US Insights

From Physical to Digital Neighborhoods: Putting Passion into Play

Mitch Eggers

Chief Scientist

Brands 03.05.2018 / 10:00

kt_com_Takeaway 9

In 2018, 2.5 billion people will own smartphones.

Consumers are constructing and migrating to online digital neighborhoods at an extraordinary pace, which puts a premium on understanding these online digital neighborhoods.

In North America in 2017, two-thirds of the population owned a smartphone, a 13 percent increase since 2014. Globally, in 2018, 2.5 billion people will own smartphones, up from 1.3 billion in 2013. A recent study by Deloitte finds that adults check their smartphones 50 times per day. Millennials do so 150 times per day. In fact, 87 percent of smartphone users under the age of 34 report never being without their smartphones.

These incredible devices allow people to create digital neighborhoods of their own choosing, and then take them along everywhere they go. The field of human ecology helps us understand these digital communities.

The fundamental concept at the heart of human ecology is that spatial distributions like the neighborhoods people live in and how those neighborhoods are arranged reflect social organization. This is why sociologists, urban anthropologists and urban ecologists measure neighborhood integration and segregation. If we don’t live in the same neighborhoods, it is very unlikely that we will interact socially.

Market economics sort people into physical neighborhoods, but these same forces also allow people the opportunity to sort themselves. People can and do buy their way into neighborhoods with good schools, good shopping, good amenities and even a good yoga studio or two.

There are social and legal codes that influence how people are allowed to sort each other into one place versus another. These codes are designed to ensure that the marketplace operates transparently and fairly. People compete for the best that the marketplace has to offer as varying combinations of market economics, government programs and legal restrictions sort them into physical neighborhoods.

Digital neighborhoods have different sorting mechanisms. Digital is not about zip codes, geo demographics, race and ethnicity or economics. The Internet and the smartphone have removed nearly all the friction of physical neighborhoods. Distance from one website to another is essentially non-existent. Most sites are free or have a very cheap paywall hurdle. There is almost no way to discriminate based on age, income, family type, race, religion or sexual orientation. Everybody gets the same offers and apps to build their digital neighborhood.

Urban ecologists might have expected that integrated digital neighborhoods would reinforce our shared social fabric and diversity. Unfortunately, people have sorted themselves into fragmented digital neighborhoods based on tastes, preferences, personalities and beliefs. To understand what happened and what it means for consumers and brands, we need to turn first to the field of economics then to the field of psychology.

Economically, low costs make digital niches viable. It also costs much less for consumers to find specialty sites. Search engine power allows consumers to search, evaluate and buy a specific item. Once launched, a niche site is as affordable to support as a consumer micro-market.

These economic advantages are reinforced by the fact that people seek and enjoy information, news and commentaries that agree with or confirm their values and beliefs. Psychologists have also found that we ignore, disregard or otherwise filter out facts that are at odds with our beliefs. Brain scans show that such dissonance activates the fight-or-flight circuits in our brains. In fact, when confronted with challenging facts, we hold our existing beliefs evenly more strongly.

This is part of our innate need and desire to belong.

In Maslow’s hierarchy, belonging is what comes next after our physiological and safety needs.

With these lessons in mind, we can begin to make sense of today’s digital neighborhoods. An explosion of choice paired with confirmation bias and a need to belong drive selective sorting and a hardening of opinions and tastes. But it also creates opportunities for brands.

The depth of engagement in digital neighborhoods is very strong, stronger than might be expected based on studying physical neighborhoods. Digital neighborhoods have come together around shared interests that are not constrained by the kinds of things that have affected physical communities in the past. As a result, digital neighborhoods are strongholds of intense emotions and attachments, which is one of the biggest realizations to come to the fore over the past year. But extreme politics are not the only thing to have taken root in digital neighborhoods. Extreme engagement with brands, both new and old, can be found there as well.

Consider the Instagram fashion influencer Arielle Noa Charnas who blogs at She built a following and became an influencer. As her following grew she crossed over from individual to brand, and then to a purveyor of fashion items through a partnership with Nordstrom, which reached out to stock items that her followers wanted. Within 48 hours of posting an excited, emotional announcement, she had received over 3,500 comments and requests. A new brand was born. Charnas launched the Something Navy brand as a capsule collection with Nordstrom’s Treasure & Bond, and when shoppers buy from this collection, Nordstrom donates 2.5 percent of sales to organizations that empower youth.

This has many of the classic components of great brand building applied in a guerilla fashion within Charnas’s digital neighborhood. She has authenticity, trust and transparency. She has a direct connection with her followers and she gives them all the credit for her success. And she gives something back.

Another example of creating success with digital neighborhoods comes from Chip and Joanna Gaines. They had been flipping houses for several years when one of their projects was written up on a popular blog. A producer read it and wondered if this might be right for a TV program. After some due diligence, the HGTV show, Fixer Upper, was launched. Chip and Joanna pursued a digital strategy along with the TV program by embracing home-related topics found on Pinterest and Instagram. The result was a hit show for five seasons and over 8 million followers on social media. Their franchise includes a quarterly magazine, a retail store called Magnolia Market at the Silos, a real estate company, and their own lines of paint, rugs, wallpaper and furniture. They recently announced the launch of a retail capsule collection with Target. It is another bottom-up success built by understanding the depth of connection inherent in digital neighborhoods.

The future may be fragmented and polarized, but it is sorting itself out in a new kind of neighborhood, one with the sort of passion that brands covet and one with the kind of access that all brands can afford.

Source: Lightspeed

Editor's Notes

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