Are You Ready For The Rise of the ‘Zero Consumer?’

Who is the ‘zero consumer’ and why should retailers care?

"Zero consumer" is a term coined by McKinsey and Company to define a new segment of shoppers with no affinities for how and where they shop or how much they spend. They thrive on dynamic preferences and adaptability, seamlessly navigating online and offline channels and expecting a consistent experience across all platforms. This omnichannel behavior challenges retailers to deliver cohesive interactions that meet their expectations.

By understanding the traits of this new segment zero — dynamic preferences and value-driven decisions — retailers can turn challenges into opportunities.

Understanding the ‘zero’ of the ‘zero consumer’

The word "zero" is used to describe this cohort's lack of preferences when it comes to shopping channels and influence triggers (zero boundaries), pricing (zero midrange), or brands (zero loyalty). It also refers to their desire to have "zero" impact on the environment. Here's a closer look at these four traits:

Zero boundaries

“Zero” boundaries" emphasizes the seamless integration of online and offline shopping. Their focus is literally everywhere and they can be influenced by social media stars, celebrities, bloggers, vloggers, or in-store attractions. They see their interactions as interconnected, so retailers must create an ecosystem and smart warehousing that adds value at every touchpoint.

Consumer expectations:

• Seamless experience: Zero consumers crave frictionless transitions between channels, prioritizing convenience.
• Personalization: They expect tailored interactions that enhance their shopping journey.
• Trust and transparency: Consumers demand transparency in product sourcing and brand values.

Retailers should ensure consistent messaging across platforms to build trust and collect valuable data for personalized marketing. These seamless experiences can boost cross-channel selling and maximize sales potential.

Zero midrange

A midrange brand occupies the space between budget-friendly fast fashion and high-end luxury brands. These brands offer higher quality and more durable products than fast fashion, but at more accessible prices compared to luxury designers. Typically, midrange brands feature items priced between $150 and $600. The zero consumer has no midrange. Rather, they have a "scrimp-and-splurge" mentality, seeking budget-friendly options while indulging in premium products.

Retailer strategies:

• Value communication: Clearly communicate unique offerings, especially for midpriced brands that need to stand out.
• Dynamic pricing: Flexible pricing can cater to both budget-conscious shoppers and those willing to splurge.
• Product curation: A curated selection of affordable and premium items can attract zero consumers.

Zero loyalty

“Zero” loyalty reflects a shift in how consumers engage with brands, accelerated by the pandemic. Shoppers have reassessed their preferences, favoring convenience, quality, and price over traditional loyalty. Brands must earn consumer trust through consistent quality.

Key drivers for switching include the pursuit of better deals and quality. The rise of social media amplifies peer recommendations, making a positive online presence essential. Younger zero consumers, in particular, seek fresh experiences and innovative products, pushing retailers to adapt and innovate continuously.

With these defining traits in mind, we see that zero consumers prioritize sustainability, reshaping retail expectations. This brings us to the importance of net zero initiatives and how retailers can align with these principles to enhance the shopping experience for zero consumers. Let’s explore how to evaluate shopping platforms effectively.

Zero impact

"Net zero" refers to the balance between the amount of greenhouse gases emitted into the atmosphere and the amount removed from it. Achieving net zero means that any greenhouse gas emissions produced by human activities are offset by an equivalent amount of emissions being removed, resulting in no net increase in atmospheric greenhouse gases. This concept is crucial for combating climate change, as it aims to limit global warming by reducing the overall concentration of greenhouse gases. Strategies to achieve net zero include reducing emissions through renewable energy, improving energy efficiency, and using technologies like carbon capture and storage

Put simply, "net zero" means consuming only as much energy as is produced and this idea is essential for the zero consumers. As these consumers seek brands that align with their environmental values, retailers must adapt to meet their expectations. Here are some key insights:

Consumer preferences: Brands committed to eco-friendly practices are favored, while transparency in supply chains is crucial. Ignoring ethical standards can turn consumers away.

Accountability: Today’s consumers hold brands accountable for their sustainability claims, requiring genuine efforts to reduce environmental impacts. To align with these expectations, retailers should:

• Reduce environmental footprints.
• Provide clear sourcing information.
• Engage customers in sustainability initiatives.
• Develop eco-friendly products.

In summary, prioritizing "net zero" and carefully evaluating shopping platforms are essential for creating satisfying retail experiences that resonate with zero consumers. By considering these factors, retailers can make informed decisions that align with consumer values.

AutoStore helps retailers adapt to zero consumers

AutoStore solutions align perfectly with the needs and characteristics of zero consumers, providing retailers with the tools to adapt effectively.  

Data connectivity

AutoStore solutions help retailers adapt to zero consumers with machine data provided through robotic processes. By integrating this data with commerce and customer information through your warehouse management system (WMS) or other platforms, you gain deeper insights and analysis. For instance, connecting previously isolated data allows you to predict customer needs, forecast demand, and evaluate current operations under various scenarios.

When combined with manufacturing data from earlier stages in the supply chain, you can also shorten overall lead times. This proactive approach ensures that, despite order surges, supply chain disruptions, or inventory challenges, you stay ahead, maintaining continuous operations and reliable delivery. While other retailers face risks, you build reliability and trust, fostering repeat business and a strong reputation that attracts zero consumers.

{{cta1}}

Accuracy

AutoStore is a standout solution in the warehousing sector, particularly when it comes to error prevention and reduction. Its impressive pick accuracy rate of 99.9% significantly surpasses the retail average of 96-98%. Considering that each warehouse mistake can cost between $30 to $50, the economic benefits of using AutoStore are clear.

What sets AutoStore apart from other technological solutions is its precision. AutoStore delivers a single SKU Bin directly to the operator, with a software user interface that specifies exactly what to pick and how much to pick. This approach eliminates potential confusion or mispicks, ensuring the worker gets the exact item needed. The only margin for error is in unit quantity, but such mistakes are minimal, which explains why the accuracy rate is just shy of 100%. In comparison, other technologies like barcode scanning and voice picking still leave room for human error, leading to occasional mistakes.

Moreover, AutoStore proves invaluable during peak times. It maintains its impressive 99.9% pick accuracy regardless of whether the worker is a seasoned expert or a newcomer. This feature is particularly beneficial for warehouses that hire agency staff or seasonal workers during high-demand periods. This means businesses can efficiently handle the surge in orders during peak seasons, acquire new customers due to their exceptional service, and retain them throughout the year.

Sustainability

Word of mouth and reputation are critical to customer loyalty, and a tarnished reputation can happen overnight. In today's eco-conscious world, sustainability efforts are essential for maintaining a positive reputation. In fact, 87% of customers prefer to buy from companies that support causes they care about, and 70% are willing to spend more on socially responsible brands.

AutoStore supports sustainability by optimizing space and reducing energy use, aligning with zero consumers' eco-friendly values.

On average, the cubic Grid can reduce storage footprints by 75%, greatly reducing the need for costly new construction and lowering environmental impact. In terms of energy savings, consider this: the average AutoStore system operating with 3 ConveyorPorts, 7 CarouselPorts, 1 Controller, 40 Red Line Robots, and 30 charging stations operating 8 hours per day and 250 days per year consumes approximately 8,900 KWh per year.

This output can be generated with rooftop photovoltaic systems. For example:

• Logistics provider Active Ants implemented AutoStore at Brackmills Industrial Estate in Northampton, England, using 1,000 rooftop solar cells.
• Norwegian wholesaler Berggård Amundsen operates its warehouse, which includes 11 AutoStore Robots picking from 17,000 Bins, entirely on solar power from April to September.
• The Dutch company Bleckmann operates its AutoStore within a 100% solar-powered fulfillment center in Grobbendonk, Belgium.

{{cta2}}

Conclusion

The rise of the zero consumer marks a significant shift in the retail landscape, where sustainability, convenience, and personalization are top priorities. Retailers must adapt by embracing seamless omnichannel experiences, flexible inventory management, and eco-conscious practices. AutoStore’s innovative solutions offer retailers the tools to meet these evolving expectations, ensuring they stay competitive and relevant in the face of changing consumer behaviors. As zero consumers continue to reshape the industry, those who adapt will thrive in this new era of retail.

FAQ

What is a zero customer?

A shopper focused on sustainability, convenience, and brand values over price.

What is zero distance to consumer?

Direct, seamless engagement between a brand and its customers.

What does zero range mean?

A shift from midrange products to budget or premium options.