I thought that the sharing economy was something very generational and that the millennial generation and those younger are interested in participating in. Thumbing through Fast Company online today, I found an article suggesting a different pictures and set out to investigate.
Globally, more than two-thirds of people want to share or rent out personal assets for financial gain, according to a Nielsen survey of Internet-users in 60 countries. Similar numbers want to use products and services from other people.
The Fast Company cited a Nielsen Study that states that 68% of people surveyed around the globe are willing to share or rent personal items including power tools, bicycles, clothing, sports equipment, cars, outdoor camping gear, furniture, homes, motorcycles, and pets. The study found that Millennial Generation and Generation X were the most likely to use the sharing economy globally. Baby Boomers were willing to use the sharing economy at a higher than expected rate. The study found that globally, 7% of Baby Boomers were willing to use the sharing economy for goods and services compared to 42% of the Millennial generation and 17% of Generation X.
What exactly does this mean and why on earth is this important? The markets for start-ups like Uber, Sidecar, Lyft, Airbnb, BlackJet, Neighborrow.com, Taskrabbit, and the like in the sharing economy are larger than I expected. It also means there will be some major changes in consumption that will be a disruptive force to the global economy.
The companies I’ve listed above as well as other companies in the sharing economy may want to look to ways to gain market share from Baby Boomers and Generation X. Marketing to these populations will have to be different from what is being used to attract the Millennial generation to these services (word of mouth primarily). A small, but targeted traditional media campaign using things like billboards, radio ads, and print media ads would go a long way to inform these consumers of their services.
These companies provide services that both of these aging generations need, but they haven’t been told why. For example, both of these generations may have doctors appointments, but don’t have an easy way to get there sometime. Services like Uber and Lyft are both affordable and convenient for these users. The ride-share business has an incredible opportunity to expand into this market as well as create partnerships with hospitals and other medical centers.
Above is just one example of how the sharing economy can develop and position products for aging generations and it barely scratches the surface. For people who enjoy DIY projects, the ability to rent large tools from others in their area rather than a big box store like Home Depot is not only more convenient, but can help develop synergies for those planning a project. If I plan to build a shed and need to borrow a circular saw from someone, they may have some advice I didn’t even think of.
Not everyone is a fan of the sharing economy though. The current regulatory climate for the shared economy could be the doom for these young start-up ventures. The Guardian pulled no punches in their recent article about the sharing economy.
“Insofar as Airbnb is allowing people to evade taxes and regulations, the company is not a net plus to the economy and society – it is simply facilitating a bunch of rip-offs.”
The essential element for success for the sharing economy is to get ahead of regulations. Companies in the shared economy will have to work together and ask to be regulated in ways that are fair and allow their business model to continue to succeed.
Beyond this, the lingering question is how to turn all of this into long-term success. Some point to pre-recession excesses in consumption as a driver of today’s sharing economy. Some suggest that more limited consumption in the future will drag down the ability for the shared economy to succeed.
In the end, I predict that more limited consumption will force drastic changes in manufacturing that will completely change the way we look at goods, services, and ownership. We will own fewer things, but have access to a greater diversity of products and services. The future won’t be about ownership, but access if Millennials have anything to say about it.