Updated: Mar 9
Even before COVID-19, the retail industry was undergoing a structural transformation. The expansion of digital platforms like Amazon into vertical ecosystems, gradually reduced the power of brands, leading to a decline in consumer loyalty. The current crisis has accelerated the need for both brands and retailers to strategically review their relationship with consumers and invest in fostering a sense of brand membership across all aspects of the consumer experience. If brands fail to do this, they can anticipate failure in a post COVID world. Outlined below are 5 ways (of cumulative effectivity) to harness the power of consumer tribes.
Engage the community in a relevant and authentic manner; walk the talk.
Provide a visceral experience of the brand beyond product.
Add value with cross-industry partnerships that solve complex problems.
Leverage technology to delight members and promote membership.
Make quick, bold moves to enjoy a higher rate of success.
Engage the community
A simple, consistent and authentic narrative that is purposeful and relevant to your target audience is imperative. Treating customers as like-minded enthusiasts by allowing them to participate in your brand’s culture beyond shopping is a good way to develop the relationship further.
A good example of a brand which has successfully activated this within their business is Recreational Equipment, Inc. (REI). Their brand belief that, “a life outdoors is a life well-lived” drives REI’s communications and wider offering. REI engages their community through online advice, organised global tourism and low-key local activities. Their membership terms are relevant to the audience’s lifestyle and incredibly simple — easy to comprehend, remember and pass on.
Provide a visceral experience
Physical space allows a brand to translate itself into a controlled and consistent IRL experience. Not all retailers require physical locations, although evidence suggests that even digitally-native brands experience substantial online sale growth in cities where they open brick and mortar sites.
Physical presence can be a permanent or temporary store, or a mobile unit, travelling to where members naturally congregate, for example — for a sports brand — a local park or a beach. What matters is that, in a time when consumers can purchase most things anytime, anywhere — physical presence invites them to experience the brand beyond product and recruit fans who would enthusiastically spread the brand’s cultural pollen across the digital plains.
The passionate staff, the on-site services and events that may be hosted, the visceral feeling of being part of a community — only available in a physical space — make shoppers aspire to become members.
Add value with cross-industry partnerships
As traditional industry borders are dissolving, companies would be wise to frequently check their target audience’s environment for unexpected competitors to be the first to react to new developments. Today, organic vegetable stalls compete with Amazon, cinemas compete with Deliveroo and fashion retailers compete with art projects. The trend of digital ecosystems, seamlessly solving complex tasks across industries is not something reserved for global giants — smaller businesses can partner up to provide a wider offering.
For example, a restaurant could team up with a babysitting service and an event organiser to offer a complete and exclusive evening-out package. This would allow financially comfortable, but time-poor parents to leave their children in safe hands, and go out for a meal, followed by an underground members-only event. Such partnerships would create more customers for all participants as “going out” becomes a viable and more exciting option for more people more often.
Leverage technology for customer delight
Beyond the efficiency of omnichannel retail, technology can be used in novel ways to reward members with access to exclusive experiences and products. For example, instead of volume discounts or one-off events, reserved for the 1%, brands could creatively leverage the growing popularity of augmented reality, and offer fans loot boxes, only visible to certain members when examining the physical store environment through mobile AR lens.
Creating a new, exclusive, retail channel in the process, such loot boxes could contain special items, creating scarcity and promoting the brand (and membership privileges) in a playful and exciting manner. The feature could be available to members as rewards for creative participation in the brand’s culture.
Move Boldly to Build Resilience
A few years ago, analysing the world’s largest corporations, McKinsey came to the conclusion that the top 20% of companies capture 90% of economic profit. The bottom 20% suffer heavy losses and the 60% in between are scraping by. They also found that the revenue growth of those, making first bold moves is almost twice that of their average competitors, concluding that, in modern commerce, speed and courage pave the only path to success.
The effects of the current health crisis on businesses, consumer behaviour and, perhaps, even the social and economic fabric of our society are impossible to predict. Taking confident, strategic steps towards cultivating authentic communities of like-minded members may not solve short-term financial challenges, but it would make companies more resilient. Engaged consumers are more loyal because brands’ continuous existence offers them practical benefits and emotional rewards including being part of the tribe. Finally, something Amazon will struggle to recreate.