The Millennial generation has shunned the lifestyle ideals once followed by their parents. The majority no longer rush to get married or consider owning a house and car an urgent necessity. As Millennials come of age, homeownership has shrunk to its lowest levels in 19 years according to the US Census Bureau. What’s causing this generation to veer away from buying their own home? Their economic standing. Millennials have been hit hard by student debt, with a collective $1 trillion in outstanding loans. A recent Freddie Mac survey showed that 70% of Millennials felt renting was the more affordable option – explaining their hesitance in signing on the dotted line for a mortgage.
Another key factor in Millennials’ preference to rent is their ever changing lifestyle and interests. Millennials enjoy trying new things and live in thriving urban areas. Not only is there so much more to do and see, but with condominium complexes equipped with attractive amenities such as fitness centres, saunas, theatres and game rooms – who can blame them for seeing this as an attractive alternative. Living among other young and active people also an appealing factor for renting in a skyrise over a house in the suburbs as it provides a sense of community, feeding the Millennial need to relate and connect.
The desire to rent does not only apply to homeownership; Uber boasts over 8 million users that are able to get an affordable ride around town, significantly more affordable than taking a taxi or even owning a car. Added features such as Uber Eats, Uber Pool, Driver Reviews and overall friendlier service are what make the experience all the more pleasant. A 7% decrease in car ownership over the past four years, suggests that Millennials don’t necessarily need a car to maintain their independence either. This could be another cost saving method as car payments can be a long-term obligation that some would prefer putting off as long s possible.
The fashion industry is no stranger to the rental landscape either. Services such as Rent the Runway allows users to wear expensive clothing for a limited time, offering an affordable way to strut new designer pieces on a dime. Patagonia has taken a slightly different approach, creating their own platform where customers can resell their used clothing and equipment. The outdoor retailer has noticed a 16% boost in sales through the peer-to-peer sales system. While this platform does not necessarily fit the renting model, it’s certainly a more cost-efficient alternative.
Other high priced retailers should take note of the brand awareness and profit these types of strategies can bring. While Millennials are always interested in what’s new, money is still a concern for them. The brands that are sensitive to this and position themselves to better align with the Millennial lifestyle will be all the more likely to succeed. Not to mention, renting a Prada bag or Rolex every other week is definitely an idea we can get behind.