Transparency is a hot topic for business. Most large companies now disclose their sustainability impacts, goals and progress through CSR reports, and many brands are being honest and open about their values and beliefs. So why aren’t these efforts cutting through to consumers and building trust?
Last week, at the Sustainable Retail Summit in Lisbon, we launched a report that aims to answer that question. The Honest Product Guide is designed for business leaders, brand owners, marketers, experts and changemakers seeking to solve the crisis of trust between companies and the consumers they serve.
You can download the report here: bit.ly/thehonestproduct
To build the report, we surveyed 130 corporate experts from over 70 companies globally (members of the CGF and of our survey partner the Chartered Institute of Marketing) and interviewed 19 senior leaders from consumer goods companies and expert organisations.
We also sought the views of consumers, carrying out market research with 3,621 consumers across seven markets.
Here are some of our key findings:
The ‘death of deference’ means that the nature of trust has changed – forever.
It has become a corporate truism that consumers no longer trust business, backed up by global surveys such as the Edelman Trust Barometer, which tells us that 42% of people globally don’t know which companies or brands to trust.
But this topline data masks a deeper truth. Trust in institutions may be in decline, but that doesn’t mean that trust has reduced overall. Instead, it has simply been redistributed. We now trust family, friends and even strangers on the internet over institutions. ‘People power’ is challenging the supremacy of ‘powerful people’.
This change in the way we trust others is not an isolated phenomenon, but is part of a wider arc of history. Since the 1950s, when ‘big box’ brands were in their heyday, mass education, mass media and massive scandals (and, more recently, the internet) have driven the ‘death of deference’. We no longer defer to institutions or those with access to more information. This change is not short-term or temporary – it’s the new normal, and companies must learn to thrive within its rules.
Products, not companies or brands, are the future of transparency.
Our research shows that global consumers are hungry for more transparency about the social, health, environment, and safety credentials of the products they buy (70%), rather than the companies that made them (30%).
To understand how product transparency can build consumer trust, we need to look to the challenger brands. It’s tempting to see the success of breakthrough brands – for example, Lush, Innocent, and Tony’s Chocolonely – as a triumph of savvy branding and marketing. But they are much more than that: look closer, and you’ll see that transparency is almost an article of faith for them. They are setting new standards in product transparency, and reaping the rewards of trust.
And if that isn’t enough to convince you, consider this: research from Label Insight shows that 76% of shoppers now turn to the internet for answers to their questions about products. If companies choose not to engage, then consumer reviews, activist websites and tweets will fill the information void they leave behind.
The starting point is a mindset change: from product to person.
There’s a reason we named our report The Honest Product Guide rather than The Transparent Product Guide. In our research, a clear trend emerged: the need to ‘humanise’ transparency, speaking and acting in ways that consumers can understand and trust. Honesty is the human form of transparency – it is much harder to achieve, but the rewards are far greater.
Honesty can play a key role in building consumer trust by recognising the need to communicate to consumers on a human level. Humans build trust with each other by striving for humility, offering information that is in the other’s interest, accepting responsibility when things go wrong, and keeping their promises. Products can do the same by building an authentic program of radical honesty.
The secret to human trust is vulnerability – something that companies will need to become increasingly comfortable with if they are to engage with the modern consumer. Being a trustworthy person requires giving trust first, taking risks and standing for the value of honesty. Human trust isn’t a tradable commodity; it’s an emotional value.
There’s so much more in the full report, including case studies of companies who are getting it right on transparency, and tools to help you on your journey.
If you’re not sure where to start, try the Honest Product Test on page 22, which helps you establish whether your own products are building trust in a human way. Then you can build your own plan to build trust with consumers through honesty.
Let us know how you get on.