Generation Z will transform parcel delivery processes — so businesses must adapt

The shopping habits and expectations of generation Z and millennials is set to shake up logistics and parcel delivery for smart companies. Not only are customers’ parcel delivery expectations rising across the board anyway, but studies on generation Z and millennials shows the delivery or shipping component of the purchase is increasingly a differentiator.

This will have major implications on B2C industries including retail, and B2B will not be immune.

Why should these younger generations change how your business needs to think about parcel delivery?

By 2020, generation Z and millennials are expected to make up 59% of the global workforce, and by 2020, generation Z will make up 40% of the world’s consumers. It’s a big opportunity for companies which can win them over.

Much about the generation Z and millennial cohort can surprise. For example, in relation to product delivery, KPMG says customer experience will overtake price and product as key brand differentiators.

IBM Consulting found 58% of generation Z and millennials say it’s important retailers provide the right pick-up or delivery options. Generation Z and millennials want deliveries to work for them, not the other way around — the challenge for business is to meet their demands for greater flexibility, including deliveries on weekends, the next day, and after hours.

While these options may involve greater cost, research shows generation Z and millennials are prepared to pay more for delivery options including greater convenience.

Importantly, it’s not just about speed — communication and engagement are key. Research from global e-commerce supply chain group Neopost Shipping reveals 78% of generation Z and millennials expect retailers to email them throughout the shipping process.

They expect more engagement, such as delivery date estimates at the checkout, Uber-style deliveries, online mobile tracking and texts and emails as updates.

Such engagement has been available and accessible for some years via telematics tracking systems that are now more affordable. These systems can provide instant updates to customers, making them happy and saving you time in chasing up orders — not only can they see where their delivery is, you can too. Yet, many delivery fleets are dragging their heels on this technology.

It’s a mistake to think these standards will only apply to B2C enterprises. These issues will become a greater part of B2B commerce as the trend takes hold more broadly. As more generation Z and millennials enter the workforce, they will take management positions in the supply chain, and become business owners and buyers of services, bringing higher expectations and more tech-savvy approaches with them.

We have already seen rising expectations in the B2B area following developments such as next-day delivery in the B2C space. More B2B customers are demanding better service, better reliability and better communications, even while many businesses have been slow to adopt more transparent approaches such as real-time delivery tracking.

Not all businesses will be able to keep up with these demands. So how can you ensure your business thrives?

Here are five key considerations.

1. Understand your delivery transport efficiency

Companies with delivery demands beyond Australia Post will often juggle a delivery transport mix which may include owned resources, outsourced services and ad-hoc delivery options such as couriers. But there are many hidden costs in parcel delivery — things like maintenance, breakdowns and underutilised vehicles. Ensure you bring these costs out into the open for a genuine picture of your efficiency.

2. Consider your ability to meet demand

How do you cope when the orders come flooding in? Fleets will need to be more adaptable to shifts in demand, but this has the potential for cost blow-outs. You will need suppliers who can respond and grow with you when you need it. Avoid relying too much on couriers as it’s often a more expensive and less reliable option.

3. Consider service over price

Let me paint a picture: you use a cheaper delivery option, and when the package is delivered, the client finds broken pieces. How much has this really cost you? This is a common scenario. The fact is, cheap couriers are not set up to carry unusual or delicate items. Remember, generation Z and millennials will value service and reliability over price.

4. Consider yourself accountable

Your parcel delivery may lead to negative user experience reviews, which can damage your reputation. Technology will only introduce greater transparency — and more rankings. Expect user reviews to permeate other areas of commerce including B2B.

5. Communicate with your customers at all times

Generation Z and millennials have grown up with instant gratification. They expect to know what’s going on. It’s a good time to review your ability to provide services such as vehicle and delivery tracking, which are fast becoming a standard expectation among customers.

Any business relying on deliveries has a choice: either lift standards and make delivery a positive differentiator for their business and brand, or do nothing and risk having ineffectual parcel delivery become a ‘deal-breaker’ which potentially drives customers elsewhere.

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