The sharing economy comes of age

Attitudes towards ownership are changing. This shift brought about the rise of the so-called sharing economy. A 2018 report from McKinsey uncovered the profound effect the coming of age of younger Millennial and Gen Z consumers was having across the board. According to its research, this generational cohort’s preference for access and experience over ownership has had significant effects that have begun to extend across the demographic pyramid.

As this group becomes a more dominant consumer force, so too is its challenge to traditional ownership models. Over the past decade, the sharing economy has profoundly changed the way consumers access and interact with products and services.

For those that aren’t already aware, the sharing economy covers traditional assets made available to access through rental or subscription models as an alternative to outright ownership. The introduction of these new business models has re-shaped several markets, none more so than the mobility sector.

Think back ten years ago. For example, in 2011, if you wanted to get from A to B in London, you had a handful of options. Most people would take a tube or bus. If you were particularly active, a ‘Boris’ bike, perhaps. If you were fancy, a black cab or Addie Lee. Now, however, there are a plethora of ways to make that same trip. Dockless e-bikes (and soon, scooters), ride-hailing, smart-buses, and car club vehicles.

Modal diversification through the introduction of sharing models is revolutionising how we move around. Cost is no longer a significant barrier to entry, and technology is being leveraged to create convenient experiences that adapt to Millennial and Gen Z demands for instant access to on-demand experiences.

So, what are the implications for brands as these behavioural changes take hold?

A defining characteristic of this emergent consumer group is how smart they are. As digital natives, they are adept at accessing data and cross-referencing sources when researching, fact-checking, forming opinions and making purchasing decisions. The implication here is a need for brands targeting those consumers to investigate their value chains and ensure that contributors at every stage are value-aligned and actively working to support the principles you stand by. The risk here is that brands that fail to provide this alignment with suppliers and partners are at risk of being caught out. The consequence of this could lead to falling foul of our new so called ‘cancel culture’.

While younger consumers have strong views on equality, economics and the environment, they are less likely to engage in divisive confrontation, favouring dialogue and collaboration. This desire to work towards positive outcomes creates an opportunity for brands. While value misalignment won’t necessarily lead to low uptake among these young consumers, brands must be ready to engage in co-creating new value systems that benefit them and show a willingness to adapt  and act responsibly.

Finally, emergent consumer demand for personalised goods and services is eroding the consumer tribalism that defined previous decades. Young consumers demand for personalised products and services is driven by a need to express their individual identities through the brands they choose to interact with. Therefore, an essential decision-making process is whether interacting with your brand compromises an element of their identity. Purchase decisions are consequently much more emotive and vital to get right for these consumers, a consideration that should be taken seriously when it comes to campaign messaging and service delivery.

Overall, these characteristics mean that the mobility industry must be transparent and decisive in aligning with and promoting its values. This process must be two-way too. Interaction with customers is crucial to ensure business models can adapt to the young generation’s fluid identities, co-creating value that delivers against the issues they prioritise.

In practical terms, the challenge for mobility brands is in building accessible networks, which leverage technology to help people access opportunity in a sustainable way. Enabling co-creation with those customers in quantifying their impact when engaging with your brand will go towards satisfying their value-led needs and, in turn, help earn their ongoing loyalty and advocacy.