The Rise of Retail Shareholders: How to Effectively Engage with Digital

Retail shareholders today are bolder and noisier than ever before, enabled by digital platforms – from Google searches to social media – that allow them to quickly access information, make swift investment and trading decisions in real time, and share insights among peers.

However, many companies continue to rely on tried-and-true investor relations outreach strategies with limited to no digital, which leaves retail investors under-engaged during critical moments.

But that can, and should, change. If retail holders are actively engaged online, the companies they support should be too, bringing the creativity, community and connectivity these shareholders have come to expect.

In addition to owning more stock, retail investors are becoming more involved and investing in matters important to them. According to Broadridge, nearly half (46%) of millennial retail investors (ages 25-40) planned to vote their proxy last year, which was the highest percentage of any age group in 2021 (Source). This means that companies will need to evolve with their retail holder bases ahead of any potential vote to ensure retail holders are already aware and engaged when called upon to make decisions. The time to evolve is now.

Here are four key recommendations to support investor relations professionals as they activate retail shareholders before and during critical votes:

Tailor communications approach to both institutional and retail shareholders.

Both institutional and retail investors review content differently. According to CNBC, 35% of younger holders use social media to research investments, while only 7% use a broker or financial advisor (Source). While institutional holders rely on quarterly SEC filings and earnings calls, retail holders rely on a regular and consistent stream of content within their online communities to inform their choices. That puts the onus on companies to increase their digital output to increase engagement among retail investors.

Make digital a key component of your ongoing investor relations program.

While some people use digital to rally retail investors in critical moments, it’s best to keep them informed and educated about key company initiatives even before a vote. With the prospect of a more active retail investor audience looming, companies should consider alternative methods for engagement, such as:

• Inviting them to send questions ahead of an earnings call with Say Technologies,
• Rewarding them through discounts and free items using Stockperks,
• Participating in retail investor-specific media shows,
• Looking for ways to publish a regular stream of company wins,
• Leading them to specific websites using QR codes, and
• Monitoring or using the social platforms where retail holders are likely to look for information.

Employ eye-catching content to keep their attention.

These holders use their mobile phones when researching or engaging with investor peers on social networks. Companies should create striking, thumb-stopping content featuring easily digestible themes and visually compelling messaging. Infographics, audio clips, brochures, high-quality imagery and short-form videos can make the most impact.

Use paid ads to lead retail holders to important websites and communications.

Paid media, including purchasing ad space on digital platforms such as LinkedIn, Twitter, Google and YouTube, as well as paid advertising in retail-specific financial media outlets, can drive urgency during voting periods and bring attention to important messaging while allowing the company to benchmark its success through the number of clicks, views, likes, comments and shares.

As retail investors evolve, so should their companies. Retail investors are becoming more sophisticated, and companies who implement a digital approach will have a better chance of keeping their retail holders informed, engaged and involved in key moments.