Having It All, But Owning None Of It: Welcome To The Rentership Society
He (or she) who dies with the most toys wins. Or so the bumper sticker expression goes. The catchphrase, credited to Malcolm Forbes (founder of this publication), succinctly describes our consumer society—a society that places great value on buying and owning stuff.
But the story of keeping score by accumulating stuff is changing. Our desire for experiences over things combined with the ability to get what we want on-demand without buying it, owning it, or keeping it in our garages, closets, or bookshelves is contributing to a Rentership Society. A world of consumption where we can have it all, but own none of it.
A Harris survey revealed that three out of four Millennials would rather spend money on experiences than things. McKinsey reports that from 2014 to 2016, consumer purchases of experiences greatly outpaced consumption of goods or services. And, as I observe in my book The Longevity Economy, Baby Boomers are set to live longer, better but better does not necessarily mean by collecting stuff with trillions of dollars in buying power, but rather by making memories. These statistics are informative, but a quick look at how successful businesses are engaging consumers across the generations with dopamine-driven experiences may be more telling.
Many malls may be dying, but lifestyle centers that mix retail with outdoor pool tables, cornhole or even free group exercise classes are driving foot traffic. Malls that offer everything from apartment living to indoor skating are not suffering; as reported recently in Urban Land Magazine, they are “breaking revenue records.”
Even coffee has been transformed – it was once a beverage, but Starbucks turned it into an occasion. Former executive chairman of Starbucks Howard Shultz observed that consumer-facing companies that are “going to win in this new environment must become an experiential destination.”
Even “real things,” once our common symbols of wealth and achievement, are becoming as transient as an experience. In fact, the emerging normal may be thought of as stuff-as-service.
It’s said that your home is your castle. Well, apparently more and more of us would prefer to rent our castles than own them. Rentership is on the rise. In fact, the number of renters in the United States grew faster between 2005 and 2015—from 9 million to 43 million families—more than any other 10-year period. And this is not just about Millennials getting squeezed by student loans; the trend toward renting is picking up among more affluent downsizing Baby Boomers, too. Apartments with amenity-rich living such as roof decks, pools, close proximity to attractions and restaurants, and even ‘woof decks’ for one’s furbabies to play are transforming home from a place where you kept your stuff to a platform of entertainment and experiential living.
It is more than the desire for experience or entertainment that is shaping the rentership society. Technology is enabling everything to be on-demand without having to buy it, let alone keep it.
The automobile is traditionally the second-largest purchase a person will make. But why buy and own when you can have mobility on-demand? Uber, Lyft, and Zipcar are just a few examples of transportation when you want it, where you want it, without investing in a two-thousand-pound asset that sits idle most hours of the day. Moreover, you can order exactly what you want—a red convertible for the weekend? Done. A SUV to cart friends to see the big game? It’s only a tap away.
Renting homes and mobility on demand are already old news in the fast-evolving rentership society. Those are big assets, but what about less costly yet ever-so-important purchases—such as your clothes?
Rent-the-Runway is just one example where having that perfect designer label to wear this weekend is a mere click away, and just as easily sent back as soon as the weekend becomes a memory. In an interview with Vogue, Rent-the-Runway cofounder Jennifer Hyman said “I think your closet is going to be as obsolete as a landline phone one day.” That future may be nearer than we think.
Companies such as Le Tote offer clothing by subscription, making getting dressed its own transitory experience. A box of clothes is sent to you each month; you can keep an item you really like, or send it all back and change up your look next month, never really owning the clothes on your back or the shoes on your feet.
It’s now so commonplace that few people think about it, but your favorite books, music, and movies are now in the cloud and not on your apartment shelf, courtesy of household names such as iTunes, Netflix and Amazon. While you stream your favorite tunes from the cloud, you may be cooking up a meal from the just-delivered recipe kit that promises something new and different each day. But wait: you don’t even own the table you’re prepping on.
Online furniture rental company Feather offers customers “furniture freedom” on their website, enabling choices from a range of styles from Standard, Hip to Premium, allowing the consumer to experience (rent) their style choice for three or 12 months at a time.
Is the rentership society or life on demand truly widespread? Not quite yet. However, a significant segment of younger consumers and more affluent older consumers are choosing to have as much as they can while owning as little as possible. What are the possible implications?
The very idea of wealth and saving may be changing. For example, ownership of real property may be losing its perceived value. Why save for your castle when you can have an amenity-rich home today, without the hassle of maintenance? Moreover, a small home might be far more appealing than a large one—after all, your books and music are in the cloud, your clothes arrive by box and you are car-free and therefore garage free.
If more of us adopt a rentership on-demand lifestyle, we will need an endless stream of cash to make daily, weekly and monthly payments—never to have a mortgage-burning, car-payment-ending or favorite-outfit-retiring experience. Speaking of retirement, the assumption that many have about owning their home and other large assets over a lifetime, thereby reducing their expenses in older age, may have to be fundamentally rethought. Food, furniture and fashion on-demand is likely to mean a far greater need for cash flow. Ultimately, parents might will a subscription rather than a family home to their adult children.
Millennials, X’ers and Boomers are seeking lives full of experience with less hassle. A marketplace that no longer views the accumulation of things alone as a symbol of success will challenge how business engages consumers, how the government taxes its citizens, and how we might keep score of our lives, if we are not surrounded by toys we can count.