The Rise of Collectivism and Its Impact on Brand Growth

In today’s fast-paced world, more and more people are adopting a collective mindset, which is altering the way they engage with businesses and brands. People are becoming more conscious of their actions and are closely scrutinizing the behavior of the brands they interact with. This change in attitude is driven by younger generations, such as Gen Z and Gen Alpha, who prioritize values and social impact over material possessions. As a result, businesses are being challenged to adapt to this new mentality.

Why Does It Matter?

With the growing popularity of collectivism, businesses need to ensure that they stay true to their brand’s values and support causes that align with their target audience. This approach not only helps in building lasting relationships but also motivates everyone involved in the business to feel dedicated to the brand’s mission.

Who is Driving this Change?

Many people around the world are starting to seek a more decentralized system of power and a collective approach, some groups are more radical than others. The younger generations, including Gen Z and Gen Alpha, are leading the way towards a new system where values, not excess and ownership, are the status symbols. They are disenchanted with mainstream politics and are more interested in advocating for causes rather than supporting political parties.

Where the younger generations have taken the lead, others have followed, and some of their social behaviors are now seen as normal across all generations. For example, “calling out” brands for unethical behavior has become a phenomenon of its own. A lack of transparency is usually the catalyst for such actions. Collectivist action means that there are no hiding places, like the controversies surrounding the materials used in Thinx period pants or events that have rapidly shed their oil company sponsors once their hypocrisy has been exposed.

Why Does it Matter for Brands and Businesses?

Collectivism is a mindset that makes people aware of the world outside of themselves and helps them understand the groups they belong to. It encourages individuals to question their actions within these groups and to evaluate the actions of the brands they interact with critically.

As society becomes more focused on collectivism, the relationship between brands and their customers is changing. This shift is having an impact on how businesses grow and innovate. There are four key areas in which brands and businesses can innovate in response to collectivism.

Governance

Individuals who prioritize collective benefit are increasingly scrutinizing the actions of the businesses they purchase from. They expect companies to prioritize social impact and positive human outcomes over or at least equally with shareholder profit generation. As a result, we are witnessing a growing trend of companies that focus on creating positive impacts, which translates into significant benefits. Such companies tend to experience faster growth in turnover, higher employee retention rates, more innovation, and more tremendous success in obtaining finance than traditional businesses.

So, what can brands do to adapt to this trend? Firstly, they must adopt a transparent approach to sharing information publicly. Business leaders and marketers need to have a deep understanding of their brand’s value proposition and leverage it to support causes that align with it. This requires a forward-facing approach that supports long-term objectives and allows all levels within a business to participate and feel invested in the brand proposition.

The best business strategies are designed to be democratic and horizontal, allowing all employees to pitch ideas for the company to support causes they care about. Leading companies in ethical business practices are at the forefront of encouraging employee activism, which promotes positive change and avoids unsustainable practices.

Trust

Many companies believe that building trust with potential customers is the first step towards growth. However, the erosion of trust in traditional institutions such as the government and media has changed the way trust structures work. This means that simply aligning with established institutions is not enough to gain trust at scale. Instead, trust comes from more personal sources, such as peers, word of mouth, user-generated content, and influencers. However, these sources are challenging to control. Therefore, businesses need to find ways to encourage influential individuals to try their products and services and spark conversations that trigger word of mouth.

Community

It’s important to remember that even though a “collective” may sound like a large and undefined group, the reality is often quite different. People tend to find a cause or interest group that they can identify with and act within that community. This is evident in the way that digital experiences have become increasingly specialized and tailored to specific groups or interests.

For businesses and brands, this means that a narrow and focused approach is often more effective than a broad and general one. It’s important to understand the people you want to engage with and focus solely on them, rather than trying to appeal to a wide audience.

This approach is particularly effective in certain industries, where brands have been successful in building loyal communities of fans and customers. These communities can become the lifeblood of a business, creating brand loyalty that is difficult to achieve through more traditional marketing channels.

Commerce

Individuals with a sustainable mindset prefer businesses that embrace circular economy models over those that promote fast consumerism. Additionally, peer-to-peer commerce is becoming increasingly popular as it allows customers to interact with brands directly via social media platforms. In this new era of trust-based systems, content sharing, and collective viewing among groups with shared interests are also gaining traction. There are numerous examples of such platforms that emphasize these features.

Businesses should focus on creating brands that are recognizable beyond their channels. Additionally, they should consider shared ownership models, such as rental markets, to increase access to luxury or high-priced items for a larger audience. This can also help reduce manufacturing impact and waste on the planet.

Collectivism is bringing about significant and subtle changes in the brand environment. As society evolves, people will expect businesses to adapt to these changes. This doesn’t necessarily mean less growth but rather a shift in perspective and understanding of customers’ expectations and requirements within this new mindset.