Community & the future of commerce
Since the days of dial-up, the internet has given us a chance to discover and connect with communities of people who share our interests, anywhere in the world, no matter how niche. Through chat (or chat rooms), email, and a multitude of social media platforms and digital forums, the internet has changed the way we interact with each other, the way we express ourselves, and the way we behave as consumers.
While technology has given us more opportunities to connect than ever before, broad social networks such as Facebook, LinkedIn, and Reddit, which try to be “everything to everyone,” are becoming less relevant. The internet is “unbundling.” Individuals are seeking deeper, more meaningful connections in niche spaces focused on shared interests and values.
The unbundling of Craigslist and LinkedIn have already been documented, and in “The Guide to Unbundling Reddit,” Greg Isenberg presents Reddit as the latest victim. We’re also seeing the increased popularity of Discord, Facebook’s renewed focus on Groups, and more recently the rise of the Stepchickens cult on TikTok as clear examples of how niche communities enable their members to form or strengthen genuine relationships and find refuge in their digital tribes.
But how do brands connect with their consumers in this new community-centric world? With potential customers gathered in smaller and smaller corners of the internet, the megaphone of traditional advertising is inefficient at best.
When we started AspireIQ, we aimed to create a platform to empower the emerging online creator community: from home chefs to beauty gurus, and everyone in-between to connect with the brands they love and make a living by doing what they do best. At the time, “influencers” were just regular people with a knack for creating engaging content and garnering attention from people and brands alike.
From day one, we’ve believed a person’s voice would be amplified by their passion, not their follower count, and that ordinary individuals had more power than ever to amplify, and influence, the brands they cared about. Innovative brands began successfully tapping into these individuals to power their entire marketing engine, with influencers becoming their own people-powered media channels.
But, traditional influencer marketing was just the first phase in a continued democratization of cultural authority and decentralization of digital attention.
Redefining who is influential to a brand
The influencer marketing industry is projected to reach $15bn by 2022 (10x growth from 2016), with the technology to support it becoming a key piece of every consumer brand’s tech stack.
As the first software company to build a complete solution for digital influencers and brands, we’ve witnessed the industry evolve from its earliest days. The growth of visual platforms and mobile content consumption have created opportunities for anyone to express themselves and connect with their own unique audience, large or small.
Now that brands are beginning to realize that anyone can be influential, consumers will have more power than ever. Forward-thinking brands are tapping their communities for growth, retention and feedback, among many other things. 70.4% of brands we surveyed already have an active community and 92.3% report that community has positively impacted their brand, but the community-based commerce revolution is just getting started.
Commerce demands community
Investing in community can dramatically impact a company’s bottom line through improved retention, higher product quality, and more sustainable growth.
Glossier, a pioneer in community based commerce, has built one of the most popular brands in the beauty industry by taking a community-first approach. What began as a beauty blog with a loyal community, became a CPG brand built in partnership with loyal customers, makeup artists, ‘reps’, and employees, who continue to advocate for and collaborate with Glossier to this day.
Given that Glossier started as a blog and online forum, fostering an engaged community and creating a sense of belonging has been foundational to how they’ve operated from the very beginning. Today, the company relies on their community for product feedback, content, growth, retention, and in-person advocacy, and the loyalty they’ve cultivated has made them a force in the cosmetics industry.
But Glossier is far from the only brand whose community has powered meteoric growth.
Even before we were all working, and working out, from home, Peloton had built a loyal community of riders who would sometimes travel across the country by the thousands to gather in person and meet friends they had made online. Peloton instructors have even become influencers in their own right (Robin Arzon, Head Instructor at Peloton, has nearly 450k followers).
Since the COVID-19 pandemic began, Peloton’s popularity has understandably soared. According to their most recent earnings report, “The company said it ended the quarter with a connected fitness subscriber base of more than 886,100 people, up 94% year over year… [Meanwhile,] average net monthly churn, which Peloton uses to measure retention of connected fitness subscribers, hit 0.46%, its lowest level in four years.”
Executed well, investing in community has a clear bottom line impact. In some cases, we’ve seen community-driven referrals lead to 3x the lifetime value (LTV) of users acquired through traditional Facebook ads. With ever increasing customer acquisition costs, retaining an existing customer will always be cheaper than acquiring a new one. Building real relationships with customers, wherever they are, is the first step to increasing LTV.
Looking to the future
As traditional advertising methods continue to lose trust and viability, brands are realizing they must invest in their people, not just their channels.
Billboards and Facebook ads no longer attract the modern-day consumer — in fact, over half of Gen Zers use ad blockers and +70% seek to skip ads when possible — and businesses can no longer rely on third-party platforms like Amazon, Facebook, or Google for sustainable growth without risk for disintermediation.
Despite having an increasing, and often overwhelming, amount of data on their consumers, many brands find it harder than ever to build, and own, a real relationship with them. Those who invest in nurturing authentic relationships with their communities, and build on shared values, will be the ones to thrive this next decade.
Some marketing automation and CRM tools claim to address this new paradigm, and yet they are organized around funnels and pipelines. Shouting at your customer, even in a more personalized way, is no longer enough. We believe the next generation of successful marketers will look at their consumers not as leads to manage through a funnel, but relationships to nurture and invest in.
We believe there is a gap for marketers who want to focus on deepening their most important relationships – which is why we came up with the concept of Community Intelligence Marketing.
Community Intelligence Marketing represents a new solution for customer-first marketers to:
1) Identify and onboard their most important relationships wherever they are
2) Engage with purpose
3) Quantify the impact
Real relationships have always represented the foundations of any successful business. Now brands have the ability to scale the personal touch to nurture and engage these relationships. We’re excited to help usher in a new age of marketing rooted in trust and connection as we empower companies to invest in their most valuable asset — their communities.