happy to compromise convenience if it means brands’ delivery service becomes more sustainable.

Taking ownership
Gen Z are speaking loud and clear – they want to shop at brands that provide sustainable delivery. Yet with Deloitte’s 2022 CxO sustainability report revealing that only 15% of Gen Z believe businesses are strongly committed to taking climate action, it’s clear that there is scepticism from younger consumers towards brands’ sustainability efforts. 

So how can brands earn their trust?

The first step is to take ownership of the issue. This means understanding what Gen Z are asking and assessing their current last-mile delivery solutions against their desires. For example, UNiDAYS’ report found that two in five young people would collect parcels rather than have them delivered directly to their homes to reduce the environmental impact of their purchase.

Knowing this, brands have the opportunity to take the lead and provide Gen Z shoppers with alternative delivery solutions that demonstrate their commitment to sustainability and to delivering to the values of this apex consumer group.

Not only does it make sense reputationally but allowing shoppers to collect from distribution points rather than providing last-mile delivery also presents an opportunity for brands to save money. Last-mile delivery tends to cost over 50% of the total cost of delivery for brands.

Transparent delivery options
Once brands have addressed and improved their offer, they must focus on clearly communicating this offering to Gen Z consumers. 60% of Gen Z say they value transparency from brands, compared to 35% of UK adults in general.

While Gen Z is demonstrating a desire to improve the sustainability of their last mile decisions, 67% are unsure about what options are being provided by brands.

In fact, our research found no brands which successfully delivered messaging about their sustainable delivery options, meaning that there is a major opportunity for first movers to build brand reputation with Gen Z in this space.

For example, nearly half of students would be more likely to purchase a product if it was delivered by a cargo bike, but with brands failing to publicise how a delivery will be made, Gen Z investment is being lost.

The responsibility is with brands to change this. By improving transparency around delivery services and allowing Gen Z to make informed delivery choices, first movers have a significant opportunity to build trust and favour with the next generation of shoppers.

No price on upholding values
Previously brands may have restrained from offering more sustainable but higher cost delivery solutions through fear that increased cost would deter consumers.

However, this values-led generation is willing to pay the price for brands to meet their higher sustainability standards. Our survey shows that the majority of young buyers would consider paying a sustainability premium; a significant increase from the third of the overall UK population which would choose to do so.

Even in an economic downturn, and with the festive holiday hangover impacting our disposable income, half of Gen Z plan to buy eco-friendly products, and would pay 20-30% more for items. Further to this 65% are planning to purchase more eco-friendly products in the next 12 months.

Finding that sweet spot between sustainability and price is key. Brands that reasonably increase prices to support environmentally positive delivery decisions, are now facing a generation of consumers willing to reward this investment in their values.

Following the data
It’s not surprising that traditionally brands have feared the premium that can often come with making sustainable choices, as for the economically savvy young consumer, a pricier option seemingly may be off-putting.

Yet, Gen Z is now telling UNiDAYS that brands can be confident in charging more where needed, as the majority of this generation is willing to accept the cost of brands meeting their environmental expectations.

In fact, they are actively seeking brands that are climate conscious and plan to buy eco-friendly products. Brands are being presented with a low-competition, high-value space for Gen Z; the brands that are ready to move quickly to provide and effectively communicate sustainable last-mile delivery solutions will set themselves apart earning the trust and respect of this apex consumer group.

Alex Gallagher, chief strategy officer of UNiDAYS