NRF, IBM study: Consumer trust is king
Trust is a private brand’s greatest attribute. If a consumer loves that retailer, shows loyalty toward that retailer and enjoys the shopping experience, she’s more likely to trust that store’s private brand.
Retailers know this, and a landmark study from the National Retail Federation and IBM further supported this saying a third of consumers today will stop buying their preferred products if they lose trust in the brand, and a third of consumers have already stopped purchasing their longtime, favorite brands in 2019, according to the IBM survey.
Results from the survey of 19,000 consumers between the ages of 18 and 73 in 28 countries was released in advance of NRF’s annual Big Show in New York.
The study also covered the importance of a brand standing for a purpose, such as sustainablility.
On average, 70% of purpose-driven shoppers pay an added premium of 35% more for sustainable purchases, such as recycled or eco-friendly goods. Fifty-seven percent of them are even willing to change their purchasing habits to help reduce negative environmental impact. Another 79% of all consumers today state it is important for brands to provide guaranteed authenticity, like certifications, when they're purchasing goods. Within this group, 71% are willing to pay 37% more for companies offering full transparency and traceability.
Kroger’s Simple Truth brand is a great example of providing purpose to shoppers and they are not letting up with such a quick and active move into the plant-based foods arena.
IBM used insights from the research to tout its capabilities to executive transparency and brand compliance programs by leveraging blockchain, a key area of emphasis at the company for several years.
"Transparency constitutes proof that an organization and its offerings are what the company claims to be – a way to earn consumers' trust. Brands can leverage data and integrate blockchain technologies as brand differentiators that effectively provide transparency and traceability – which will also boost profits as the study shows that shoppers willingly pay more if a retailer can demonstrate provenance," said Luq Niazi, global managing director, IBM Consumer Industries.
IBM also launched at NRF a suite of pre-integrated capabilities that leverages artificial intelligence, the Internet of Things and blockchain capabilities branded as, “Store in the Cloud,” to help retailers manage these issues and accelerate store innovation. IBM worked with partners in its developer ecosystem, including Flooid (formerly PCMS), Opterus, RelevanC, Trax and other to bring Store in the Cloud to life. The premise behind the initiative is that retailers are able to quickly extend digital experiences into physical stores, provide consistent personalized interactions, improve customer fulfillment, empower store associates with intuitive apps, enable consumers shop every way they choose and better manage store costs, according to IBM.
Mike Troy writes for affiliate publication Retail Leader. He recapped day one of the NRF show and will continue reporting from New York.