The Generation Z Evolution and Why 3PL’s Should Be Ready

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The global consumer market is about to change with the emergence of Generation Z. Numbering roughly 2.5 billion, Gen Z will become the single-largest generational group on Earth in 2019, establishing one-third of the planet’s population and online sales. In case you haven’t kept up, Generation Z is the demographic follower after the Millennials, who changed industrial buying behavior.

online shopping

 

The world of 3PL (Third-Party Logistics) warehousing is quickly evolving; while what was required for 3PL customers last year may not be what this Gen needs this year and beyond.

3PL’s need to continuously evolve their businesses with cloud-based WMS (Warehouse Management System) solutions so they can serve their customers better, operate more efficiently and grow faster.

Is your 3PL ready to face Generation Z?

In 2019, “Generation Z,” this massive wave of shoppers has already started crashing on 3PL warehouse customer’s shores, along with their uncommon expectations.

Successful 3PLs understand that this is a wave 3PLs can ride to incredible profitability if they learn how to efficiently manage warehouse Ecommerce and Omni-channel operations. Omni-channel integrates the different methods of shopping available to consumers (e.g., online, in a physical store, or by phone).

With a number of roughly 2.5 billion, Gen Z will become the single-largest generational group on Earth in 2019 constituting one-third of the planet’s population. They already have a purchasing power of $100 billion in the U.S. alone compared to the Millennial purchasing power estimated only at around $65 billion. They now have unparalleled expectations when it comes to convenience, control, cost, and choice

On the horizon…The iGeneration—they are going to change everything at an alarming rate. This generation grew up with a smart phone in hand. They are the totally empowered consumer.

By 2020, Gen Z will command nearly 40% of all consumer shopping. 3PL warehouses that can successfully help their customers serve the needs of this generation will be able to grow their businesses more quickly.

To do so, a 3PL must have the following capabilities.

  1. Omni-channel fulfillment capabilities

Gen Z shoppers will buy from their smartphones more than any generation in history. For this new shopper, there is no distinction in how and where they shop but there is an expectation of a seamless experience. With experts claiming that Omni-channel is the future of Commerce, 3PLs should be ready to react responsively.

  1. Responsive Ecommerce sites

3PL warehouses should work with their customers to ensure that their mobile sites are lightning-fast and simple to navigate. Interesting to note: If a mobile site takes more than 3 seconds to load, 53% of Gen Z-ers will move on. Today’s successful warehouses need to partner with Warehouse Management System (WMS) providers who offer a platform with shopping cart and API integrations, in addition to other value-added services that help them better serve the customer.

  1. Total visibility and control over product availability, fulfillment and delivery

Today’s 3PLs need to maintain total visibility into the buying process - from the moment the customer checks a product’s availability – to the moment it is shipped. For many 3PLs, this starts with offering inventory reports, automatic email notifications and a permission-based web portal for customers. The ability to track purchases from the racks in the warehouse to the trucks and all the way to delivery will offer a competitive advantage in riding the wave of profitability.

  1. A Superior Customer Experience at Every Touchpoint

Gen Z consumers expect to be treated like royalty. 3PLs should work with their customers to provide incredible levels of customer service, attentiveness and assistance. This might include:

  • Chatbots (A pop-up window which conducts an online conversation through the website)
  • 24/7 access to live, qualified reps
  • Crystal-clear FAQs
  • Easy-to-find help if there are problems

Making sure your warehouse has the ability to service your customers wherever, when ever and however, will keep them coming back for more as they grow and scale along with you.

  1. Seamless Product Returns

Returned items have always been an issue for Ecommerce retailers. But it’s about to become even more challenging. While it is estimated that only 4% of Gen Z is expected to return more than 75% of their purchased items, this amounts to 3X higher than other buying generations.

Returns should be an expected part of your fulfillment system. An efficient system should not only handle returns easily but win life-long customers in the process. You can do this by providing:

  • Pre-printed, easy-to-follow labels & instructions on every package
  • Additional custom pick-up and exchange opportunities
  • A hassle-free WMS to automatically update inventory
  • Superior service and support

As one generation retires, a new one will step up to take their place. These shifts in power among the generations are steadily disrupting patterns of industrial buying in a variety of ways. The 2019 Industrial Buying Dynamics study found that medium and large distributors appear out of step with the evolving requirements of this new generation of purchasers. Interestingly, smaller distributors seem to be one step ahead by offering higher levels of customer service to their prospective and repeat customers. 

Spartan Logistics partners with manufactures across the Midwest for all their warehouse and distribution needs. To discuss your 3PL needs, contact:

Craig Recker

Spartan Logistics Director of Business Development

craig@spartanwarehouse.com

Mobile: (614) 497-1777

 

 

 

 

 

 

Topics: 3PLs in Toledo Ohio, Rise of 3PL Fulfillment Services, Supply Chain Strategy, Regional Distribution Center