The gig economy is here. What does it mean for you?

By February 20, 2019Blog

I’m a baby boomer. In my generation, you bought a home as quickly as you could, for stability,” said Laurie Goodman, Vice President of the Urban Institute. “And you didn’t take a vacation for years to save for the down payment.”

Would a millennial relate to Laurie’s story? Probably not. Because as a generation, millennials have moved away from ownership. Be it of homes, cars, or even furniture. They are being called ‘NOwners’, says Jamie Gutfreund, CMO of Deep Focus. Access to goods is what’s essential for them, not ownership.

This preference has ushered in a shared or a gig economy, characterized by on-demand access to the things or experiences we desire. It’s access for short periods and can be rented. Once used, the goods are released back into the market. Like rented cars. The conventional need to invest in or own things for stability is now gone. What is driving this movement?

  • Shifting affordability. Baby boomers could afford to buy homes/ cars due to a more stable economy. For millennials, the recession of 2008 was a turning point which amplified debts. But, it also kick-started the trend of products/ services becoming affordable and competitive. New technology-enabled business models were built around sharing assets than owning them – like taxi and clothing rentals.

It also offered the ‘owners’ a way to monetize their belongings. For instance, platforms like Airbnb allow you to rent your home to vacationers. Or GoZefo refurbishes your old furniture, for sale.

  • A need for novelty. Millennials are the most experimental consumers, and have an affinity for products from different cultures. This can be attributed to the exposure that the internet offers. And it is not something the previous generations can claim. Brands now are consistently trying to appease a generation driven by curiosity, a desire for freshness, and an appetite for new.

Novelty also changes our relationship to saving money. Since the pressure to stack up on traditional milestones – like buying our first car or owning a home – is gone, our money is then available for fulfilling other dreams, like travel.

  • Changing values. Given the global, connected lives we live, many people don’t want to be tied down to one job, or one location. There is a need to keep moving at a faster pace. This changes what we want to put our money into. For example, 30-somethings are known to quit jobs with cushy paychecks and start their own businesses. Or the whole trend for renting furniture, clothes and even décor, has an environmental flavor to it. People today want to consume less and recycle more. We want to be less tied down, and certainly want our money to go the same way.

All these factors question our traditional approach, where one saved to buy assets. If earlier, people derived a sense of worth from owning things, the markers for today’s success hinge around building credibility in the market and creating trust, so we can share commodities. It’s a way of life we are pursuing, and people will drive this aspect of our economy. Are you ready to participate in it?

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