The rental economy is on the rise. Fueled in large part by millennials, the rental economy is thriving and setting the tone for the consumer landscape. Experts predict that this demographic of people born between the years 1982 and 2000 command 30 percent of the retail spending power in the United States.
Who is “Generation Rent?” They’re the millennials driving the rental economy forward. This is the generation that accounts for approximately 64 percent of the population who prefer renting over buying. By and large, they’re struggling with student loan debt, postponing marriage and children, and moving frequently to further their careers and explore their options.
From rental properties to clothing to furniture rental, millennials are increasingly opting for low commitment options from their housing to their retail goods. What are millennials looking for from the rental economy? To better answer that question, it helps to consider how they’re driving the rental economy forward.
Millennials grew up during a period of relative upheaval, including the Great Recession that spanned late 2007 through 2009. As a result, millennials have a very different attitude toward life in general than the generations preceding them. They increasingly prioritize convenience and flexibility, with the desire to maintain a good work/life balance, all qualities that keep many millennials desiring rental properties over home ownership.
Renting supports their desire to stay within their budgets; but even more importantly, it gives them the ability to come and go as they please with minimal commitments tying them down. Recent research shows that around 74 percent of renters are millennials, and one in five expects to rent forever. Millennials’ demands are reshaping rental properties as these influential renters look for rentals that offer the following:
- Location: While many millennials like living in urban centers, others are flocking to the suburbs. In either case, they want to live close to the action, near entertainment options, shopping and amenities.
- Parking: Nobody wants to have to circle the block finding a parking spot, millennials included. Having assigned parking and designated spaces for visitors is a big draw. Pet Friendly Policies: Approximately 37 million millennials own pets, accounting for about 27 percent of all pet owners. They flock to options that are close to parks or have pet amenities on-site like pet washing stations and pet sitting — amenities that are slowly becoming the norm rather than luxury extras.
Rental as the New Retail: The End of Ownership
Rental properties aren’t the only thing popular among millennials. Retail rentals are among the hottest modern trends. Millennials share their homes using AirBNB, they share cars with Lyft and Uber, and they share goods like clothing and furniture with Rent the Runway and CORT Furniture Rental. The generation that’s driving the rental economy thrives with the ability to use goods short-term, making it possible for them to achieve the low-maintenance lifestyle they’re interested in without the costs, headaches and hassles associated with ownership.
Millennials want to stay on trend. As the retail landscape has shifted toward a sharing economy, mainstream retailers like Macy's and Ikea are joining online rental companies like Everset and Gwynnie Bee to offer rental goods for a one time fee or on a subscription basis. Consumer goods rentals garnered around $60 billion in revenue in the United States in 2019. Research suggests that more than 50 percent of all buyers would rent instead of own as long as the items are on-trend. Among millennials, that number goes up to 70 percent.
Sustainability
Quality isn’t just in the type of furniture you get - it’s also reflected in how sustainable that furniture is. While it is possible to purchase sustainable furniture, it’s often more difficult to match the eco-friendly benefits of renting furniture. Furniture rental is, by its very nature, sustainable.
CORT’s practice of buying new, durable furniture manufactured to CORT’s specifications, and renting the pieces several times over creates a sustainable model that’s hard to match. Because the furniture is of the highest quality and regularly maintained, renting it gives you the benefit of top-level, sustainable furniture without the high price tag.
The Case for Flexibility and Temporary Solutions
“Generation Rent” tends to move around frequently — approximately once every one to two years on average, — taking new jobs in new cities and exploring new places to call home. Why buy a sofa that you have to move with you when you can rent one instead and have it delivered and set up for you when you move in?
By and large, millennials rent because they only need items for a short time or they want the flexibility of upgrading or swapping items without the hassles of ownership. Some of the items that millennials are renting most include:
- Homes
- Sporting equipment
- Furniture
- Clothing
- Jewelry
- Tools
- Gaming systems
Renting Experiences: The Renting Revolution
Millennials expect quality and on-trend goods. They also have higher expectations from the customer experience than the generations before them. From their landlords, they’re looking for great communication, with the ability to text and email to converse and express their concerns. They also want flexible rental terms. Month to month and short term options are often attractive, as are options for furnished short-term rentals, which give them the ability to move right in and start living the low-maintenance lives they crave.
Research suggests that they rent to experience a taste of a more lavish lifestyle, save time, test things out before they buy and enjoy convenience. For rental companies, the pressure to deliver seamless, hassle-free
customer experiences is on. That’s one of the areas that companies like CORT excel. From providing move-in ready packages to providing expert design services to providing delivery, setup and pickup for hassle-free experiences that don’t skimp on quality or style.
Supporters of Sustainability
From rental properties to furniture rental, environmental concerns aren’t at the top of the list of reasons to rent, but it does factor in. Across all generations, 66 percent are willing to pay more for sustainable options. That number shoots up to 73 percent when researchers look to millennials only.
And that's another reason why rental is so popular among this generation. It
reduces waste and takes recycling to the next level. Furniture rental is the perfect example. More than nine million tons of furniture end up in landfills each year. But, by renting, that waste is dramatically reduced. In fact,
CORT Furniture Rental gives its rental furnishings new life by discounting and selling about 97 percent of them.
Millennials are driving the rental economy, but all generations are benefiting from the shift. As more companies offer rental options, more individuals can enjoy the freedom of a rental lifestyle. From decor to housewares to the latest on-trend furnishings,
CORT Furniture Rental is leading the rental economy.
