Previously I was chatting over sushi with my father-in-law, he mentioned he was listening to Rush Limbaugh on the radio. Limbaugh was talking about how millennials value experiences over ownership of goods. I thought it was compelling to hear that these new realities had spread so far and wide they made it to AM radio. There are many ways this new reality has played out in modern life. The sharing economy is booming. People are renting or borrowing products. They are hiring their neighbors to drive them to work, paint their house or rearrange their closet.
Alongside this decreased desire to own things or buy them through traditional channels, the events industry is booming. This study conducted by Harris and sponsored by Eventbrite said:
..this generation not only highly values experiences, but they are increasingly spending time and money on them: from concerts and social events to athletic pursuits, to cultural experiences and events of all kinds. For this group, happiness isn’t as focused on possessions or career status. Living a meaningful, happy life is about creating, sharing and capturing memories earned through experiences that span the spectrum of life’s opportunities.
Did you know that since 1987 the share of consumer spending on live experiences and events relative to total U.S. consumer spending increased 70%? So why have spending habits changed so much in the last few years? What paved the way for an experience economy? Why don’t people want to own things anymore?
I vividly remember the crash of 2008. I was living in midtown Manhattan and I clearly remember how empty the city felt. No one was eating out. The happy hour crowd was unhappy. There was an eerie quiet in the city. Wallets were closed. Many people lost their life savings. Many people were kicked out of their houses. Today you still see too many older people working as cashiers because they just can’t afford to retire. How devastating. You work your whole life and in a minute the world crashes around you; your savings destroyed. Millennials like me were watching. We haven’t forgotten.
That said, being a “NOwner” looks attractive to many millennials who don’t want to suffer like their parents and grandparents did. They value access over ownership.
On a related note, enter the idealistic “sharing economy.” Reduced waste, authentic experiences and convenience are some of the many benefits of the sharing economy. Millennials—born between 1980 and 1992 to 2000 (depending on who you ask)—value experiences over goods and there’s a lot of good data that support this.
More than three in four millennials (78%) would choose to spend money on an experience or event over buying something desirable (Harris study). Millennials want to spend their money being with others. Sixty-nine percent of respondents said they believe attending live experiences helps them connect better with their friends, their community and people around the world. Eighty-three percent of respondants said they participated in a “live event” in the past year and 72% said they’d like to improve their expenditures on experiences in the coming year.
Have you seen the documentary Tiny House? People all over the world are building their own miniature houses (on wheels!). They’re trading in the burden of a mortgage and clutter for the simplicity of less square footage and the freedom from owing your life to a bank. It’s the maker space meeting the real estate bubble. Millennials are not only avoiding a home purchase they’re changing their everyday buying habits as well.
Just think about how the music industry has evolved. Millennials don’t want to pay for music–as we established earlier they’d rather spend their money on live concerts.
One Fast Company article “Why Millennials Don’t Want To Buy Stuff” explains it well by looking at how the end of “scarcity” changes our urge to own.
Even in this strange new world, the economic laws of scarcity apply, and they are precisely what’s shifting. To “own something” in the traditional sense is becoming less important, because what’s scarce has changed. Ownership just isn’t hard anymore. We can now find and own practically anything we want, at any time, through the unending flea market of the Internet. Because of this, the balance between supply and demand has been altered, and the value has moved elsewhere.
Writer Josh Dykstra of Fast Company also points out,
Today, a product or service is powerful because of how it connects people to something—or someone—else. It has impact because we can do something worthwhile with it, tell others about it, or have it say something about us.
He ties it to three clear motivators for why millennials buy. The reasons are what they can do with the product, what they can tell others about the product or what having that product says about them.
Millennials also care deeply about the well-being of the planet. Millennials are sensitive to the fact that many products and services are made overseas, and aren’t 100% confident that these products were made by people who were treated fairly. John Oliver made a video about the price of fast fashion. He says “trendy clothing is cheaper than ever, and cheap clothing is trendier than ever.” Clothing from H&M can go from a sketch to the rack in three weeks.
Shopping with a conscience, buying less and buying good quality is what people my age (30s) are interested in. Possibly because this generation is starting to have children, and they wonder what kind of world they will be leaving to their children.
In sum the sharing economy, the experience economy and choosing not to buy at all are some trends that won’t be going anywhere anytime soon.
Blake Morgan is a customer experience futurist, author of More Is More, and keynote speaker. Sign up for her weekly newsletter here. Go farther and create knock your socks-off customer experiences in your organization by enrolling in her new Customer Experience School.