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Generation Rent: How Millennials are Fueling the Rental Economy

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It’s long been said that millennials have the power to disrupt and reshape entire industries.

Most recently, this effect has been seen in the retail landscape, where millennial spending habits are setting the tone for the market’s future.

Not only does the millennial generation demand the convenience of making instant purchases—but they can now rent almost anything they want, anytime, and anywhere.

Visualizing the Growth of the Rental Economy

Today’s infographic from Adweek takes a deeper look at the consumer goods rental economy, and the potential long-term impact of this shift in buyer behavior.

Although the current market for rentals is still in its early stages, the sheer momentum that the industry has gained in the last year is enough to threaten even the largest retailers—forcing them to reconsider their own business models.

millennial generation renting

The data for the visualization above comes from market research company Lab 42. In a survey of 500 people, they found that 94% of the U.S. population has participated in the sharing economy in one way or another.

While the sharing economy spotlight typically shines on global behemoths like Airbnb and Uber, the research used to populate this infographic focuses on renting consumer goods for a short period of time, as a sub-segment of the sharing economy.

The Renting Revolution

Offerings within the rental sector have exploded over the last decade, with furniture being the number one category that consumers rent.

According to the infographic, reasons for renting furniture include:

  • Temporary housing: 45%
  • Expensive upfront costs: 43%
  • Testing products before committing: 41%
  • Hosting events at home: 35%
  • Moving into a new home: 29%
  • Redesigning a house: 27%

Other products that consumers rent include gaming systems, clothes, tools, and technology. Female renters are more likely to rent furniture, clothes, and jewelry, while male renters are more likely to rent tools and gaming systems.

Renting goods is predominantly done on an as-needed basis. The Lab 42 report states that for clothing, 77% of respondents indicate that they either rent, or would rent for a formal event.

The End of Ownership?

Despite the common misconception that millennials are driven by emotional needs, the reasons behind why they rent consumer goods are much more pragmatic.

  • Test things before purchasing: 57%
  • Need a temporary solution: 55%
  • Need an item or a service for a short time-frame : 52%
  • Less expensive than buying: 43%
  • More convenient than buying: 42%

Further, only 6% said that they rent because they do not like owning things. This tells us that the rental economy does not indicate the end of ownership, but rather, provides a strategy for consumers to try before they buy.

Attitudes Towards Sustainability

According to the research, very few millennials choose to rent consumer goods because it is better for the environment. However, Nielsen claim that 73% of millennials are willing to pay more money for sustainable offerings—impacting both retail and rental industries.

As evidence of this, Ikea will test a range of subscription-based leasing offers in all 30 of its markets by 2020 in a bid to appeal to environmentally conscious consumers and boost its sustainability credentials. If Ikea’s evolving business model is a success, it could open the floodgates for others to follow suit.

A Promising Market

In the clothing rental space, brands like Rent the Runway pave the way, but there has also been an explosion of startups entering the market in the last year.

One example is the monthly subscription service Nuuly. The company offers consumers access to over 100 third-party brands and vintage items. Consumers can borrow up to six items a month for $88. Similarly, American Eagle’s Style Drop program rents out the latest collections for a flat monthly fee of $49.95.

As more companies incorporate short-term rental services into their offerings, more millennials will shift their behavior from buying to renting—disrupting the traditional retail business model as we know it. With that being said, the impact of millennials having it all, and owning none of it, is yet to be determined.

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Demographics

Visualizing Racial Diversity in America’s 10 Largest States

Here’s how racial diversity breaks down across the 10 largest U.S. states by population—from California to Michigan.

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Visualizing Racial Diversity in America’s 10 Largest States

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Over the last decade, America has become increasingly more diverse as demographic patterns shift across the population.

With over 39 million people, California is not only the most populous state, but one of the most diverse in the country.

This graphic shows the racial diversity of the 10 biggest states by population, based on data from the U.S. Census.

How Diverse Are America’s Most Populous States?

Here is the racial breakdown of the 10 largest U.S. states:

StateWhite (%)Black (%)Asian (%)Other (%)
California5661523
Texas6912514
Florida7216310
New York6215914
Pennsylvania791146
Illinois7014611
Ohio801225
Georgia573247
North Carolina682138
Michigan781436

As the table above shows, California has the highest proportion of Asian Americans across the top 10 states, comprising 15% of the population.

Meanwhile, Georgia’s ethnic makeup includes 32% of Black Americans, the highest across the most populous states. As diversity has risen over the last decade, it has significantly influenced politics at both the state and national level. The state voted Republican for every presidential election from 1996-2016, but flipped blue in 2020.

With 80% of the population being White Americans, Ohio has the highest share across the biggest states. While diversity has increased since 2010, it has been seen mostly in urban and suburban districts while diversity has stagnated in rural areas.

Overall, 24% of rural areas in the U.S. are made up of non-White Americans, rising by a median rate of 3.5% across counties since 2010. While this debunks the myth that “rural” is synonymous with “white”, racial diversity across rural areas falls below the national average of 42% of the population being people of color.

Beyond the top 10 states, ethnic diversity is the highest in Hawaii, Nevada, and Maryland.

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