Gen Z’s sustainable shopping demands and how to meet them

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Gen Z’s sustainable shopping demands and how to meet them

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    The pressure is real. Governments, stakeholders and consumers are demanding retailers go green and begin to prioritise people, society and the environment over profit. 

    KPMG’s Retail Think Tank (RTT) considers the ESG (environmental, social and governance) agenda a top three boardroom topic for all retailers. They say that while brands “accept they need to take action now to define their purpose and enhance their reputation ...[they] don’t necessarily know where and how to start.”

    Always keen to help a retailer out, we’ve reviewed our most recent stats to shed light on student expectations and shopping habits when it comes to sustainability.  

    Make no mistake, we’re not suggesting Gen Z’s whims should be the foundation of your ESG strategy. The values of your brand, the opinions of corporate stakeholders and government legislation should be your guide (RTT’s whitepaper offers excellent guidance on this).

    Rather, we’re sharing research that indicates how retailers can position brand elements such as pricing, purchasing options and supply chain solutions to gain traction with this demographic and go green for the greater good.

    Why Gen Z

    Arriving into the world between the mid 1990s until the 2010s, Generation Z have never known a world without the internet.

    Right now, they’re 18-25 and going through life’s first significant changes: leaving home, going to university, starting a full-time job. 

    Big life events such as these disrupt buying habits, making Gen Z a prime target for brands looking to influence, secure and retain student shoppers for a lifetime of loyalty. 

    Is Gen Z serious about sustainability? 

    When it comes to Gen Z, our research finds that environmental credentials polarise students, putting them either at the very top or the very bottom of purchasing priorities. However, this may be a trend that’s soon to change. 

    Our 2022 sustainability report noted that:

    • 55% of students are buying more eco-friendly products than a year ago
    • 65% are planning to purchase more of them in 12 months' time
    • 36% will usually or often buy products made from recycled materials

    Is it all talk and no action? Known as the say-do gap, it is a possibility students (like all consumers) don’t follow through on their intentions. RTT acknowledges this as well. You can read our article on the say-do gap to find out more about this.

    Statistics aside, one thing can’t be denied about Gen Z: they love social media and aren’t afraid to use it. Making this consumer demographic one very vocal stakeholder you can’t afford to ignore.

    How to build a sustainable brand that appeals to Gen Z

    Affordability is key

    While eco credentials go in and out of favour, price consistently comes out on top. Our surveys receive comments such as, “price is key - if I had the money I would shop in places that had good labour policies. I would make better choices if my bank balance allowed.” 

    And our 2022 holiday report found that just one in four (23% of UK, 29% of ANZ and 24% of US students) are willing to pay more for sustainable gifts this Christmas. 

    The stats are up in other areas however: 80% of students would at least consider paying more for clothing from brands that met their sustainability expectations. 1 in 4 students (23%) would pay 10% more for eco-friendly products. Over half would pay 20% to 30% more. 

    It’s clear that Gen Z aspire to be sustainable shoppers. Enable them to do their best with a pricing strategy that offers discounts or by developing a line of products that are genuinely affordable and sustainable. Be a brand that’s transparent: break down costs to educate student shoppers on the impact and ethics behind their choices and help nurture more conscious consumers.

    They want a path of least resistance 

    In that same holiday report we also suggest Gen Z “is looking to retailers to take responsibility for products being environmentally and socially sound”. And our 2022 Fashion Report revealed: 

    • 47% of Gen Z believe brands should be responsible for regulating the beauty industry
    • 68% want clothes manufactured to the highest standards
    • 67% prefer brands that appeal to their social conscience

    In other words, student shoppers are waiting for you to bring sustainability to them. Make it easy for them to be the ethical, do-good shoppers they want to be by prioritising your most ethical products and services, being a brand that offers green delivery options (more on this below) and providing ways to recycle or upcycle products. 

    There’s opportunity at the last mile

    Gen Z is largely unaware of sustainable options when it comes to the last mile of the supply chain. As our sustainability report documented, 67% of students feel they don’t know enough about delivery services to assess which are doing a good job regarding eco-delivery. But they’re very open to eco supply chain solutions. 

    • 48% of students would be more likely to purchase a product if it was delivered by cargo bike. Just 4% would be less likely to purchase. 
    • 1 in 3 students think clothing brands should stop providing next day delivery if it improves their sustainable business practices. 
    • 39% think next day deliveries should be stopped if the order is below a certain value. 
    • 2 in 5 18-24-year-olds prefer to collect parcels rather than have them delivered directly to their homes.

    Given that just “4% of retailers offer carbon neutral delivery... 6% offer less packaging as an option at checkout…0% include sustainability messaging in their delivery communication” there’s a huge opportunity for brands to offer stand-out delivery solutions and educate through packaging and confirmation communications. Revolutionising this notoriously inefficient part of the supply chain could deliver benefits to multiple parts of your organisation. 

    Gen Z is an aspirational audience

    Like all 18-25 year olds throughout time, this is a generation with high hopes and high expectations. They want retailers to be sustainable so they can be sustainable - without compromise.

    As you build your ESG strategy and adjust key brand elements remember: price hikes will alienate them, messaging will educate them, choices will empower them. This vocal generation is ready for your sustainability strategy. And, once they can afford it, will be passionate advocates for the good you do.

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