3 Ways Consumers are Driving Change in Retail Logistics for 2023
Here's how retailers can embrace consumer cues on sustainability, transparency and customer service in 2023 and beyond.
Consumers are increasingly exhibiting preferences for ethical products, transparency, sustainable practices, personalization, convenience and digitization — and it's driving big changes across the retail industry as brands take note and adapt.
Across the board, consumer expectations are raising the bar for retailers. This leaves leaders with two choices: hesitate, reach a tipping point and be forced to pivot (and risk losing customers along the way), or stay in sync with consumers and make impactful operational changes now.
On the logistics front, here are three ways retailers can embrace consumer cues on sustainability, transparency and customer service in 2023 and beyond:
1. Sustainable shipping
Consumers have come to expect environmental responsibility from the brands they shop. Across generations, consumers are even willing to pay more for sustainable products. In fact, 90% of Gen Z consumers said they are inclined to spend an extra 10% on sustainable options.
Yet, despite this number being up from just over 34% two years prior, two-thirds of retail executives believe consumers wouldn't pay more for sustainable products. Disconnects such as this present an opportunity for retailers to listen to what consumers are saying about the importance of sustainability and take action.
For starters, consumers are growing mindful of the long-term impacts of their purchasing decisions, especially in this era of ecommerce and next-day offerings that increase delivery vehicle traffic, carbon emissions and packaging. According to Forrester, some 68% of highly empowered consumers plan to increase their efforts to identify brands that reduce their environmental impact, and 61% seek out energy-efficient labels when shopping.
With retail supply chains responsible for roughly 25% of global emissions, brands have an opportunity to share in consumer values and adopt environmentally sound practices at every stage in their supply chain. This spans sourcing renewable or recycled materials, utilizing clean energy sources, adopting reusable bags and committing to sustainable last-mile deliveries.
Take the Montreal-based sustainable fashion brand, Frank And Oak, for example. The company recently partnered with a sustainability-minded third-party logistics (3PL) provider to move its warehousing closer to its customers and offer shoppers carbon-neutral, same-day and next-day deliveries. Across major Canadian and U.S. markets, shoppers' packages will be delivered via electric vehicles, and where EV deliveries aren't possible, carbon offsets will be calculated and bought.
Port to porch, retailers can execute greener shipping practices with 3PL providers that align their services with both brand and consumer sustainability goals.
2. Increased transparency
Increased transparency, such as from where materials are sourced to the environmental and actual costs of making products, helps shoppers decide whether to click "purchase" or not. The American clothing retailer, Everlane, calls this high level of visibility "radical transparency." Founded on the mission of selling clothing with transparent pricing, Everlane reveals the true costs behind producing all of its products and provides insight into its sustainability initiatives and conscientious business practices across its operations.
Consumers are now accustomed to this degree of transparency, and it goes beyond clicking "buy." Once they've placed an online order, shoppers want to know exactly where their order is and when it will arrive at their doorstep.
Within logistics, retailers can deliver complete transparency of their fulfillment and delivery operations. Tech-enabled 3PLs give retailers the ability to track thousands of SKUs housed, packed and shipped from centralized warehouses, then grant consumers access to in-depth order tracking right up until the minute their order is delivered.
3. Better customer service
Consumers are vocal about their experiences — especially when it comes to deliveries —and share their opinions by posting reviews, tagging brands on social media and flexing their spending muscle.
Nearly 80% of U.S. consumers say speed, convenience, friendly service and knowledgeable help are key to a positive customer service experience. In fact, 32% of global consumers would walk away from a brand they love after just one bad experience.
When retailers partner with a 3PL that supports every facet of their inventory, warehousing, order fulfillment, delivery and returns, companies remain in control of their entire logistics operation. And with so many pain points along the fulfillment journey where issues can arise, retailers need supply-chain partners with brand knowledge who can offer quick issue resolution at every step. By partnering with a 3PL that manages its end-to-end logistics, retailers can effectively deliver seamless customer service experiences from the time an order is placed to when it arrives at a consumer's door.
Consumers have always been powerful agents of progress. In response to the pandemic, supply chain issues and climate change, consumer needs and desires have shifted. Retailers would be wise to meet consumers where they are and embrace change, especially around sustainability, transparency and customer service.
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