According to the 2015 “1099 Economy Workforce Report,” commissioned by venture capitalists and Stanford University alumni, 39 percent of sharing-economy workers are ages 18-34. This is coupled with almost half (49%) of Sharing-Economy consumers, also ages 18-34, or commonly referred to as “Millennials”.
Yet, AC Nielsen also provides evidence that the majority of consumers in the sharing economy tend to own a house, have children and earn above-average wages, suggesting that sharing is much more than a millennial-driven phenomenon.
So what type of impact are Millennials having in the Sharing Economy? This blog post gathers key statistics and data to help answer that question.
Millennials resonate with the idea of the Sharing Economy since it perfectly fits their budgets. For example, an article by Lexology says, Compared to previous generations, Millennials have less spending power, are less likely to form households in their 20s and early 30s and are choosing to forego suburban neighborhoods in favor of smaller urban apartments. In turn, “They’re taking a more asset-light stance toward consumption, putting off buying a home in favor of renting, forgoing a car payment and taking Uber, or skipping a hotel in favor of booking a room via Airbnb.”
Additionally, Millennials’ affinity for technology has provided a big boost to the sharing economy. A senior staff writer at The Daily Californian writes, Demographic changes, coupled with the rise of sharing economy options, seem to be paving a new path for the way that young people interact with businesses. For instance, “digital technologies like GPS-enabled smartphones allow millennials to quickly make and respond to requests for goods and services and complete the transactions through online payment systems like PayPal.”
And, finally, research indicates that Millennials are having an increasing impact on the retail industry. According to an article in the April 2016 issue of Harvard Business Review magazine, the largest category of spending in the Sharing-Economy is online marketplaces (e.g. Ebay, Etsy), with 16.3 million consumers each month spending almost $36 billion annually.
These reports estimate that the generation’s spending will soon account for approximately 30% of all retail sales.
And, HuffPost Business says, “Nowhere is this medium of exchange more timely than among college and university students worldwide.” Lexology helps explain this claim by providing the following two examples:
- Startup Rent The Runway urges customers to question why buy when you can borrow by offering short-term rental options for what might otherwise be prohibitively expensive pieces of formal attire.
- More traditional retailers such as The Home Depot offer customers the opportunity to rent expensive machinery such as a stump grinder or sod cutter, items that would otherwise often clutter a garage after they are used for a limited project.
These offerings hit the same trends: why spend hundreds, if not thousands, when you can share and save valuable space in the process? The “digital natives”, also referred to as, “Millennials” are technology savvy and able to take advantage of these services to have their limited capital extend longer.