While the classic American Dream is to own everything, cars, homes, luxury items and such, millennials are creating their own version of the American Dream: sharing with access, without owning.
"For some of these millennials, access is more important than ownership - and that's why the "No Strings Economy," also referred to as the Sharing Economy holds so much appeal. It gives them access to things they may not have the financial resources to afford otherwise, alternatively it alleviates them of the burden and/or responsibility of owning something outright," exclaims Sheryl Connelly, Global Trends and Futuring Manager at Ford Motor Corporation.
Millennials, born 1980-2000, are a generation 92 million strong. They stand to inherit large amounts of wealth and will control the spending power in the U.S. for quite some time. This generation has grown up with immense uncertainty, being witness to the 2008-2009 stock market catastrophe and partners-in-crime with the surging student debt that has enveloped this country. These have left lasting reminders for millennials that owning things might not be the smartest financial decision.
According to the Organization for Economic Co-Operation and Development, in 2013 60% of all millennials were interested in renting vs. owning all types of goods and services. With the surge of non-traditional renting options for millennials, everything from cars, to clothing, to music, to vacations, companies have been working feverishly to provide a continuing source of new products and innovations to meet the millennial needs.
Penn Schoen Berland (PSB), an independent research company, conducted a poll on behalf of Ford Motor Company among 1,000 Generation Z (aged 16-22) and Generation Y (aged 23-34) respondents in the U.S. There were some surprising results regarding the millennial sharing generation:
•For Gen Y and Gen Z, the sharing economy is above all an opportunity to save money (more than half say saving money is an advantage to sharing goods and services)
•1 in 3 millennials are interested in renting out their own stuff as a way to earn extra money
•Respondents share because it gives them the opportunity to try out new products (40%) and have access to more options (33%)
•"Rides in a Car" takes No. 2 Spot in list of items young Americans are most open to sharing following books
What does this mean for companies like Ford? While millennials are certainly still buying cars, the when and how they use their car is what is changing for this demographic. Between Ford's Go Drive car-sharing service in London, to their Car Swap and City Driving on Demand service, they plan to stay current and relevant with the millennial generation offering them exactly what they want - ownership, access and the ability to share.
GoDrive is an on-demand, public car-sharing pilot. The service offers customers flexible, practical and affordable access to a fleet of cars for one-way journeys with easy parking throughout London.
Companies like Uber, Spotify and Airbnb are all recent success stories that also speak to the new sharing economy. In years past the idea of renting someone's apartment for a vacation stay was nothing short of a foreign concept to millenials. Airbnb has created an entirely new way of traveling for millennials, providing access to properties ranging from intimate to exotic all around the world with competitive pricing that most major hotel chains can't compete against.
Sharing also extends past luxuries like cars and vacations for millennials. Rent the Runway, a popular online retailer offering designer dresses and accessories for rent, has surged to success among millennial women where luxury designers might have normally been out of their financial reach.
"Not only is Rent the Runway the smart choice of women who value experiences over possessions, it's also the modern one. In today's sharing economy, our customer gets around the city via Uber, she listens to her music on Spotify and she uses Airbnb when she travels. We are the first company to allow her to approach fashion in the same way," states Welington Fonseca, SVP of Marketing.
Millennials' need for sharing is not just about finances, but rather their insatiable desire to refresh a product or service as fast as they do their social media feeds. Fonseca believes that "Rent the Runway's unlimited service is the antidote to fast fashion. It offers women a subscription to fashion, giving them access to designer statement pieces on a rotating basis, so they can augment their closet staples with quality, covetable pieces."
Being 92 million strong, the sharing economy that millennials have created is a trend that is sure to be long lasting. With companies like Ford and Rent the Runway already recognizing the significance of the millennial sharing economy, this proves to be a very viable space for future innovation and product creation for years to come.