Demographics

Generation Rent: How Millennials are Fueling the Rental Economy

Published

3 years ago

October 23, 2019

Katie Jones

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.

Related Topics:Millennials gen z sharing economy rental economy subscription leasing consumer behavior

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Demographics

Charted: The World’s Working Poor, by Country (1991-2021)

This graphic shows the regional breakdown of the world’s working poor, and how this demographic has changed since 1995.

Creator Program

Published

2 days ago

January 24, 2023

Carmen Ang

Charting 3 decades of the world's working poor

Charting Three Decades of the World’s Working Poor

Poverty is often associated with unemployment—however, millions of working people around the world are living in what’s considered to be extreme poverty, or less than $1.90 per day.

Thankfully, the world’s population of poor workers has decreased substantially over the last few decades. But how exactly has it changed since 1991, and where is the majority of the working poor population living today?

This graphic by Gilbert Fontana uses data from the International Labour Organization (ILO) to show the regional breakdown of the world’s working poor, and how this demographic has changed in the last few decades.

From Asia to Africa

In 1991, about 808 million employed people were living in extreme poverty, or nearly 15% of the global population at the time.

As the graphic above shows, a majority of this population lived in Eastern Asia, most notably in China, which was the world’s most populous country until only very recently.

However, thanks to China’s economic reforms, and political reforms like the National “8-7” Poverty Reduction Plan, millions of people in the country were lifted out of poverty.

Today, Sub-Saharan Africa is the region with the world’s highest concentration of working poor. Below, we’ll take a closer look at the region and zoom in on select countries.

Zooming in on Sub-Saharan Africa

As of 2021, 11 of the 49 countries that make up Sub-Saharan Africa had a working poverty rate that made up over half their population.

Here’s a look at these 11 countries, and the percentage of their working population that lives in extreme poverty:

Rank	Country	Working Poverty Rate (% of total population)
1	🇧🇮 Burundi	79%
2	🇲🇬 Madagascar	76%
3	🇨🇩 DR Condo	69%
4	🇲🇼 Malawi	65%
5	🇨🇫 Central African Republic	63%
6	🇬🇼 Guinea-Bissau	61%
7	🇲🇿 Mozambique	61%
8	🇨🇬 Congo	59%
9	🇿🇲 Zambia	56%
10	🇦🇴 Angola	52%
11	🇱🇷 Liberia	51%

Burundi is first on the list, with 79% of its working population living below the poverty line. One reason for this is the country’s struggling economy—Burundi has the lowest GDP per capita of any country in the world.

Because of the economic conditions in the country, many people struggle to meet their basic needs. For instance, it’s estimated that 40% of urban dwellers in Burundi don’t have access to safe drinking water.

But Burundi is not alone, with other countries like Madagascar and the Democratic Republic of the Congo also having more than two-thirds of their working population in extreme poverty. Which countries will be able to able to lift their people out of poverty next?