It’s perhaps easy to associate a local retailer with a sense of community. After all, it’s likely that the owners will reside in the area, know the regular customers personally and so on. When you think of an online store however, that isn’t what instantly springs to mind.
A new paper in the Journal of Marketing Theory and Practice suggests that is a big mistake. It reveals how retailers should be trying to cultivate community so that they can reap the benefits involved of increased loyalty and a willingness from customers to pay more.
“In these types of studies we can show that as much as 40 percent of retailers’ support is due to these sociological factors,” the researchers say. “You’re willing to pay more at a retailer if they are actively supporting the community.”
Interestingly, the research suggests that larger retailers are tending to do much better in this regard than their smaller rivals, despite the pressing need amongst smaller retailers to foster such links to compensate for their weakness in areas such as size and scale.
How can online retailers foster this sense of community? The researchers outline four social functions associated with development of community – socialization, mutual support, social participation and social control.
To do this, retailers need to do a number of things:
- Appreciate the core values of your customers - and of course make sure these are reflected in what you offer and how you offer it
- Support things that matter to your customers - so cycling website Wiggle run various sportive events, because these things matter to their customers.
- Encourage customer to customer interaction – this should be a no brainer with the array of social networks and tools out there
- Provide structure and rules – this is basic community management, where you provide a structure for consumers to operate in.
Dr Landry is planning a follow up study that will be solely devoted to online retailers and how community building affects them, but there has already been evidence that socially engaged customers are better customers, with this study from earlier this year showing that an engaged social customer was worth around 6% more than a non-engaged one.