Renewed student loan payments will definitely impact the shopping behavior of Gen-Z and millennial shoppers. It’s fair to say that they will likely spend less this holiday season, but it might not be as drastic a decrease as anticipated.
A recent survey from Bankrate reported that despite these expenses, Gen-Z and millennial shoppers are still impulse shopping, especially on mobile. Gen-Z shoppers are more likely to regret these impulse buys, whereas millennials are more likely to view small “treat yourself”-style purchases as insignificant compared to larger payments they have to make on loans, vehicles, or homes.
Returns and exchanges will remain important for e-commerce, and not just because 92% of shoppers review a brand’s return policy before purchasing. It’s important to personalize your returns — in other words, giving returns the same care and attention you give to every interaction shoppers have with your brand.
How can brands strategize for the holiday season with millennial and Gen-Z consumer expectations in mind?
Gen-Z shoppers want eco-friendly return options like resale channels, or drop-off or return options with a reduced carbon footprint. A good example of this would be “Keep Item” features which allow you to refund a purchase without requiring the shopper to send back the item they’d like to return — helpful for reducing shipping costs and avoiding having to restock unsellable items.
For millennials, convenience matters, with frictionless, personalized returns and BOPIS/BORIS options being priorities. Both Gen-Z and millennial shoppers like to self-serve when making a return, and if they’re making an exchange, they hope that it’ll be quick and easy.
The most important thing to keep in mind during tighter economic situations is to focus on customer retention. To do this, you should leverage and market a good return policy to drive conversions. You should also make sure that you’re delivering an excellent returns experience in order to drive repeat purchases. And lastly, you’ll want to leverage post-purchase incentives (as well as fees) to drive the behavior you want. Make sure you’re rewarding your best customers, driving loyalty, and converting first-time buyers to repeat shoppers, all while mitigating return policy abuse.
How can brands craft meaningful experiences within returns for consumers to make the most of every purchase?
Definitely provide automated returns, not manual returns, to make the experience as optimal and self-service as possible for the customer. It is crucial to extend automation to other parts of your returns/exchanges process, like automatically limiting shipping options for heavier items, or helping you determine whether exchanged items can be resold.
You’ll also want to leverage post-purchase incentives to drive the ideal customer behavior, while driving customer loyalty and repeat purchase. There are also tools designed to make the exchange process look and feel more like shopping, while helping your brand retain revenue, and making the exchange process feel more intuitive for your shoppers.
Another option could be to offer your shoppers the ability to process an exchange before sending back their unwanted items. Doing so also helps brands guard against returns abuse. Returns management platforms can hold a customer’s credit card info during the exchange, and if the original unwanted item is not returned to the warehouse within a set period of time (or if a fraudulent return is attempted), the customer’s card is charged for the new item, and no refund is issued for the first item. It’s a nice compromise and a way to get your shoppers what they need more quickly, especially important during the holiday season.
— Tara Daly, Senior Director of Product Marketing at Loop