Consumerism in
the Millennial Age
Executive Summary
In no generation is the aftermath of
the recession more pronounced and
In this white paper, you will learn
the following:
•
ingrained than in millennials.
How post-recession consumers
differ from their predecessors
•
What the “sharing economy” is,
and how the concept of value
has shifted
Millennials came of financial age during a period of acute
economic decline and subsequent unstable and slow recovery.
Millennials have seen that jobs and material goods can be
lost, that homes can go into foreclosure, and that the ability
to remain mobile for a new career opportunity or a worldly
experience is paramount.
At the same time, technological advances have brought
about an era in which immediate access – to information,
to skilled labor, to entertainment, to opportunity, to material
goods and to everything in between – has become not only
possible but expected.
Businesses today are faced with a considerable shift in consumer
priorities, along with the consequent emergence of a new
competitive landscape. In order to compete in this new economy,
in which permanent roots are eschewed and access trumps
ownership, companies may need to reevaluate some common
assumptions about the nature of consumerism.
•
How marketers can adapt
their strategies to better reach
millennial consumers
Contents
Introduction
4
Post-recession spending behavior
5
Millennials come of financial age
6
Consuming experiences, not goods
7
Redefining a product's value
8
Global-scale accessibility
9
An alternative economic perspective
10
Collaborative commerce in practice
11
Sharing underused and high-cost resources
13
Sharing knowledge and skills
14
Marketing challenges
15
Looking forward
18
Introduction
Perhaps more than any other generation, baby boomers in
their prime valued the luxury of ownership and full-service
– a characteristic resulting from numerous factors, including
growing up with parents who lived through the Depression
and the rise in commercialism following WWII.
A “keeping-up-with-the-Joneses” mentality, along with
a generally optimistic nationwide sense of economic
strength, led to a lot of shopping, a lot of buying and a lot
of collecting.
Things have changed.
The economic downturn in the late 2000s hit a lot of
people hard and resulted in sweeping changes in attitudes
and habits, resulting in a shift from “consumption mania”
to a whole new economy. 1
Priorities have shifted from demonstrating “status” with
the permanent trappings of the American dream to “status
updates” focused on key – but generally fleeting – moments
and thoughts.
Today, dollars are more likely to be spent engaging in activities
that can be shared via social media, as well as purchasing
the devices with which to share them, than making sure
one’s lawn mower is as impressive as the neighbors’.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
4
Post-recession
spending behavior
In an article in Millennial Marketing, culture-trends analyst Tim Stock
of Parsons School of Design in New York was quoted as saying,
“The recession has left us acutely aware of the fallacies of finance and
the need for sustainability.”
2
Post-recession consumers routinely base shopping
In the midst of all of this price- and socially-
decisions on which store or website offers the
conscious spending, material goods take the back
lowest prices after perusing weekly advertisements
seat to experiences. Consumers may bargain shop
and performing online research for the best deals.
for household goods and groceries, but they are
3
They shop locally. They are aware of which producers
loathe to deprive themselves of daily consumable
have policies that protect the environment, support
luxuries, such as a cafe mocha latte at the local
“cruelty-free” initiatives or benefit those in need.
coffee shop or on-demand TV. 4
Moreover, if today’s consumers visit a premium store,
Although people will always consume, we have
they typically do not “stock up” in one trip but
begun to view shopping as a necessary evil and
make several additional stops to discounters and
become more thoughtful and deliberate about how
supermarkets, as well as making online purchases.
our resources are spent.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Millennials come of financial age
One group in particular, the teens and adults of today, categorized as
“millennials” (generally considered those born between 1980 and 2000),
have come of financial age in the post-recession era and taken these
consumer behaviors, including the daily indulgence of a coffee or an
online streaming service, one step further.
Millennials are different from their parents. While
there are always exceptions, millennials are
typically more transient than their predecessors;
as they seek out the work-life balance and the
In early 2016, Marie Kondo’s guide to decluttering,
The Life-Changing Magic of Tidying Up, has held
a number one spot on the New York Times bestsellers list for well over a year. It’s only one
communities with which they feel most comfortable,
of a wealth of books and websites devoted to
they often change jobs and move from place to place.
eliminating excess, downsizing, “tiny houses,” 5
Millennials are also products of the “digital age,”
and other similar topics.
in which convenience trumps status, and experiences
– along with the ability to instantly share them
In a March 2015 Washington Post article, Jura Koncius
with the world – overshadow nostalgia or tradition
succinctly stated, “The 20- and 30-somethings
for tradition’s sake.
don’t appear to be defined by their possessions,
Thus, it is no surprise that it is the millennial
other than their latest-generation cellphones.” 6
generation that has embraced the current movement
toward simplified living or “decluttering.” Where
people once purchased books on effectively organizing
their belongings, today the focus is on letting go of
those belongings.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Consuming experiences,
not goods
Millennials are marrying and becoming parents at a much later age
compared with previous generations. Delaying these milestones has
made it easier for millennials to engage in the authentic and worldly
experiences that they desire, particularly through international travel.7
Having fewer material possessions facilitates personal mobility, not
only making it easier to relocate for a job opportunity, but also making
it easier to travel in general. If you can carry all of your necessities in
cell phone storage – and a backpack or duffel bag – you can leave on
a moment’s notice.
This love of travel has not translated into an uptick in car ownership;
in fact, car ownership among millennials has reached historic lows.
So, whether at home or on the road, how do millennials obtain access
to cars or other seldom-used products that they may occasionally need
if they don’t own them outright?
It is access to travel that is important to millennials, not the
actual ownership of the car. 8
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Redefining a
product’s value
We’ve come to realize that being able to use a product doesn’t necessarily
require owning it. If it’s something you can access conveniently and
inexpensively, there’s no need to shell out good money to make it “yours.”
For example, today’s consumers have eagerly adopted new technologies
that essentially replace things they used to buy outright, such as Netflix
for movies or Spotify for music. Having access to movies and music is
just as good for many people as owning physical versions of those things.
Unless you’re just into collecting stuff, the value of a product
isn’t in its ownership – it ’s in the ability to use it as needed.
As noted in a March 2013 article in The Economist, “Before the Internet,
renting a surfboard, a power tool or a parking space from someone else
was feasible, but [it] was usually more trouble than it was worth.” 9
People could share resources with friends and family on a small scale
– borrowing a friend’s pickup truck to move furniture, crashing with
friends while one’s duplex was being tented for termites – but it was all
small-scale. Until fairly recently, we had few truly powerful tools for
sharing resources in a meaningful way.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Global-scale accessibility
Today, we have a variety of
Internet-based services that
In the past, if you were visiting another city for
a few days, your accommodation options were
limited to staying with friends or spending cash
make resource sharing easy
on a motel or a hotel.
and affordable.
Today, even if your friends don’t reside near your
For many years, it was unthinkable to get around
home through Airbnb – and you can be an Airbnb
without owning a car, unless you lived in New York
provider when others are visiting your area.
City or another major city with comprehensive
Similarly, services such as Couchsurfing.com let
public transportation.
you crash on someone’s couch or in a spare room
Now, you can use Uber or Lyft for occasional rides
or share vehicles on demand with services such
chosen destination, you can stay in a stranger’s
for free, as long as you repay the favor for other
travelers in your town.
as Zipcar or Car2Go, and GM’s Maven allows users
to reserve rental vehicles with a smartphone app.
In many cities, you can even use bicycle-sharing
services for short trips through downtown.
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An alternative
economic perspective
Because the driving force behind millennials’ behavior in the market is the
need for access, not ownership, the stage has been set for a robust sharing
economy. As Rachel Botsman noted in her 2010 TED Talk, The Case for
Collaborative Consumption, “no one needs a drill; they [sic] just need the hole.” 10
The power drill is a perfect example of an item that everyone needs to use from
time to time, but few people actually need to own. The sharing economy, also
referred to as collaborative commerce, is built around the notion of spreading
the cost of ownership across several users. The more users, the cheaper the
item is for each person.
In the collaborative economy, if you own it, you can rent it to
someone; if you don’t own it, you can rent it from someone.
Consumers defray their personal cost of ownership by finding other users –
or waiting for those users to find them – who need something they own, from
homes and cars to household items and power tools. One user takes on the
upfront cost of purchasing the item, but that person can recoup it over time
from other users. Eventually, the owner could even turn a profit.
Of course, one doesn’t need a degree in economics to conclude that a rapid
increase in this type of sharing is directly at odds with the very nature
of consumerism.
If consumerism is defined as “a social and economic order that is based on the
systematic creation and fostering of a desire to purchase goods and services
in even greater amounts,” 11 how does consumerism integrate with a collaborative
economy, which exists primarily to minimize the purchase of goods?
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Collaborative commerce in practice
In the shadow of the American economic crisis in 2008, some consumers
found peer-to-peer commerce especially appealing. As an Economist
article stated, “Some see sharing, with its mantra that ‘access trumps
ownership,’ as a post-crisis antidote to materialism and overconsumption.”
But these attitudes do not necessarily translate into
behavior. For example, Adam Berk’s Neighborrow,
a site that was dedicated to helping neighborhoods
engage in local collaborative commerce, had thousands
of registered users. However, Berk was unable to get
even three of them to make a transaction.
Berk told Fast Company magazine that even though
the local borrowing service made perfect sense on
paper, he couldn’t get people to buy into the concept.
Instead of sharing perfectly good tools, he said, people
“go buy [a drill]. Or they just bang a screwdriver
through the wall.” 14
The Fast Company article, titled “The ‘Sharing Economy
is Dead, and We Killed It,” makes some excellent
points, but its focus is concentrated on the sharing
of physical goods, with the power drill being the
ubiquitous example. The September 2015 article states
that of eight sites dedicated to the idea of locally sharing
tools and similar products, only one, NeighborGoods,
is still in business.
12
U.S. ADULTS' PERCEPTIONS OF
COLLABORATIVE COMMERCE 13
86
IT MAKES LIFE
MORE AFFORDABLE
83
IT MAKES LIFE MORE CONVENIENT
AND EFFICIENT
76
IT’S BETTER FOR
THE ENVIRONMENT
78
IT BUILDS A
STRONGER ECONOMY
63
IT'S MORE FUN THAN ENGAGING
WITH TRADITIONAL COMPANIES
89
IT'S BASED ON TRUST BETWEEN
PROVIDERS AND USERS
%
%
%
%
%
%
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
11
One reason for the slow adoption of that service model
bucks more. Borrowing loses much of its luster
might be that the math just doesn’t add up for certain
when it’s virtually as cheap and convenient to
things. That’s the take from Ron J. Williams, the
make a purchase with a couple of clicks.
founder of a company called SnapGoods.
Regardless, local product sharing resources keep
Williams offered this example for the Fast Company
popping up, including a platform called MyNeighbor.
article: “For a drill, which by the way now costs
Cofounder Brendan Benzing told Fast Company he’s
$30, and you can get it on Amazon Now and have
convinced that “things will be different” for their
this thing delivered to you in an hour if you live in
creation: ‘It’s not often the [first] company ... tends
New York City – for something worth $30, is it really
to succeed. It’s the 10th or 13th.”
worth your time to trek potentially 25 minutes to
go get something that you spent $15 to use for the
The same modern technolog y that lets people
day, and then have to trek back?”
easily communicate their needs for borrowing
Even if you don’t live somewhere that has Amazon
items also lets them purchase items cheaply
Now, you can get free two-day delivery through
and have them delivered right to their front doors.
Amazon Prime or next-day delivery for a few
PERCENTAGE OF U.S. ADULTS PARTICIPATING IN THE SHARING ECONOMY 15
42
%
22
22%
%
SERVICE PLATFORMS
11%
(HANDY.COM, CARE.COM,
TASKRABBIT)
10 %
19%
9%
OFFERERS
(UBER, LYFT, SIDECAR)
MOST OFFERERS ARE ALSO USERS. TOTAL PARTICIPATION IS 44%
17%
ACCOMODATION SHARING
RIDE SHARING
USERS
CAR RENTAL
14 %
6%
(CAR2GO, ZIPCAR,
GETAROUND)
(AIRBNB, VRBO, HOMEAWAY)
FOOD & GOODS DELIVERY
11%
7%
(INSTACART, POSTMATES,
CAVIAR)
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Sharing underused and
high-cost resources
While it may be true that the average drill owner
uses the tool for only 12 to 15 minutes in its entire
lifetime, purchasing one is a fairly low-hassle
14
endeavor for most consumers.
It’s simply easier to buy a drill, even if it means leaving it unused
in a closet or garage most of the time, than it is to arrange to
rent one.
This is not true for homes or cars.
Renting an apartment for the weekend or hiring a ride has a much
lower opportunity cost than buying either item. Companies that
can identify products and services that are more troublesome
to purchase outright than they are to rent have the opportunity
to succeed in a collaborative economy.
Uber and Airbnb are successful collaborative commerce companies
because they specialize in resources that are much more difficult
to own than to rent. Having a car or home that sits idle is
economically suboptimal to paying an affordable rate only
when you need transportation or accommodations.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Sharing knowledge and skills
Information is an excellent example of both an
their internal teams with the expertise of independent
underused and a high-cost resource.
professionals to complete large-scale projects quickly
Today’s technology makes access to expertise
and efficiently.
abundant and convenient. For example, in 2007,
Chris Lintott, a researcher and science communicator
Today’s companies can maintain small in-house
at the University of Oxford, invited the public to
teams and rely upon scalable, remote talent only
help him perform scientific analysis of a million
when needed to complete creative projects, such
galaxies; today the result of that initial brainstorm,
Zooniverse, is one of the most popular and successful
as content development, data management and
quality assurance.
citizen science projects in the world.
Similarly, while playing a collaborative online
Closer to home, it will almost always be more efficient
game called Foldit, gamers from around the world
and less costly for a consumer to rent the services
solved a complex protein-folding problem within
of an expert than to become one.
three weeks that had baffled AIDS researchers for
Just as many homeowners are more likely to call a
over a decade.
plumber or a handyman to make home repairs for
And companies are discovering that if they require
them, individuals having technical issues with their
a temporary team to complete a large project, they
laptops can now let an expert remotely access the
can save time and resources by dividing the project
computer to fix the problem.
into multiple small tasks and assigning them to
Finally, for medical needs that require a hands-on
thousands of skilled freelancers.
solution, not a virtual one, there’s Heal, described
These projects are not limited to automated tasks
in a Forbes article as “an app to find doctors or
or application of hard sciences either. With the
nurses who make house calls for a fraction of the
advent of virtual workforce platforms, companies
cost of the ER.” 16
have access to a cost-effective tool for supplementing
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Marketing challenges
Businesses today, and particularly retailers, must redefine the value of their products
in reference to the sharing economy. Capitalism can continue to thrive if this
generation of retailers embraces the new economy and takes the time to adapt to
the values driving it.
When marketing products for sale to end users,
manufacturers and retailers must highlight functionality
COLLABORATIVE COMMERCE COMPANIES
WITH REVENUES OF OVER $1 BILLION 18
while also addressing millennials’ basic values.
Although lower cost may be attractive to millennials,
a higher-priced product that is judged to be green,
timely, useful, versatile and of high quality may be
deemed worth the investment by this new generation
of consumers. 2 Social networks can be harnessed to
help facilitate trust in local and regional businesses
that make quality goods.
A bigger marketing target is the sharing economy,
which will potentially double in 2016. Millions of
micro-entrepreneurs are joining the collaborative
commerce bandwagon, which currently boasts 17
companies with revenues of over a billion dollars.
These visionaries will demand original and groundbreaking advertising campaigns and have the
resources to fund them. 17
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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COLLABORATIVE COMMERCE PROJECTED REVENUE GROWTH BY SECTOR 20
SHARING ECONCOMY
SECTOR
TR ADITIONAL
RENTAL SECTOR
PEER-TO-PEER LENDING
AND CROWFUNDING
EQUIPMENT RENTAL
ONLINE STAFFING
PEER-TO-PEER
ACCOMODATION
CAR SHARING
B&B AND HOSTELS
BOOK RENTAL
CAR RENTAL
DVD RENTAL
MUISC AND VIDEO
STREAMING
2013
2025
A company that can offer underused, high-cost
Although half of millennials state that a poor
goods and services (particularly lodging, automobile
online review of a business would not stop them
use and professional services) in a convenient
from frequenting that business, marketers cannot
package is positioned to capitalize on consumer
downplay the importance of the personal opinions
goodwill toward the collaborative marketplace
of friends and peers on millennials’ consumer
without succumbing to consumer apathy toward
behavior. 19 In fact, positive feedback holds even
its relative inconvenience.
greater weight in the realm of the sharing economy
Most importantly, however, technology has facilitated
– 69 percent of consumers in a recent survey
the broad sharing of information, and strong
stated that they would not trust a collaborative
personal networks and connections have followed.
commerce company unless recommended by
Marketers cannot ignore the fact that this information
someone they trust. 13
sharing among millennials extends to the methods
by which they make purchasing decisions. In fact,
this new spin on “word-of-mouth” endorsement
or criticism has the potential to make or break a
product’s success from a marketing standpoint.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Social media platforms make it easier than ever
to share personal experiences with goods and
services, both positive and negative. With the
Connecting with Consumers in the New Economy 13
•
click of a button or the tap of a finger, a post can
replacements, but as supplements, to your
reach hundreds of thousands – and even millions –
operations; develop new revenue streams “by
of consumers. Particularly if a site is well-traveled
facilitating peer-to-peer or other like-minded
and trusted, the effect of a positive or negative
review may be almost instantaneous.
marketplaces.”
•
It may have been said in the past that there is no
media and their reputations on it, allowing them
Focus marketing messaging on product quality
and consider developing quality maintenance
such thing as bad publicity, but businesses today
must be prepared to consistently monitor social
Consider alternate business models not as
programs for potentially shareable goods.
•
Tap into millennials’ sustainability awareness
by highlighting product longevity and
to both capitalize on the good and engage in
participating in waste-reducing practices.
immediate damage control regarding the bad.
•
Focus on offering consumers experiences in
addition to – or as extensions of – purchases
of material goods.
•
Monitor social media outlets and interact with
consumers in real time.
•
Focus on a seamless purchasing experience,
from initial product introduction through
research and ultimately actual purchase.
CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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Looking forward
In a very impersonal digital age, millennials are getting back to the basics of connecting
with others – albeit largely through the use of technology. They value sharing meaningful
experiences with friends and family and view ownership of material things as financial
and physical obstacles to these experiences.
While collaborative commerce has emerged as a
commerce, finding ways to make the sharing of
natural extension of this shift in values, ultimately
physical products more convenient and affordable
its popularity is not predicated upon a desire to
will be key to broader adoption.
share or to join a community. As with all consumer
On the other hand, there will always be items
behavior, it’s entirely about convenience. Just
that must be owned outright. Businesses can take
because something can be shared doesn’t mean
heart in the fact that America was built on the
it necessarily will be; if the process is not either
concepts of consumerism and ownership, and it’s
easier or more affordable (and preferably both) than
likely to be some time before most Americans
the traditional means of using products and
feel comfortable with the idea of broadly sharing
services, it’s unlikely to replace the status quo.
the items they use on a regular basis.
The typical consumer will push a button for a ride
W hen marketing to millennials, the key is to
because it’s easier than buying a car, visit the
remember that, when they do make purchases, it
emergency room because it’s more convenient
is after careful deliberation – usually after consulting
than scheduling a doctor’s appointment, or order
friends and family – and with a keen eye toward
a power drill from Amazon because it’s more
price, quality, value and sustainability.
convenient than asking around the neighborhood
for one.
For those eager to adapt their business models
to leverage the rising popularity of collaborative
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Sources
1
The end of stuff envy. May 14, 2014, Marian Salzman, Forbes.
12
All eyes on the sharing economy. March 7, 2013, The Economist.
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http://www.economist.com/news/technology-quarterly/21572914-
end-of-stuff-envy/
collaborative-consumption-technology-makes-it-easier-people-
2
rent-items
Millennials becoming ‘minimalists.’ May 2010, Millennial
Marketing.
13
http://www.millennialmarketing.com/2010/05/millennials-
PricewaterhouseCoopers LLP.
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3
consumer-intelligence-series-the-sharing-economy.pdf
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14
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4
dead-and-we-killed-it
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15
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5
16
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6
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17
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18
8
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19
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10
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11
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CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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CO N S U M E R I S M I N T H E M I L L E N N I A L AG E
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