Understanding the Millennials
The millennial generation reaches adulthood. Technology connects just about everyone 24/7/365. Society focuses on living for today. The confluence of these events are shifting the economic landscape of the United States from lifestyles of commitment, stability and ownership of past generations to priorities of experiences, convenience, and access.
With millennials becoming the largest segment of the population at roughly 90 million people, it's useful to understand what this generation wants. Businesses that can understand this demographic will be able to better tap into the prime earning and spending years of this generation.
The Millennial Wants Affordability and Convenience
As children, millennials learned that they were special and grew up, in many cases, having most things they wanted. This has lead to a generation that feels entitled to the material things of life without a great deal of work. As a result, the millennial demands both affordability and convenience without sacrificing the number of luxuries available in this country.
Technology has made it possible to drive down costs and increase access for just about everything. In the early days, the internet completely changed the way we access basic information. Gone are the days of spending hours at the library researching topics for a school paper or even paging through a phone book to find a number. Data increased, work decreased.
It has never been easier to shop for just about anything online, regardless of its rarity or manufacturing location. There is no need to drive to multiple brick-and-mortar stores; just search for what you want online, purchase it, and wait for delivery. Probably tomorrow.
Now we can easily share cars, homes, RVs and other big ticket items by connecting with owners online. We are also beginning to see sharing of prime services like medical, consulting and professional services. Video and audio technology will continue to make it easier to share knowledge, instruction and talent for nominal fees.
The Millennial Wants Access, Not Ownership
What are the booming businesses of recent years? Those that provide less expensive access to things that everyone used to own. Ride-sharing companies such as Uber, Zipcar and Lyft drive down the cost of transportation while providing nearly the same level of service as owning a car. Home-sharing companies like Airbnb, HomeAway and VRBO have exploded as more people opt for the space and convenience of using a home in multiple cities without owning one or using hotel services. RVShare and Outdoorsy connect RV owners with those who are looking to share these vacation vehicles for a week or two without the commitment of ownership.
The millennial is not focused on owning expensive items like homes and cars, but instead having access to them wherever and whenever they want them. For Airbnb management, this means a growing opportunity in the vacation rental business.
The Millennial Prefers Renting, Not Buying
Many young people in the millennial generation are focused on today. As a result, they have accumulated large amounts of student debt and, in some cases, other debt. Purchasing a home represents an expensive commitment that many simply do not want. A large number of millennials are living at home and spending their money on adventures and experiences.
As a result, the average age of purchasing a home has increased from age 25 to age 45, leading to a growth in the millennial renter segment of the economy. In upcoming years, more businesses will come up with innovative ways to offer short-term, home-sharing, less expensive options for the millennial renter. Airbnb management may want to consider how to branch out from the typical vacation rental arrangement to tap into the home-sharing market.
In upcoming years, all millennials will reach adulthood and begin their peak earning and spending years. The generation is larger than previous generations in the United States. They will have a powerful impact on this country's economy, and the faster businesses adjust to understanding their desires and coming up with solutions to meet those needs, the more successful they will be.