Innovation has become the yardstick by which we measure the change to our lives in the twenty first century. Nearly every aspect of our collective being has been transformed by technology in some way, from the way we communicate, learn from and experience the world around us, to the way we integrate and engage with the technology that allows us to do so. Most of this change exists to facilitate our lives in a manner that sees us benefit from it. Other changes have occurred as an adaptation to circumstance, to the novel and significant problems that affect us all.
A fluctuating and vulnerable global economy, a tentative and transforming climate and the sobering realization of the depletion of some finite resources in the coming decades have begun to transform the consumer landscape(.) This creates a shift away from the established purchasing patterns of yesteryear and into more resourceful, sustainability centered consumer attitudes. The illusory premise of exponential economic growth is beginning to emerge for the unrealistic, non-sustainable and outdated growth model that it is. These realizations, along with the inevitable shifts in external circumstances are changing long-held consumer value structures and evidently, are being reflected in the way people spend.
According to a recent Nielsen global online study of more than 30 000 consumers across 60 countries, sustainability is now a major driver in the purchasing preferences of people, with 66% prepared to pay more for a product/service that came from sustainably focused brands. The report also revealed that the top 5 drivers of growth are now largely sustainably focused; being brand trustworthiness, health benefits, organically and naturally sourced ingredients, environmental friendliness as well as the social values of the brand. In a curious revelation, the report also revealed that brands that actively demonstrated commitment to these values generally outperformed those that didn’t.
These changes were reported across all demographics, but most notably amongst Millenials (with 73% reporting a willingness to pay more for sustainably minded products). Whilst this may not come as a huge surprise, the implications for this certainly are when you consider what this change in consumer choices means for the economy. This recent Goldman Sachs report about Millenials identifies the generation as not only the largest consumer market at the moment, but also the largest consumer market to have ever existed! As the generation has yet to reach even half of their life expectancy, this will clearly have enduring implications for businesses all over the globe as they only continue to dominate the consumer environment. This is where genuine innovation comes into play. As Millenials have begun to demonstrate that they don’t necessarily value owning products anymore, this opens up entirely new ways of doing things.
Previous traditional commerce practices create a plethora of waste from un-recycled materials via goods becoming depreciated or altogether superseded by better performing technologies. The demand for innovation will always exist (and should, as it drives economic growth and prosperity); however, many of these displaced products are typically discarded and end up in landfill. A focus on access compared with ownership is dually beneficial to the economy and environment in that it continues to drive growth and consumption, whilst reducing the demand to use more materials to meet that growth. In addition to this, by utilizing new and engaging consumer platforms like 2ndLease, people are able to commodify their under-utilized goods so that more items are able to re-enter the economy. Further future incentives to be put into place (such as standardized recycling outlets where goods can be stripped of raw materials and refabricated) would ensure that in time, even more sustainable business practices are able to flourish. As Millenials are fated to inherit the consequences of the decisions of previous generations, it is increasingly likely that these emerging business models will be cemented into mainstream usage. Until we are able to transition alongside completely sustainable practices, sharing remains among the best options we have.