How The Sharing Economy Impacts The Wants of Customers
December 15, 2016 | Globe Street
Part 1 of 3
According to a recent report, the peer economy continues to grow and their influence is reflected in a new socioeconomic system that relies heavily on sharing resources.
“The sharing economy, sometimes called the peer economy, has had a significant impact on the expectations and wants of consumers. It continues to grow, particularly among the US’ 83 million millennials who have been much covered in the media. Their influence is reflected in a new socioeconomic system that relies heavily on sharing resources.”
Those comments are according to a recent white paper titled: Share and Share Alike, written by DHR International partner Sayres Dudley along with Jaja Jackson, director of global multifamily housing partnerships at Airbnb.
According to the white paper, Uber, Zipcar and Airbnb are services that have developed in response to this mindset. “Buyers are shopping for convenience on a budget, and farsighted sellers are finding ways to profit from this dynamic,” the paper says.
This shift in how consumers shop for goods and services, the paper says, and how they prioritize their purchasing decisions, is being demonstrated in virtually every consumer centric industry, including residential real estate. “In what has been recognized as a dramatic shift in that world, the majority of consumers prefer to rent rather than buy.”
The paper points to a Harvard University’s State of the Nation Housing 2016 study, which shows that the rental market continues to affect housing recovery, with over 36% of US households opting to rent in 2015—the largest share since the 1960s. Indeed, the number of renters increased by 9 million over the past decade, the largest 10-year gain on record. “Rental demand has risen across all age groups, income levels and household types, with large increases among older renters and families with children,” the report says.
Changing patterns aside, the primary wants of both parties, owners and renters, remain the same, the paper explains. “The former wants to maximize rents with a minimum of investment. The latter wants quality, community and convenience at the lowest possible cost. This inherent tension can, and often does, cost money to both parties, especially owners. A departing tenant pays only for his or her move and security deposits at a new home, but the average cost of replacing a tenant is equivalent to three months’ rent—not including the actual rent lost during the vacancy.”
The report says that the owner who is cognizant of, and responsive to, the amenities and benefits that tenants seek, will strive to achieve the balance between residents’ wants and expectations.