Forrester: Millennials boost growth of sharing economy
- The millennial generation is driving most of the growth in the sharing economy, which consists of peer-to-peer platforms that provide access to shared goods and services, especially compared with baby boomers who are more cautious about the idea, per Forrester Research findings shared with Mobile Marketer. Millennials overtook boomers as the biggest population group in the U.S. with an estimated 75.4 million people in 2015.
- The sharing economy has plenty of room to grow, as only 27% of U.S. online adults have used a sharing service in the past six months. About one-fifth of those surveyed (21%) use a vehicle-for-hire service like Uber and Zipcar, 9% use room and lodging services like Airbnb and 4% or less use vehicle/bike/goods-sharing and logistics services, per Forrester.
- Millennials have fewer qualms about sharing belongings with others, with 25% saying they don't like to use other people's belongings, compared with 36% of boomers. Millennials have fewer concerns about legal responsibilities in the sharing economy, with 11% saying they worry about liability for damages to shared goods, compared with 16% of boomers.
The millennial generation tends to value experiences more than material goods, a characteristic reflected in using smartphones to share their adventures, diversions and gatherings on social media platforms like Facebook and Instagram. Almost of half of millennials (47%) prefer to spend money on experiences than products, compared with 29% of boomers, Forrester found. That cultural shift means that marketers need to develop strategies that make their products and services more appealing to groups with distinct tastes.
The sharing economy also provides a better customer experience for many millennials. That may be the result of living through the 2008 financial crisis and worst economic slump since the Great Depression, when the concept of ownership could feel fleeting. As Forrester found, 26% of millennials who have used sharing services in the past six months enjoy being able to access services on demand. The global sharing economy is forecast to grow to $335 billion by 2025 from $15 billion in 2014, according to a study by PwC. The services that are most popular among millennials, at least in the U.S., are ride-sharing (47%), lodging (15%) and goods or equipment (7%), Forrester found in a study of 32,000 online adults.
In order for the sharing economy to appeal to older generations like boomers, many of whom have solid spending power and savings built up over a longer lifespan, marketers need to address misconceptions about how the services work, Forrester said. For ride-hailing companies like Uber or Lyft, that means making a greater effort to explain how mobile apps are used to schedule rides and get estimates on how traffic will affect the trip. Boomers are also more concerned about personal safety, which means sharing services need to consider ways to give people better peace of mind.