Winning the Holiday Season: Millennial and Gen Z Preferences for Sustainability, Shipping and Returns

Millennials and Gen Z represent a significant portion of today’s consumer base, and their preferences are shaping the future of retail, especially in e-commerce. With the peak holiday shopping season upon us, to remain competitive and profitable retailers must align their strategies with the expectations of these younger generations. Meeting their needs not only drives revenue but also fosters brand loyalty, as shoppers are more likely to return to brands that understand their desires. So, what do millennial and Gen Z consumers want during their holiday shopping experiences? I will give you a hint: they're not new to the retail industry.

Free Shipping, Sustainability and Clear Return Processes

Free Shipping Remains King

Free shipping is still the most important factor influencing consumers’ holiday shopping decisions, with 86 percent of consumers citing it as a priority, and 80 percent of Gen Z and millennials agreeing. The preference is so strong that 22 percent of consumers say they would abandon their shopping cart if free shipping isn’t offered, and 46 percent would choose slower, free shipping over expedited shipping for a fee.

During the holiday season, retailers must prioritize free and discounted shipping in their marketing strategies to attract customers. Additionally, to meet demand and ensure timely delivery they should also consider launching holiday promotions earlier, allowing enough time to offer free shipping and guarantee orders arrive before the holidays.

A Continued Focus on Sustainability

Sustainability has become a key priority for retailers in recent years as consumers grow increasingly aware of the environmental impact of retail operations — particularly transportation emissions and packaging waste. As a result, many shoppers are now seeking brands that actively promote sustainability and demonstrate eco-friendly initiatives. If retailers fail to do so, they risk losing customer support.

In fact, new data from UPS Capital shows that 80 percent of millennials and 77 percent of Gen Z consider sustainability a significant factor in their purchasing decisions. With this in mind, retailers must highlight their sustainability efforts, especially if they aim to retain the loyalty of younger generations during the competitive holiday shopping season.

Clear and Pain-Free Returns

Returns are a pain point for both retailers and consumers, and shoppers are increasingly seeking a streamlined and hassle-free process. In fact, 54 percent of millennials and 39 percent of Gen Z consider free returns a vital component of the shopping experience. To reduce confusion and frustration, retailers must be clear and transparent with their return policies, ensuring that consumers understand the process before they complete their purchase. Offering flexible return options such as drop-off locations and QR codes for return labels can also enhance the customer experience.

By aligning with these consumer preferences, retailers can position themselves for a successful holiday season while building brand loyalty and awareness that extends well into the new year. To capture the attention of young shoppers, especially millennials and Gen Z, retailers should begin promoting free shipping, sustainable initiatives, and simplified returns as soon as possible.

Dan Spitale is a vice president at UPS Capital and brings over two decades of commercial sales and marketing experience in financial services and logistics to UPS Capital.