“The things you own end up owning you. It’s only after you lose everything that you’re free to do anything.”
This is a quote from the novel Fight Club by Chuck Palahniuk, but it could easily be the mantra of the Millennial generation. This generation (born after 1980) has been at the leading edge of the so-called Sharing Economy – as creators and consumers – an economy that was estimated by Forbes to be worth around $3.5 billion in 2013, and growing at around 25%.
Perhaps the most famous posterchild brand for the sharing economy - Airbnb – has just been valued at $10bn, which makes it worth more than some long established hotel companies, such as Hyatt Hotels Corp ($8.4bn)
There is almost no sector that the sharing economy isn’t touching. From Spotify in entertainment to Zip Car and city bike schemes in transport, to Rent the Runway in fashion, to Desktime in office space, to Zilok for just about anything, to Task Rabbit for a helping hand.
For many brands who are not playing in this space, or who have competitors that do, it’s a frightening prospect. It’s no surprise that taxi businesses and the hotel industry are up in arms, as they see their entire business models being disrupted. But, resistance or denial is becoming more futile, and brand owners are going to have to find ways to co-exist, or compete – albeit with business models that are not built around a sharing economy proposition – in order to provide Millennials with alternatives that speak to their needs and desires.
It demands understanding how values and attitudes towards the concepts of consumption and ownership are fundamentally shifting among younger people.
“Things are changing. Young people don’t want to be tied down anymore. We’re happier to rent or share rather than own. In fact, it feels smarter.” The words of twenty-five year old Alison from London.
For those weaned on technology and facing the harsh realities of a tepid youth labour market and extortionate rents, it’s probably not a surprise that the sharing economy holds so much appeal. Whether they’re renting out their own stuff, or renting out their own time, there’s a pragmatism attached to these behaviours. However, it’s not a blip. These behaviours are a symptom of a massive change in values and attitudes towards commitment and ownership.
This is the anti-commitment generation. Recent research from the Pew Research Center in the United States shows how “unattached” Millennials actually are. 50% now describe themselves as political independents and about three-in-ten (29%) say they are not affiliated with any religion. And, they’re detaching themselves from that other institution called Marriage. Just 26% of this generation is married compared to 36% of Generation X and 48% of Baby Boomers when they were were at the same age.
Brands, whether they are built around a sharing model or a more traditional business model, now need to address these new attitudes, if they are going to connect with Generation Share.
Recent research by McQ Thinking with young people in London and New York has revealed some ways that brands can do this:
1. Understand that they see their stuff as stock rather than possessions This is perhaps most evident in a category like clothing. The young women we spoke to said that when one of their housemates gets a new piece of clothing, everyone has borrowed it within a month. They also mentioned that it is better when someone else buys an item of clothing because you get to wear and enjoy it, but not worry about being photographed in it twice and exposed on Facebook or Instagram.
Brands need to provide more ways for young people to share, sell on or rent out their clothing if they want to. ASOS aren’t just selling their apparel to their young customers they’re enabling them to sell their clothing on to other people around the world with their Marketplace site. And, Mud Jeans are now offering a service whereby you can lease their jeans, and trade them in for a new pair after a year.
2. Enable their sharing instincts, don’t limit them When it comes to something like books young people believe they should be as shareable as oxygen with their housemates. Not only are there the economic benefits, sharing allows them to talk about them afterwards. However, e-book services are not capitalising on this, allowing people to only share an e-book with one person for a maximum of 14 days, in the case of Amazon. They are in effect making a pursuit which has a social dimension to it exclusively personal.
3. Don’t try to lock them in ’Contract’ is a dirty word with this generation. A mobile contract that lasts 18 – 14 months can just be too intimidating. Our respondents felt more comfortable with Pay-as-you-go phones, and some mentioned O2 Refresh, a new kind of contract that lets you change your phone whenever you want to within the period of your contract.
Geography is also a factor that brands with contracts need to start taking into account. This generation is going to be more geographically mobile than their predecessors. Mobile phone companies, for example, should consider allowing people to transfer their contracts should they choose to work abroad. The network Three recently announced they were abolishing roaming charges in seven countries outside the UK, which is an example of greater flexibility.
4. Speak their language Brands need to tune into Millennials’ desire for freedom, fluidity, flexibility and choice through the language and imagery that they use in their communications, and move away from the old codes of rigid, fixed and closed systems . Even if not strictly built around sharing economy principles, they need to find ways to give young consumers more of the “wiggle room” they desire.
McQ Thinking is a boutique brand and communication consultancy that partners with the marketing and advertising communities. Find out more at www.mcqthinking.com.