For decades, most retail businesses have prioritised selling products, often in the shortest time frames possible. Even during pure brand-building exercises, it has been hard to resist the temptation of swiftly adding transactional elements.
Among younger buyers – particularly those aged in their teens or twenties – this fundamentally sales-geared approach is falling short. A growing distrust of large businesses, and of lofty marketing messages and hard selling, is pushing these generations away. In response, retailers are re-examining how to engage with them.
Gen Z naturally exhibits scepticism towards cultural shifts machined by large corporations
“Gen Z has come of age in an interconnected yet tumultuous world, inundated with branded content and advertising. They naturally exhibit scepticism towards cultural shifts machined by large corporations. And, instead, they gravitate towards smaller communities where they can connect with like-minded individuals,” explains Matilda Kivelä, senior creative and brand strategist at the technology consultancy Reaktor. “This presents a fresh set of challenges. If brands focus on transactions and overlook the communities and connections that gen Z seek, they risk losing relevance.”
Community evolution
These new realities are driving a significant evolution in retail. While many businesses have already augmented product offerings with services and experiences, they are now having to offer a deeper sense of belonging. Instead of being simple providers of products, brands must now learn to play the role of facilitators, connectors, peers or influencers. In practice, that means building, nurturing and engaging with communities.
Such communities are emerging in a range of online locations. These include social media platforms and digital campfires such as Discord and Reddit, which provide forums for in-depth discussions on niche topics. In a post-pandemic world, brands can also win by facilitating in-person events for communities: influencer-led run clubs or meet-and-greets with social media personalities harness the natural ability of creators and influencers to engage with their audiences on a deeper level.
Successful engagement with these groups demands a strategic understanding of the dynamics at play: passions, motivations, concerns, likes and dislikes of younger consumers. This often presents a steep learning curve.
Learning from fandoms
The most successful retailers in this space examine online fandoms and other highly engaged communities to learn what works and why – and mimic it. “Retailers should look to existing fandoms and decode their inner workings,” Kivelä explains. “Fandoms are rooted in goodwill, culture and community, rarely on transactions. As such, they offer valuable lessons in community-building. Think of Beyoncé’s Beyhive or the friendship bracelets Taylor Swift fans craft for one another. How could brands build such cultures?”
Similarly, retailers can learn from businesses that have started from strong and dedicated communities. Glossier, originally a beauty and skincare blog, took a deep understanding of its audience and created products that answered the community’s real needs. By building digital campfires around the brand – both on Slack and in the brand’s blog’s comment section – it built a cult-like culture well before any product launches.
Many retailers have, though, struggled to make headway in these settings, often partly because they have appeared far too transactional. When they attempt to clinch a sale in these spaces, pushing a product too hard or promoting superficial claims, it risks a backlash.
Meaningful engagement and integrity
Honest and meaningful engagement represents a far better approach. “Brands have to be willing to focus on close-knit and trustworthy community engagement, concentrating on quality interactions,” Kivelä adds. “Younger consumers will increasingly look for brands to cultivate loyalty through actions that extend beyond mere transactions: goodwill, complimentary products and engaging experiences. Confidence must be earned, not bought.”
Younger consumers will increasingly look for brands to cultivate loyalty through actions that extend beyond mere transactions
Key focus areas include moving from an obsession with search engine optimisation and pushing as much product as possible – and towards storytelling and open discussion, characterised by thoughtfulness and transparency. Brands must be prepared to pose challenging questions to themselves publicly and ask for feedback at regular intervals. They must listen and learn from the communities they are looking to reach.
“It’s essentially a classic brand-building and marketing exercise but for a new demographic, with heightened demands for authenticity and self-development. Retailers should reflect on what they can offer beyond their core products, and if their brand ethos is robust and credible enough to resonate with communities,” Kivelä explains. “Building an authentic connection with audiences goes beyond the product; it’s about creating a compelling narrative that aligns with community values and aspirations.”
Community development in practice
As well as taking the time to study the groups they want to reach, where they might find them, what they value and how they communicate, brands need to ask themselves the difficult questions about what kind of role they intend to play within those communities. Will they take on the role of a facilitator, connector, peer or influencer? They can then act methodically to build or grow tightly knit, socially engaged, passionate communities that correlate with their fundamental ethos. On an ongoing basis, they must be highly willing to adapt from the engagements and develop their own culture accordingly.
“Tightly knit communities are a highly valuable currency that brands can use to develop loyalty and subsequently bypass consumers’ inherent distrust for commercialism. Ultimately, communities can tie consumers to brands in an emotional way,” Kivelä notes.
Multiple retail brands globally – from Adidas to Tommy Hilfiger – are already collaborating with Reaktor to drive loyalty in new ways. Reaktor’s work ranges from branding to digitisation and building next-generation customer-focused digital services and products. It helps retailers establish and manage communities with a variety of tailor-made tools – prioritising meaningful, authentic interactions that are backed with honest communication and memorable storytelling.
Looking ahead, Kivelä expects retailers will face ever greater demands from younger consumers. “To remain relevant in this shifting landscape, retailers must understand how these emerging consumers engage with the world. Brands must go beyond viewing consumers merely as customers and instead, recognise them as individuals with aspirations and emotional desires – and to be on the lookout for emerging fandoms, niche communities and developing undercurrents to understand what’s next.”
To find out about building loyalty through effective community engagement, visit reaktor.com
