Product recalls and the growth of “click farms” have given rise to shoppers, especially millennials and Generation Zers, who no longer believe what they see online. But there are ways companies can grab their attention and build customer trust.
Businesses can remedy this reality by doubling down on fostering reliability, connection, influence, values and experience, said Jola Burnett, vice president at the consumer life group of research firm GfK.
Lack of online trust
There are reasons why trust has become a pivotal issue along with the growth of online shopping. The trust equation centers on three things: product, such as quality, price and safety; service, as in responsiveness of customer’s needs; and accountability, such as the issues connected to the environment, honesty, security and the ability to fix issues quickly.
Last year’s 703 product recalls gave rise to 48 million people becoming sick from recalled food, and that has contributed to consumers becoming even more wary of the information they get online about the products they want to buy. The rise of both fake product reviews and click farms, operations where hundreds or thousands of smartphones are cued to click on paid box accounts aimed to deceive or disguise themselves as humans (for the purpose of pushing traffic to a site or product) also makes credibility tough to come by in the digital world.
Five elements that build customer trust
Burnett believes that a focus on five specific elements can help build trust among consumers, especially since 46% of global consumers in 2019 said, “I only buy products or services from a trusted brand.” That compares with just 28 percent in 2011, a rise of 18 points. Among U.S. consumers, representing 35% of those polled, the increase between 2011 and 2019 was 12 points.
Reliability, especially safety of personal information, is one of consumers’ top concerns. “It’s estimated that one cyberattack occurs every 39 seconds, with one million records stolen daily. It means that every company is a tech company today,” Burnett said.
Some 18% of consumers are worried about personal information falling into the wrong hands. That concern is on the rise across all regions, given the breaches at Facebook, Whole Foods, Best Buy, Sears and Macy’s. Passwords that are typed in at a site are stored, and most firms don’t do enough in terms of encryption of the information, Burnett said.
Another key factor is connection, as in using artificial intelligence to create an emotional contact much the way humans interact. About 41% of global consumers have spoken to a digital virtual assistant, such as Alexa or Google Assistant, while another 41% — up 9 points from 2014 — said, “I really need the shops and services I use to be available at all times.” And some retailers, such as Bottlerocket Wine and Spirit Store in Manhattan last year, have tested Amazon’s Alexa using an in-store voice application called “Smart Aisle” to identify personalized recommendations to help customers shop for whiskey in stores.
When it comes to what makes a trusted brand, heritage isn’t as important as one might think — thanks to the rise of influencers. Kylie Cosmetics, launched in 2014, harnesses the power of influencer and founder Kylie Jenner. The brand garnered “$412 million in retail sales in three months and is expected to hit $1 billion by 2022. It took Bobbie Brown 25 years to reach $1 billion in sales. Lancôme took over 80 years to hit $1 billion in sales,” Burnett said during a conference call Monday hosted by Cowen & Co. analysts Oliver Chen and John Kernan on “Trust in the Age of Doubt: The State and Shape of Consumer Trust.”
Don’t want to believe in the power of experts? Some 49% of those polled by GfK agree that “retailers, advertisers and brands have less influence on my purchase decisions than ever before,” Burnett said.
But it doesn’t have to be a social media powerhouse influencer like Kylie Jenner. Even product reviews online can persuade a shopper deciding whether or not to buy a specific item. User reviews were key for 44% of consumers in 2018, while 43% relied on expert reviews and 31% on social media influences. That’s compared with just 36%, 33% and 23%, respectively, in 2015, according to GfK data.
Consumers are also placing increasing importance on values, or more specifically whether brands share the values that shoppers hold dear. A GfK survey in 2019 found that 41% said, “I’ll select one brand over another, specifically because it supports a cause I believe in,” while 24% agreed with the statement, “I avoided a particular brand/store in [the] past month because I disagree with their values.”
Companies need to build trust and illuminate their purpose, and that means they need to “keep an eye on changing consumer values,” Burnett said, adding that one way to focus on values is to “make transparency a part of your DNA.”
Burnett cited a response that gave a shout out to Home Depot in Canada: “I trust Home Depot because the salespeople are helpful and honest if they don’t know the answer to your question.” Another response praised Germany’s La Biosthetique: “Acts authentically, does not carry out any animal testing and all the products I have used so far have been high quality.”
And she highlighted food retailer Nada, which focuses on the environment by eliminating excess packaging. Food options are offered in bulk bins, and consumers know to bring their own wrappers. “This is authenticity in action. Everything is package free … no plastic, paper or wrapper at the deli counter,” Burnett said.
Patagonia5 is another brand that has made its name on transparency, she said, noting that the brand is very clear about its mission and how it inspires change. The company shows how apparel is made, which in turn has created a stronger demand among millennials and Gen Z, Burnett said, adding that the focus on ethics and paying higher wages also resonates with younger consumers.
More than three-quarters (76%) claim they only give brands two to three chances before they stop shopping with them. And 43% cited poor experience as the top reason to leave a brand behind for good.
When it comes to customer experience, consistency is key, Burnett said, adding that “if something goes wrong, be accountable, fix it, and move on.”
Frictionless shopping will also become important as millennials seek simplicity. They are looking for ways to simplify their lives, Burnett said, noting that she expects the click-and-collect trend to continue to grow. “You need to understand changing values. … When thinking about innovation and disruption, look at consumer lifestyle needs and wants,” she said.
Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.
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