Why You Should Have A Retail Investor Strategy

Retail investors now own 38%¹ of US stocks and drive up to 36%² of daily trading. That means, retail investors make up the largest single group of shareholders, even if they don’t form an outright majority.

For IROs, that’s too big a share to ignore — especially when engaged retail lowers your cost of equity capital³. In fact, companies that deliberately court retail see higher daily trading volume, leading to a lower cost of retail investor retention.

Many US investor relations officers (IROs) remain focused on institutional engagement, yet evidence shows that retail investors play a critical and growing role in capital markets. Here’s why a targeted content marketing strategy for a retail investor audience deserves your committed attention.

Source: Sifma

Why Engage with Retail Investors

• Retail ownership is too big to ignore: Retail now makes up a major share of both ownership and trading, especially in small and mid caps, making it impossible to overlook.

• Retail boosts liquidity and lowers capital costs: Engaging retail boosts daily trading volume, lowers the cost of equity, and helps meet institutional liquidity thresholds.

• Retail holders bring stability and resilience: Retail investors hold longer, buy dips, and cushion volatility, giving small and mid-caps more resilience.

• Retail votes can swing outcomes: Retail turnout is rising and can swing proxy outcomes, especially with perk programs that drive participation.

• Retail investors become loyal customers: Retail investors are also loyal customers who buy more from companies they own, creating a growth loop.

• Digital channels make retail outreach easy: Digital channels make retail outreach cost-effective, scalable, and easily repurposed across platforms.

• First-mover advantage: Few peers engage retail, so early movers stand out, gain liquidity, and attract more coverage.

• Retail aligns with the next generation: Reaching younger, ESG-minded investors expands your base and strengthens your reputation with the next generation.

The numbers behind these benefits make the case even stronger. Retail investors are no longer a side note; they are a structural force reshaping US capital markets.

For IROs, these numbers show retail is not just an audience, but a lever you can pull to influence trading, valuation, and governance.

Engaging Retail Investors

Retail investors are no longer on the sidelines of capital markets. They’re central to them. With 38%¹ of US stock ownership and up to 36%² of daily trading volume, retail investors are now a foundational pillar of shareholder bases across public companies. And yet, many investor relations (IR) strategies still prioritize institutions while overlooking this fast-growing and influential segment.

The fact is, until institutional investors show up, retail investors are the primary source of trading volume for small-cap stocks. Without cultivating retail, most small-caps remain illiquid and unattractive to funds.

If your IR strategy doesn’t include retail, you’re missing out. The opportunity isn’t just in ownership, it’s in advocacy, governance, and long-term stability. Companies that engage retail shareholders early and often stand to gain not just capital, but a resilient and supportive investor base.

That foundation is powerful, but the real advantage comes from attracting and retaining investors.

Investor Retention Is More Important Than Acquisition

In times of market uncertainty, retaining your investors isn’t just smart, it’s essential. Strong relationships provide stability, lower costs, and build the trust needed to weather volatility, far more effectively than chasing fresh capital.

Retention beats acquisition — in marketing and in IR. It’s far cheaper to maintain strong relationships with existing shareholders than to constantly chase new ones, and according to Irwin⁹, IR experts and a FactSet company, it is “9x easier to get a current shareholder to buy more stock than to acquire a new shareholder”.

Consistent communication and loyalty build a stable, predictable capital base, strengthening long-term company value without the high costs of acquisition. Acquisition still matters; without new investors, there’s no one to retain. The real advantage comes from striking the right balance between winning new shareholders and keeping existing ones loyal¹⁰.

Clear, compliant messaging in plain language not only builds confidence but also reassures retail investors that management is transparent and trustworthy, while still meeting regulatory requirements. Consistent messaging and content marketing reinforce your profile and credibility, giving investors clear reasons to stay loyal. This means your job is not just to attract capital, but to nurture it.

Retail Shines in Volatile Markets

Amid 2025 volatility, Vanda research reported that retail traders poured $8.8B¹¹ into U.S. stocks in four days, and JPMorgan sees $11B in weekly buys, 2.5x last year’s average¹¹. While institutions tend to rotate in and out based on short-term performance or sector rotation, retail investors are consistently net buyers. Their steady participation enhances liquidity, helping to stabilize prices and mitigate excessive volatility, which benefits long-term company valuations.

Companies that understand how retail participates in moments of uncertainty can better manage market expectations and price stability. But stability isn’t the only benefit, as retail can also put companies in the spotlight.

Retail Turns Stocks Into Spotlights

The 2021 “meme stock” surge showed how retail can put companies at the center of the market. GameStop and AMC saw trading volumes explode, which not only boosted liquidity but also generated a wave of analyst coverage and countless media headlines. In a crowded news cycle, this kind of visibility cuts through the noise, ensuring a company’s story reaches investors who might otherwise overlook it.

The spotlight drew in more institutional interest, while research on meme corporate governance found that retail pressure increased scrutiny and compelled companies to adopt greater transparency and responsiveness¹².

Diversity of Investors Powers U.S. Market

Nasdaq CEO Adena Friedman tells McKinsey¹³ that the U.S. benefits from its most diversified market in the world by drawing in retail, institutional, pension, and hedge‑fund investors all at once. That mix, she says, creates greater liquidity, tighter bid‑ask spreads, and better execution for all participants. She attributes that strength to the rise of retail participation, enabled by online brokers, bringing in tens of millions, if not hundreds of millions, of daily traders. This broad involvement, Friedman argues, powers enormous trading volumes and market resilience.

Balancing Digital Scale with Personal Connection

Digital channels are essential for reaching thousands of investors cost-effectively, but investor relations has always been rooted in trust and human connection. The most effective strategies combine both scalable content marketing to build awareness, and tailored touchpoints that deepen relationships with long-term holders.

For small and mid-caps, this balance is critical. Digital efficiency maximizes reach on limited budgets, and for a team of one, smart content can be repurposed across email, social, and earnings materials, thereby maximizing reach without ballooning budgets. Authentic personal engagement ensures investors feel heard, valued, and confident in management.

The companies that succeed are those that use technology to extend, not replace, genuine relationships.

Nowadays, you must carefully balance the efficiency of digital tools without compromising on the enduring value of obtaining and retaining personal connections. Instead of relying on boilerplate reports, digital content, from Q&As to explainer clips, lets IROs meet investors where they are, while still preserving the trust of a direct connection.

Controlling your own narrative is more important than ever. According to research from the National Bureau of Economic Research, the median retail investor spends just 6 minutes researching a stock before placing a trade¹⁴. That means your equity story must land instantly, or risk being overlooked. If investors do not see a clear, compelling value proposition at first glance, they move on. Digital channels give you the chance to seize attention in those fleeting minutes and make your case before the window closes.

The rise of finfluencers shows how investor communications are shifting toward personality-driven, digital-first channels, which demand a new approach from IR teams.

Shareholder Engagement Is Changing

Investor relations can no longer rely on quarterly calls and static press releases. Retail investors expect ongoing, transparent communication delivered in formats they actually consume, from short videos to interactive updates. This cuts through the flood of market headlines and jargon that overwhelm everyday investors, replacing static disclosures with storytelling that actually resonates.

For IROs, this shift isn’t just about keeping pace; it’s about building lasting trust with the next generation of shareholders.

For proof that retail investors are driving change our collection of 2025 IR marketing stats highlights the trends companies can’t afford to ignore.

The Economics of Overlooking Retail

Ignoring retail comes at a cost. Illiquidity makes shares unattractive to institutions, raising the cost of capital and leaving companies vulnerable to activist pressure. Legacy IR tactics designed for institutions don’t move the needle with individuals scrolling on mobile.

A digital-first approach keeps companies relevant and investable in today’s market. By contrast, a strong retail base improves trading volumes, tightens spreads, and creates a buffer that protects against market swings. For small and mid-caps, retail engagement is not optional; it’s a financial necessity.

From Passive Holders to Active Advocates

Today’s retail investors aren’t just small shareholders; they are customers, voters, and vocal advocates. They amplify your story on social platforms, support management in proxy battles, and reward the companies they believe in with both capital and loyalty. As retail turnout rises, they increasingly tip close proxy outcomes and blunt activist pressure.

By cultivating these relationships, you can transform your retail investor base from a fragmented audience into a powerful, long-term asset.

The Bottom Line

Retail investors are not an afterthought; they are a core part of today’s market. They provide liquidity, drive narratives, and deliver stability when engaged effectively.

For small and mid-cap companies, retail isn’t optional. It’s the difference between being an illiquid ticker that institutions avoid and a tradable, trusted stock that attracts long-term capital.

Silence breeds risk and missed opportunities in uncertain times; that’s why staying visible in volatile markets is critical.

Retail IR is no longer about asking whether to engage. It’s about how fast you can build trust, show up where retail is listening, and convert curiosity into conviction.

Winning this new era of IR requires not just intent, but expertise, which is why more small and mid-caps are turning to Digitonic to craft their retail-focussed proposition and create the regular content needed to attract retail attention.

The Future of IR Is Retail-First

Investor relations is entering a new era. Retail is a structural force shaping liquidity, governance, and corporate reputation. Tomorrow’s IROs will balance digital efficiency with authentic personal connection, delivering investor communication that is clear, engaging, and built for scale.

For small and mid-cap companies, the path forward is clear. Those who adapt now will enjoy deeper liquidity, a more resilient shareholder base, and stronger brand advocacy. Those who don’t risk higher capital costs, weaker trading support, and missed opportunities with the next generation of investors.

The future of IR belongs to companies that treat retail investors not as an afterthought, but as partners in long-term growth. The companies that win are those that partner with experts who understand how to reach, engage, and retain retail investors.