How can retailers and supply chains serve the millennial shopper

by Nov 18, 2015Experts, Omnichannel, Retailers

Millennial shoppers have high expectations. They want things quickly and readily available. It’s not surprising as they’ve grown up in a world where, thanks to high-speed broadband and mobile, they can access information on nearly everything whenever and wherever they wish.

These expectations have spilled over to their shopping experiences. This means retailers need to take heed as the largest U.S. demographic — roughly between the ages of 17 and 28 — has reached, or almost reached, the age when they are no longer dependents and make most of their own buying decisions. Forbes named 2015 as the year of the millennial shopper, and retailers are moving quickly to engage this market segment of 80 million consumers.

Here are a few policies we’ve seen retailers deploy to cater to millennials:

  • Inventory availability. Retailers need to provide accurate product availability for all online shopping experiences. They have to tell the millennial shopper when (and where) something is in stock and how quickly it can ship to them, or when they’ll have new inventory available if the item is out of stock. This information must be current, and it must set the proper expectations with the shopper.
  • Instant fulfillment. The overall shopping trend we’re seeing at SPS Commerce is immediate fulfillment: if the millennial shopper has selected an item, they expect to receive it in two days or less. In a perfect world, whenever they make a purchase, they would see that: 1) the item is in stock, 2) the item will ship immediately, and 3) the item’s delivery status post-sale.
  • No out-of-stocks. A retailer should never have an item listed for purchase if it’s out of stock. Millennials expect any item listed online to be available. If they spend time evaluating an item only to learn that it’s unavailable, they leave disappointed and aren’t afraid to use social media to share their negative experience.

Expect returns and automate to manage them

One of the most significant changes retailers need to address is returns. In the last two years, there has been a significant increase in returns, especially from the younger generations. Millennials like being able to have things delivered to their door (often for free). They’ll order many sizes and colors, and ship back the items they don’t want. Rather than discourage this behavior, retailers need to make returning items an easy process for millennial shoppers, as well as a profitable one for their supply chain.

One business barrier retailers face is allowing for cross-channel returns. Older shoppers understand they can’t always return items to their nearest store, but millennials are channel-agnostic. They don’t have the time or desire to understand a retailer’s business barriers. They simply want to make returns in the most convenient way possible for them, whether in the store or through the mail. Retailers need to comply.

I experienced the frustration and hassle of returning merchandise just last month. I ordered pants from a well-known national retailer online. Within the next week they were delivered on three different days, in three different types of packaging.

When I decided to return two of the pairs, one had a store receipt I could use for an in-store return. The other contained a return mailing label, which encouraged me to return it via mail, but I was also given the option of returning it to store. I ended up successfully returning the items at the store, but only after spending some time with the store’s manager. The process left me frustrated and less likely to shop the retailer in the future.

Finally, free shipping on returns is considered almost mandatory. Millennials don’t want to take on all the costs of returns or even shipments themselves, so retailers need to measure and determine how they can properly distribute the costs to remain profitable.

If you are transforming your inventory management and fulfillment operations to better engage the millennial shopper, contact SPS Commerce. Every day we help tens of thousands of retail organizations meet and exceed their shoppers’ expectations, and we can help you do the same.

 

Christina Borglund

Manager of Product Management at SPS Commerce
Christina Borglund has spent more than a decade at SPS Commerce focusing on providing innovative solutions to all companies involved in the retail supply chain. She specializes in providing Integrated Fulfillment services to meet the rapidly changing retail challenges driven by today’s consumer.
Christina Borglund

Latest posts by Christina Borglund (see all)