Why Are Young Consumers Renting Over Owning?

American consumers — especially millennial ones — are increasingly renting goods and services.

The us consumer market is changing. That’s especially true for millennials who are increasingly renting instead of owning.

And not just with homes.

Brett Northart, President and co-founder of Le Tote, a women’s clothing rental business says their customer base started with millennials who are kind of the typical early adopters but it’s evolved over time.

Le Tote is one of several companies in the billion-dollar clothing space which was expected to grow significantly or the next few years. The company is part of what’s known as the sharing economy where consumer share rent or share goods and services.

It’s not a new concept but it is growing like never before, highlighting a change in the way consumers feel about ownership.

There’s sort of a cultural moment around you minimizing our possessions and attachments which I think is rooted in some really positive introspective, sort of reflections but I think ultimately shifts a lot of power to the company who controls access to those resources that I think we’re all paying for,” says Aaron Perzanowski, author of “The End of Ownership: Personal Property in the Digital Economy.”

Renting is typically been viewed as a cheaper alternative at least in the short term and traditional retailers many of which are where he of the large number of retail store closings are catching on. It was recently announced that Lord and Taylor, America’s oldest department store would be purchased by Le Tote out following a period of declining sales.

The entire landscape really shifted underneath feet of that feet of the traditional retailers and you have a lot of people that grew up in this physical retail world, and they’ve never seen a massive shifter disruption like this.

The evolution of the sharing economy is frequently attributed to advanced technology allowing people to rent a dress or a car or a spare room from their smartphones, but experts say other economic factors are at play too.

“In a time where people have less his disposable income as a result of income and wealth inequality, we have people who are deciding to rely on a temporary access to resources rather than owning those resources outright,” says Perzanowski.