Report of McKinsey shows that in the period 2014-2016, customers are willing to pay more for experiences, rather than goods and services.
The standard of consumption is moving from material to experience, which leads to unpredictable disturbances in consumers’ lives and ways of reaching customers.
Malcolm Forbes, founder of the magazine Forbes once said, whoever dies with the most assets is the winner. This phrase succinctly described the consumer society of that time: one that placed a heavy emphasis on buying and owning things.
But this is changing. Today, we can have it all without owning anything. A consumer society of rent borrowing is being formed. The cause lies in the need for experiences, rather than material possessions, to increase. In addition, consumers have the ability to get everything they need without having to buy, own or store.
Harris’s survey revealed that 3/4 of Millenials (young people born between 1980 and 1998) prefer to pay for material experiences. Report of McKinsey shows, from 2014 to 2016, customers are willing to pay more for experiences, instead of goods and services. Baby Boomers (born between 1946 and 1964) are expected to live longer and happier than previous generations. However, the happy life of this generation does not mean having everything with purchasing power worth trillions of US dollars, but having beautiful experiences.
Many traditional malls are dying, but malls that integrate retail stores with leisure activities, such as outdoor billiard tables or free fitness classes, are gaining traction. public attention. Shopping malls offering everything from apartments to apartments to indoor roller skating rinks are breaking the record for sales. Urban Land Magazine.
Even coffee is changing. Once merely a drink, coffee has become an opportunity for Starbucks to make a profit. Howard Shultz, former executive chairman of Starbucks, said that companies directly serving consumers can only win in the new environment when businesses become the destination of experiences.
The belief in material possessions is a symbol of fast-growing wealth and success. In fact, many people today believe that matter is secondary.
It is often said that a home is a peaceful home for each person. But now more and more people prefer renting to buying. The number of tenants is increasing. In the 2005-2015 period, the number of tenants in the US increased rapidly, from 9 million to 43 million, outperforming any other decade. The reason is not only because the Millennials have to shoulder the debt of tuition, but also because the preferences of the previous generation, Baby Boomers are changing. The model of fully furnished apartments is also gradually changing. A house is no longer simply a place to store furniture, but rather becomes a platform for entertainment and bringing experiences to the lives of users.
Companies that directly serve consumers can only win in the new environment, when businesses become the destination of experiences.
Another factor to consider is technological advances, helping to give people everything they need without having to buy or store them.
Cars are the second most valuable asset that a person usually buys. But why buy a car when you can travel with Uber, Grab or other online ride-hailing services? We can move anytime, anywhere, without investing in an asset worth hundreds of millions of dong but only works for several hours a day. With technology, we can even call the exact type of vehicle we want. It could be a red convertible for the weekend, or an SUV to catch up with friends to a sporting match. And everything is just a touch away from our fingertips on the screen.
Renting and demand-driven transportation is no longer a new thing in a modern consumer society driven by a rental relationship. But what about less expensive but important things, such as clothes?
Rent-the-Runway is a clothing brand that offers customers the perfect designs to wear on weekends and easily return within a day with just one click. Rent-the-Runway has introduced the Rent-the-Runway Unlimited service pack. For US $ 159 per month, customers can rent up to four design items at a time, including items such as dresses, skirts, jeans, outerwear, tops and accessories. In the interview with the magazine Vogue, Rent-the-Runway co-founder, Jennifer Hyman, said: “I think your closet will soon become obsolete one day, like a landline.”
Another company, Le Tote, also provides a fashion experience for its customers, but through the subscription subscription form. Each month, the company sends a box of clothes to customers. Customers can keep an item they really love, or return it all and change the way they dress next month without ever actually owning the item.
One thing that few people think about but is extremely popular with is that our favorite books, music and movies are now in the cloud of iTunes, Netflix and Amazon. , not on a bookshelf in the house. We can listen to our favorite tunes online from the cloud while cooking with ingredients from the freshly prepared set of food delivered on the kitchen table. Very likely, we are not even the true owner of this table.
Feather, a furniture rental business, offers “free choice of furniture” on its website. Customers can choose from a wide range of interior styles (from standard, generous to premium), and then experience (rent) the style for three months or a year.
Can the consumer society of renting really spread? The answer is not necessarily. However, a significant segment of younger consumers and richer older consumers are choosing to live “get the most, while own the least possible”. What does this mean? The concept of wealth and savings is subject to change. For example, property ownership may lose value beforehand. Why save up to buy a home, when you can have a fully furnished apartment today without worrying about complicated maintenance? And a small house can be much more attractive than a big one, because all your books and music are in the cloud, the clothes are in delivery boxes, you don’t have a car, because That garage became unnecessary.
Millennials, Xs and Baby Boomers are looking for a way to bring about more experiences with less hassle.
If many people choose to live their way out on demand and depend on hiring, one will need an endless stream of cash to make daily, weekly and monthly payments. You will never be able to experience the feeling of relief when a home mortgage is paid in full, when you pay off a car loan or purify a wardrobe. One thing to consider is that when you retire, if you have your own house and other valuable assets, the cost to cover your aging will decrease. Food, furniture and fashion on demand synonymous with the need for greater cash flow. In a hiring society, by the end of life, it’s likely that parents will leave their children with periodic subscribed service packages, instead of a real home.
Millennials, Xs and Baby Boomers are looking for a way to bring about more experiences with less hassle. A market no longer considers material accumulation as the only symbol of success that will challenge the way businesses attract consumers, how the government taxes citizens and how to assess life, because material It is also a measure for everything.
Joseph Coughli – Founder and Director of AgeLab Institute of Technology
* Source: Forbes VIetnam