Creating Opportunity with the Connection Economy

Is there really a loneliness epidemic? If so, what’s causing it?

Kate: Digital transformation is hampering social interactions. It’s paradoxical: we’re more connected than ever, yet widespread loneliness persists. Despite being ‘chronically online’, social isolation among consumers is rife – especially amongst younger generations. Research from Future Care Capital found that nearly 20% of British 16- to 24-year-olds feel ‘often’ or ‘always’ lonely. You might think of isolation as an ‘older person’ issue, but only 6% of people aged 65-74 said the same.

People are having fewer spontaneous encounters. Reasons for this range from the rise of personalised, on-demand services – like food delivery apps, video streaming platforms and AI assistants –to the surge in remote work and hybrid schedules, reducing natural IRL (in real life) office interactions.

Cost is another barrier to connection. Dating app Hinge and research firm DCDX uncovered that 48% of US young adults express that financial constraints often prevent them from participating in social outings or events.

My research also points to increased urbanisation as a key driver. The decline of traditional community institutions, like clubs and churches, is playing its part. It’s causing a lack of community cohesion – Pew Research identified that only 49% of US city dwellers feel close to people in their local community.

This sounds like a social change; why is this an issue that brands and marketers need to be thinking about?

Kate: People are searching for support from brands, and organisations are rallying. The World Health Organisation has called loneliness “a pressing health threat”. There’s growing awareness of this amongst consumers – a national survey from Australian youth mental health organisation ReachOut found that 82% of 16- to 25-year-olds in the country are worried about loneliness having a moderate to major impact on their mental health and wellbeing. People want authentic, meaningful connections, and are prioritising experiences that promote this over material possessions.

If consumers want experiences, is this where brands should be investing?

Kate: There’s a lot of opportunity to support consumers and boost brand loyalty. Research from Imagen Insights revealed that 95% of Gen Zers say IRL interactions with friends are more important than making friends online.

One key avenue for brands to tap into the connection economy is through hosted experiences, where brands create hubs for interaction that promote authentic conversations and encourage organic interactions. As part of its social impact programme One More Hour, Hinge is giving $1m to social groups in the US – including Intrsxtn Surf, HBCUs Outside, ATLFilmParty and Reading Rhythms – to advance their efforts in helping young adults find in-person connections in their local neighbourhoods.

Elsewhere, earlier this year, Absolut Vodka partnered with Tomorrowland festival for online and on-site activities tackling loneliness. The IRL activation included a community booth in the festival’s camping area for people to connect, a live podcast with artists addressing featured topics, and daily ‘speed networking events’.

Are there categories or industries that you think should be paying particular attention to this trend?

Kate: Across sectors, consumer-facing brands need to take notice – it feels particularly pertinent for those in retail, food and beverage, and entertainment. They risk losing market share to more socially engaged competitors otherwise.

Tech companies, and especially app developers, could be key in unlocking true social connectivity for their consumers. Kndrd piqued my interest as a case study: the app facilitates casual meet-ups for various activities, from impromptu sports games to after-work socialising, enabling users to create or join local gatherings based on shared interests.

Why should brands act on this insight now?

Kate: Societal structures are continuing to shift, but the need for connection remains fundamental. Governments are prioritising social connection as part of long-term planning – last year, the US Surgeon General issued a Framework for a National Strategy to Advance Social Connection. Brands can help to address this critical societal need with business solutions. While supporting their consumers, they’ll be reaping the rewards of brand differentiation and boosted loyalty. Perhaps most significantly, brands that act now will gain a first-mover advantage in the emerging connection economy.

Kate Johnson is a strategist in the Stylus Advisory team. The Advisory team are experts in producing exclusive custom research, empowering businesses to take on the biggest challenges and seize the future’s greatest opportunities.