The millennial generation is the first to not care about ownership — and that’s causing a big crisis in retail.
The 18- to 34-year-olds “are continually changing the concept of ownership as the younger generations place less value on the ownership of hard assets,” according to a report by Goldman Sachs.
Millennials seem indifferent to once-important milestones like owning a house or vehicle, according to Goldman.
“A perfect example comes in the form of car ownership; Millennials seem to prefer the lack of constraints of car ownership and are shifting towards using service-based companies for their transportation needs such as Uber or Lyft,” according to the note.
Apparel retailers are threatened by rental startups like Rent the Runway and Bag Borrow or Steal, Grace Ehlers writes on industry website The Robin Report.
Rent the Runway has even started an unlimited subscription service for accessories and handbags.
The trend has also spread to the music and hospitality industries with companies like Spotify and Airbnb, Ehlers writes.
“Never mind buying a second home when you can rent a chateau in France on Airbnb for $US200. Why hire a chauffeur when they don’t come with an app that tracks their relative location to yours, like Uber?” she says. “Even owning the latest album of your favourite band feels a lot less appealing when you can stream it immediately on and offline with a Spotify pro membership, without taking up any space on your hard drive.”
The younger generation is increasingly “looking for less expensive alternatives to ownership,” Doug Stephens, author of the blog Retail Prophet, writes.
Millennials are increasingly living in small, urban apartments rather than sprawling suburban houses. As a result, they don’t have room for as many goods.
On top of that, younger people have discriminating taste as a result of exposure to online reviews.
“Sharing is here to stay,” he writes.
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