Millennials (adults ages 18 to 35 in 2015) comprise over 30 percent of the labor force in both the United States and Canada. They are doing things differently, hold different values, and have a high affinity for technology. Millennials are expected to drive change from within organizations and have a huge appetite for sustainability.
A recent behavioral economics study from Capital One revealed that Canadians, particularly millennials, favor experiences over ownership – so much so that 85 percent of Canadians would rather have two years of amazing experiences (including travel, concerts and dining out) than upgrade from an affordable car to a luxury vehicle – and that is good news for the sharing economy.
“At the intersection of consumer data, user behaviour, technology and expert opinions, Capital One uncovered a few key learnings about how Canadians' spending is changing within the context of the sharing economy,” the press release reads.
Capital One and a think tank comprised of academics, industry experts and journalists analyzed the research results to determine some of the ways that disruptive technology is impacting consumer spending habits. Among their findings, they identified that:
- A new “minimalist mindset” has emerged;
- Canadians are craving unique experiences;
- The convenience of cashless payments increases product/service adoption; and
- Convenience and transparency may influence how Canadians spend in the future.
The sharing economy is often associated with lower costs, and therefore creates a “bridge” for potential users. 46 percent of millennials would be open to buying a house with friends and living in it together to share the cost. Home-sharing service Airbnb was found to be most popular among those under 30, females, and those earning $50,000-75,000, according to the Capital One study. Canadians are actually spending more per stay with Airbnb than hotels, but the average duration of Airbnb stays is longer. 58 percent of Canadians – and 67 percent of millennials – want to live like a local when travelling.
Digital payments, including through apps, are considered more convenient. 54 percent of Canadians agree that digital payments make it easier to transact and budget monthly expenses, and 70 percent of millennials consider digital or mobile payments are more convenient than using cash.
Canadian millennials are also influenced by other people’s – even strangers’ – opinions. 53 percent of them will go out of their way to check out something they saw many people posting about on social media so they can be in the know, and 63 percent of millennials are more likely to make a purchase from a brand that enables a rating system by customers, as ratings help bring transparency to the transaction.
“It's clear that technologies and companies born out of the sharing economy are disrupting the way Canadians are defining value and interacting with products and brands,” said Jay Acharya, Senior Director of Digital Product Strategy at Capital One. “These interactions are impacting their budgeting habits and spending patterns in the process.”
Similarly, a Goldman Sachs survey from 2013 found that only 15 percent of millennials felt that car ownership is extremely important. 25 percent felt car ownership is important but not a priority, and 25 percent reported that they were indifferent but may purchase one if they really needed it. 30 percent did not intend to purchase one in the near future. In combination, the Capital One and Goldman Sachs results reinforce Ford's and General Motors’ (GM) approaches to the future of mobility: Ford recently announced its FordPass platform, which will provide concierge services, smart parking, car-sharing, and mobile payment; and GM is rolling out an on-demand car-sharing service and “personal mobility” brand called Maven.