Generation Rent: How Millennials are Fueling the Rental Economy
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Demographics

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

Charted: The Working Hours of Americans at Different Income Levels

This graphic shows the average working hours between higher and lower-income groups in America, based on income percentile.

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Average working hours in America

The Actual Working Hours of Different Income Levels

Do you really need to work 100-hour weeks for success?

In 2021, America’s top 10% of income earners made at least $129,181 a year—more than double the average individual income across the country.

When looking at differences between income groups, there are many preconceived notions about the work involved. But what are the actual average working hours for different income groups?

This graphic by Ruben Berge Mathisen uses the latest U.S. Census data to show the average working hours of Americans at different income levels.

Comparing Average Work Weeks

The data used for this graphic comes from the U.S. Census Bureau’s May 2022 Current Population Survey, which surveys more than 8,000 Americans from various socioeconomic backgrounds.

Importantly, the data reflects the average work hours that respondents in each income percentile “actually” work each week, and not what’s on their contract. This also includes overtime, other jobs, or side gigs.

According to the survey data, America’s top 10% income percentile works 4.4 hours more each week than those in the bottom 10%. And in surveys across other countries, though with hundreds of respondents instead of thousands, the discrepancy was similar:

While both income and wealth gaps are generally widening globally, it’s interesting to see that higher earners aren’t necessarily working more hours to achieve their increasingly larger salaries.

In fact, the top 10% in the 27 countries shown in the graphic are actually working around 1 hour less each week than the bottom 10%, at least among full-time workers.

Zooming Out: Average Working Hours per Country

Similarities arise when comparing average working hours across different countries. For starters, people living in poorer countries typically work longer hours.

According to Our World in Data, the average worker in Cambodia works about 9.4 hours a day, while in Switzerland, people work an average of 6 hours a day.

While many factors contribute to this discrepancy in working hours, one large factor cited is tech innovation, or things like physical machines, processes, and systems that make work more efficient and productive. This allows wealthier countries (and industries) to increase their output without putting in as many hours.

For example, from 1948 to 2011, farm production per hour in the U.S. became 16x more productive, thanks to innovations like improved machinery, better fertilizers, and more efficient land management systems.

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Demographics

Visualizing The European Union’s Aging Population by 2100

The EU’s population is aging rapidly. By 2100, more than 30% of the region’s population is expected to be 65 or older.

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EUs population by 2100

The EU’s Population by 2100

View a higher resolution version of this map.

Many countries and regions are expected to see rapidly aging demographics, and the EU is a notable example. By the end of the century, more than 30% of the region’s population is expected to be 65 or older.

This graphic by Gilbert Fontana uses data from Eurostat to show how the EU’s population is projected to change by 2100. In the article below, we explain how this shift could have a dire impact on the region’s economic growth.

Dependency Ratio from 2021 to 2100

The graphic highlights the old-age dependency ratio, which measures the ratio of people 65 and above, and generally retired or needing supplemental income, compared to the number of people that are working age (15-64).

In 2021, the EU’s dependency ratio was 32. This meant that for every 100 working-age people, there were 32 elderly people. By 2100, this ratio is expected to increase to 57.

But what’s the real-life impact of this?

The Impact of the EU’s Aging Population

Typically, the retirement age population is not working and relies on pensions to support themselves financially. Therefore, the bigger the elderly population, the more pressure put on a country’s social safety net.

AgeEU Population (2021)EU Population (2100)% Change
<1-1048,495,07542,216,181-12.9%
11-2046,931,54340,137,280-14.5%
21-3050,884,15043,247,514-15.0%
31-4058,431,63845,628,731-21.9%
41-5062,846,62347,136,614-25.0%
51-6063,798,23048,320,559-24.3%
61-7054,466,48447,430,312-12.9%
71-8038,414,11145,671,19218.9%
81-9020,326,43139,411,66293.9%
91-100+3,658,15416,874,396361.3%

As the population ages, taxes may rise to help cover those inflating costs. And a decrease in a region’s working-age population can also have a significant impact on innovation and experience in the overall workforce.

For example, Japan’s population is also aging rapidly. According to the IMF, this could slow down the country’s annual GDP growth by 1 percentage point in the next 30 years.

Main Causes of An Aging Population

Japan and the EU aren’t the only places in the world that are seeing their population get older—the entire global population is aging.

According to the World Health Organization, one in six people worldwide will be 60 years old or older by 2030. This is happening for two main reasons:

To help mitigate the risks that come from aging populations, governments need to ensure their pension systems are adequate and adjusted to account for increasing life expectancies and growing elderly populations.

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