The combination of new technologies with millennials is changing the way for retailers. Airbnb, Uber, Postmates, and other peer to peer platforms are quickly growing, giving us more freedom in the way we live, work, and play. With our growing dependence on the internet, the sharing economy isn’t going anywhere anytime soon.
73 percent of millennials make purchases directly on their smartphones.
According to BazaarVoice, 73 percent of millennials report making purchases directly on their smartphones, and if brands want to keep up with the times, then they will need to adopt some of these shopping habits into their current business models.
The sharing economy is based upon sharing assets or services between individuals through the internet. The appeal of this economic model is being thrifty and potentially making a living off of these platforms in unconventional ways.
Millennials came of age during the stock market crash of 2008, where many older generations who worked for 20+ years lost everything. In the following years, millennials have had a harder time finding jobs and student loan costs are rising. This recession led many to value experiences over material possessions. This also led millennials to become frugal and creative in how they save and spend their money.
Enter the sharing economy.
The model provides access to many different goods and services over ownership. Millennials are putting off purchasing and renting whenever they can. There are also benefits to this, as it reduces waste, encourages pieces to be made with quality for reselling or sharing, and it allows one to experience more variety without the commitment.
Millennials came of age during the stock market crash of 2008...this led millennials to become frugal and creative in how they save and spend their money.
If retail wants to keep up with the fast-growing sharing economy and online shopping, retailers need to provide a unique experience for this demographic. Goldman Sachs’ study shows that millennials are the largest demographic with the largest purchasing power. They go to social media and the internet to get recommendations on what to purchase, and retailers need to be right in front of them as they’re scrolling.
For traditional retail brands to continue succeeding in this digital age, they are going to have to do at least one of 3 things:
- Adapt with some sort of rental or subscription service. Brands such as Sephora and Target already have subscription services that allow customers to receive samples and sneak previews on beauty products. Not only does this feed the millennial desire for variety, but it also brings in recurring revenue for brands.
- Be more sustainable and eco-friendly. Now more than ever, we are conscious about our environment and our general well-being. Millennials want to know that the products they are purchasing aren’t poisoning them or their environment.
- If possible, partner with one of the peer-to-peer platforms and do cross promotion. TaskRabbit, the marketplace for freelance handy work, has already partnered with retailers such as Gap and Ikea. Both partnerships provided incentives and services for users when they purchased at the retailer in person. When retailers partner with peer-to-peer platforms, they maintain relevance with the millennial generation and even open up their audience to them through people who already frequent these apps. Strategic partnerships with platforms such as Uber and Airbnb could positively affect a retailer on a global scale.
This new generation of adult millennials craves experiences and engaged communities. As architects, creating a unique experience for retail is key when developing and implementing a design. If retailers can provide experiences that create trust and an engaged community, then they will have loyal customers for life in the millennial generation. The sharing economy is only going to grow and transform as more than half of young adults purchase products online, with that number growing rapidly each year. The top retail brands that incorporate this shared experience into their business model will grow and flourish above the rest.
The future of retail is now.