What role does trust play in the relationship between consumers and retailers? And how has this been affected by digital transformation?
Reply, which specialises in the design and implementations of solutions based on new communication channels and digital media, has conducted research to understand the impact of trust on brand loyalty in this digital age.
The research found that trust has been historically generated via a high-touch, brand-led relationship, but increasingly is being generated within a high-performance executional relationship, by retailers investing in brilliant end-to-end customer experience, supported by technology.
There are therefore different manifestations of trust, falling into two main camps: Reputational trust and Executional-earned trust.
Reputational trust is a form of trust derived from going above-and-beyond, and creating strong emotional bonds. This derives from the brand, advertising, and from personal encounters with engaged and helpful service agents.
Execution-earned trust derives from consistently doing what is promised. This is built from frequent successful transactions, and effective customer service, and has been turbo-charged by technology, with the smartphone at the heart of the experience.
The key drivers for trust continue to be quality, price and elements relating to service and care.
High quality products (“High quality products” 55% ) is the top factor that influences trust.
However, ethics, values, responsibility and transparency around products and services come a long way down the pecking order of trust-drivers (“Strong ethics” 31% and “Transparency around how their products are made” 31%). The most trusted retailers are not primarily associated with being ethical or responsible.
Price is an important trust-driver. However clear and transparent pricing is more important than low prices (“Clear and simple pricing” 53% and “Low prices” 43%), which can damage trust if the value proposition is not understood. Variable and adaptive pricing also causes mistrust. The idea of variable pricing implies rewarding or penalising shoppers depending on their profiles and/or circumstances. This practice is poorly understood by consumers.
The research has analysed the impact of technology on trust. Technology is not a strong trust-driver per se, but tech applications can turbo-charge and enhance service and customer experience, which are key trust-drivers.
The research also explored five future-retail concepts that can enhance and streamline customer experience and purchase process: facial recognition, mobile tracking in-store, smart connected kitchens, social media shopping and virtual assistants. The Smart Kitchen is the most appealing concept to consumers, but whilst the other innovations are met with caution by more mainstream shoppers, more tech-savvy consumers are willing to adopt all of these innovative ideas (“Smart Kitchen” 28%, “Facial Recognition” 21%, “Virtual Assistant” 21%, “Social Media Shopping” 18%, “Mobile Tracking” 16%).