How will Gen Z consumers affect the supply chain?

February 17, 2023

E-commerce is booming. In fact, it's largely the reason the economy has begun returning to pre-pandemic levels after COVID-19. Most of the world's consumers are online, with over five billion people worldwide having internet access, which constitutes almost 65% of the entire human population.

And, there's no group of people more chronically online than Gen Z. This age cohort — born between 1996 and 2012 — has grown up with the internet and smart technology. They know how tech works and expect almost everything to be connected to the internet. It makes sense that they're a major driving force behind the proliferation of the Internet of Things and digitized services.

So, in what ways will this generation shape the world of logistics? Let's take a look:

Sustainable practices

As Forbes explains, there is, perhaps, no single contingent more invested in protecting the environment than Gen Z. As the effects of climate change continue worsening, these consumers are voting with their wallet by purchasing from brands that use sustainable materials and implement eco-friendly business operations.

This means that retailers, distributors and other supply chain companies will have to ensure they use renewable energy sources at their premises and for fuel, implement recycling policies and utilize recyclable or biodegradable packaging.

Greater automation

Manufacturing and distribution companies already have to automate to keep up with their competition. But, in addition to outpacing their competitors, they also have to satisfy their youngest customers whose buying power increases every year. This compels businesses to make the move to online shopping, payments and customer support.

According to Gartner, they'll propel companies toward hyperautomation: a mammoth blend of incredibly advanced machine learning, artificial intelligence and robotic process automation. They want chatbots that provide immediate support, instant online payments and algorithms that show them what they want or need at the exact time they're looking for it.

Faster distribution

There's a pesky, lingering stereotype that today's youth are all about instant gratification. To a degree, that's true. Per Omnia Retail, many of these consumers expect same-day delivery (or something close to it). A survey conducted by Drapers Online found that over half of them won't purchase from a brand or platform again if delivery takes longer than promised. This is especially relevant for groceries and takeout, as Salesforce tells us. In fact, over three-quarters of Gen Zers will choose a product based on how quickly it will arrive on their doorstep rather than which brand produces it.

This will present companies with the challenge of reducing their last-mile delivery times. Slow and steady decidedly won't win the race. Per Businesswire, businesses will have to investigate options such as GPS tracking, centralized lockers and autonomous delivery robots or drones to meet this demand. These technologies will require great degrees of data quality, visibility and traceability if organizations want to hit that quick delivery mark.