The saturation of markets across all industries, against an ever more precarious socio-political and environmental landscape has left consumers in an odd position. Whilst the overwhelming amount of choice at competitive prices can empower shoppers to make informed and savvy decisions, it can also completely paralyse them in the decision making process. A combination of price, value, and ethics is now a factor in every purchasing decision as younger generations have to consider a multitude of external factors that their parents, and previous generations, did not.
The property market is a ubiquitous indicator of millennial and Gen Z attitudes to the free market across the globe. With less than 50% of millennials born in 1990 expected to own property by the age of 40, it’s no wonder that ‘Generation Rent’ has filtered this way of living to other aspects of their lives. The lack of space, stability and financial freedom that comes with renting has had a knock on effect on how they approach life as a whole. In fact, 75% of millennials have said that they prefer to live a simpler lifestyle with less owned possessions.
Fewer ‘owned possessions’ covers everything from luxury handbags to cars to property. However, this is not to say that there is still not demand for such luxuries. New generations are prioritising access over ownership—giving rise to a sharing economy. At the most basic level, subscription models for entertainment services such as Netflix and Spotify have seen massive increases in users since launch as consumers want services that are convenient to them. These digital services mean that physical CDs or DVDs don’t take up the space that they don’t have in their homes; they can be utilised on the go, regardless of location; and they provide value for money as you are given a multitude of options for the same price as one physical product. The success of Netflix and Spotify has seen a number of competitors such as Amazon, Apple, and Disney enter the market, leading to something of a ‘streaming war’ as each tries to win consumers’ attentions and monthly subscriptions. However, new services entering the market, and the sheer amount of content available to consumers almost puts them back at square one—an overwhelming amount of choice that they don’t have the time, money, or mental bandwidth to concern themselves with.
Beyond digital media services, the sharing economy is growing rapidly in areas where consumers no longer want to commit to purchasing big ticket items. The lack of cars being bought has seen an increase in not only leasing models direct from the dealer, but services such as Drover. This subscription model gives users the flexibility of services like Zipcar, but with the added autonomy of their own dedicated vehicle. It allows consumers to lead the lifestyle that they want to, without the added pressure of any real longterm fiscal responsibility or commitment. The same sentiment is applicable to the rise of Airbnb rentals. Not only are they often cheaper than hotels, they provide users with their own space and a sense of immersion in the local community that is valued by younger generations.
Moreover, it supports independent owners as opposed to big corporations behind hotel chains. The ethical element of supporting a sharing economy through services like Airbnb and Uber is important to note as consumers increasingly become disillusioned with mass consumerism and the bodies behind hyper-capitalism. The rise of minimalist living á la Marie Kondo and the Swedish lifestyle trend of lagom, coupled with increased living expenses and stunted salaries, has led to a preference for sustainable, ethical purchases. Subscription services like Oddbox aim to reduce food waste by working directly with farmers to sell their surplus and less aesthetically pleasing produce. This allows consumers to support local businesses and help the environment at the same time, without having to leave their houses.
As we know, convenience is a clinching factor in winning consumer attention and money in a world of unparalleled choice. This alone has led to a significant and steady rise in online shopping over the past decade. More recently however, it has lead to a significant uptake in subscription and rental services in the retail market. A 2017 survey found that in the UK, an average of 55% of the clothes in women’s wardrobes go unworn. The proliferation of fast fashion brands, increasingly quick trend turnarounds, and the impact of social media on consumers’ willingness to repeat outfits does not make this a surprising statistic. However, as shoppers become more aware of the damage fast fashion does to the environment and the underprivileged workers who create the products, there’s a growing market for sustainable and quality items. Rent the Runway, Higher Studio, and Front Row allow users to choose between monthly subscriptions or pay-as-you-go models to rent luxury items for a given period of time. In the same vein as the car subscription service, these platforms allow consumers to experience and try new items, projecting the lifestyle and image that they want to, without a huge financial or longterm commitment. Sites like By Rotation, The Nu Wardrobe, and HURR take it a step further by adopting a peer-to-peer model. Not only does this have all the benefits of rental services curated by stylists and buyers, it also creates a community of like-minded consumers which is more likely to impact change. Closing the loop on the fashion market by reducing the need more products whilst simultaneously making use of those already in circulation is truly sustainable, not only for the environment but more people’s budgets and lifestyles, too.
Though subscription models are successful, consumers still have a multitude of services to choose between and little loyalty to any particular one. A reliance on reviews and recommendations, mixed with factors such as price, convenience and transparent values are all determining factors in consumer choices. It’s a fine balance to strike, but with thorough audience research and insight, brands can hone their proposition to best reach and impact their desired users.
The lack of space, stability and financial freedom that comes with renting has had a knock on effect on how younger generations approach life as a whole.