Everledger CEO Leanne Kemp explores how trust has become a differentiating factor in retail. Brands that can manage their ‘trust intensity’ will grow their share of today’s digital marketplace.
The importance of consumer trust in the retail landscape has ballooned in recent years. With so much information at our fingertips, we’re growing comfortable to excellent customer experiences and ever more convenience. The old slide rule of ‘price versus quality’ has been digitally enhanced, adding new metrics such as transparency, safety and sustainability – which can be loosely grouped under the heading TRUST.
Sometimes described as the seventh sense, trust relies more on confidence than tangible evidence. Despite a lack of awareness of how to build and protect it, trust is absolutely front of mind for many businesses and whole industries that have felt the chill of mistrust and low customer confidence. Trustability is an enviable quality.
Of course, the COVID-19 pandemic has only exaggerated the “trust intensity” that brands must achieve to gain and retain our custom. Indeed, “competing on trust” has become a differentiating feature, according to new research by Trusted Retail Innovation, a collaboration between QUT’s Centre for Future Enterprise and Cisco. The research sets out two distinct types of trust that retailers need to get familiar with – and then position their strategies, activities and technologies around – to yield the competitive advantages.
Trust me, I’m a retailer
First, core trust is a hygiene factor or expected level of service, with retailers delivering products or experiences according to their promise. This is simple reliability, such as boxes of eggs arriving fresh and unbroken or providing family fun in a holiday park. The competitive advantage of core trust isn’t particularly striking – it’s bound into the overall ‘value’ of a transaction and brand perception. However, given customers will often make purchases on the basis of reviews and independent trust scores, a loss of core trust can become a commercial catastrophe.
As consumers, we tend to see trust as all or nothing. “Quite trustful” or “mostly reliable” have to be compensated by something else (such as low price or urgent necessity) before we take the risk of disappointment or aggravation.
Extreme trust, on the other hand, is when we place our satisfaction absolutely in the hands of the retailer. We rate their recommendation as better than our own judgment. It’s not a new concept. A local patron might walk into a favorite restaurant and order the special without consulting the board. Generations of families will keep unquestioning faith with a bank or airline. But these are learned experiences or inherited loyalties. In today’s digital, algorithmic world, extreme trust has entered many parts of our lives unnoticed.
Spotify is a good example. Instead of choosing which music to play, we invite the application to entertain us based on profiling, feedback and recent listening. Online retailers such as supermarkets also use extreme trust to offer products that we might never have considered had we visited their store in person.
As personalization technologies mature and customers seek out more experiences they cannot create on their own, extreme trust is set to grow in the future. For people who struggle with or dislike making choices, the ability to offload autonomy is a welcome step. However, brands must also work hard to combat staleness and over-repetition. As good as he is, there’s only so many times you can listen to Ed Sheeran.
Trust in technology?
Armed with this insight, how do retailers convert trust into nickels and dimes? Profiling is a good first step, according to Trusted Retail Innovation. Evaluate the level of trust intensity required for customers to engage with you. E.g. A luxury concierge service will have a higher level than, say, a paper-clip manufacturer. Next, understand your customer trust concerns by getting their feedback or analyzing their data, and then map these across the entire firm or specific products and services.
Now, you can start to manage trust on a strategic basis. Do you focus on core trust only or are there opportunities to develop extreme trust? How can you increase the trust intensity of your offerings? Could you use trust as a new source of competitive advantage? Finally, retailers can make operational changes to tackle areas of uncertainty and so increase confidence.
The good news for brands is that trust is becoming increasingly tangible. Blockchain, AI and IoT, amongst other technologies, make it easier for customers to check where stuff actually comes from. You don’t have to take claims on face value. For example, we have compelling work done with customers in the jewelry, fine wine, luxury fashion, electronics and automotive sectors to evidence the life story of natural resources and raw materials that have passed down the supply chain all over the world.
A customer who wants to buy a precious ring for a significant other can verify that the diamond or gemstone was mined and manufactured in a way that meets with their own values on ethical working and sustainability. Blockchain-enabled platforms, when coupled with a “symphony of technologies” (as I call them), help to remove the problem of trust from the conversation. This secure trust engine becomes especially relevant for the recycling and resale market of items such as electric vehicle batteries or apparel, which offer both a high commercial and environmental value.
Trust has been eroded in recent years – and technology can help build it up again.