Attention Retailers: Ready for the Collaborative Economy?

Cup of SugarIf not, you may be missing out on a big chunk of Gen Y. And it goes well beyond the next-door neighbor who needs a cup of sugar.

I learned something about this population bulge at d2 (digital dialogue) in Cincinnati, thanks to Taylor Wiegert, consumer experiences expert, and trends expert Emily Worstell from Cincinnati-based Powerhouse Factories, who presented thoughts on how to connect with these increasingly multiethnic customers born between 1980 and 2000. And what I heard may or may not surprise you.

The Gen Y generation (aka Millennials) is a young and desired demo, but often hard to reach through conventional tactics. Yet, they are social (Facebook, Etsy and Pinterest all where founded by members of Gen Y).

Some thoughts from the session.

If Gen Y can avoid buying something, they will, because access is all they desire. Now it’s true these folks embraced bricks-and-mortar-busting technology (iPod, iPhone, Napster and Netflix) that made buying CDs and DVDs completely optional. Another reason for postponing purchases is the difficulty they’ve had finding good jobs. Plus, they’ve witnessed parents lose jobs and status, not to mention homes. Their cautious spending bodes well for concepts like Rent the Runway, for instance, which makes it possible to be a fashionista on a budget.

Millenials are more likely to rent a Zipcar or share a ride via Lyft to get around, or to use Airbnb.com to find not only a private home to crash for the evening, but for vacation homes and apartments, potentially doing to the hospitality industry what Craigslist did to newspaper classified advertising. Sharing, and making a little money for the owner (true for Airbnb.com), is all part of the Collaborative Economy. In part, mobile payments and social connectivity have made this emerging economy possible and that’s why they love and need smartphones and tablets, so retailers will need to have Wi-Fi in all locations.

Gen Ys are more likely to be cause connected to a variety of issues, including Made in America, marriage equality or the environment through “casual activism.” Translation: “Likes” rather than cash donations. They also believe brands can make the world a better place.

And that brings us to one luxury brand’s savvy solution. If you’re BMW, you make it possible to rent a Bimmer by the hour. BMW already operates a small car-share program in San Francisco, with a fleet of ActiveE electric 1-series. But that’s not all—the company’s BMW on Demand program launched last month makes the dream of driving a luxury you don’t own a reality.

We can all agree the auto industry has long been but one engine of our economy. Good news for BMW, who makes some cars and car parts in the USA. By 2020, Gen Y consumers will play a key role in driving the global economy, with more than $400 billion in purchasing power in the United States alone. BMW seems to be on the right track by offering a chance to test its cars in a meaningful way. It just could be the sort of roadmap to engender loyalty from this demo on a (fingers crossed?) path to purchase.

What else will these pragmatic customers purchase? I’m guessing experiences will take off, as well as lasting quality goods, including locally sourced and handcrafted foods.

Are you tinkering with your Gen Y plan? Pop the hood and tell us about it in the comment section.

—Janet Groeber

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