Retailers Must Prioritise Trust and Transparency to Drive Customer Loyalty

As retailers do their best to try and predict consumer behaviour, which continues to morph due to stubbornly high inflation, they are facing fall-out from the higher prices shoppers encounter at the grocer and petrol pump: decreasing brand loyalty. Shoppers are increasingly focused on finding the best deals, discounts, and coupons, and many are abandoning their favourite brands and stores in an effort to save money. In fact, affordability is a key factor in how people shop online, with 83% saying they are relying on more affordable stores or buying more private store-label products according to our 2023 Ecommerce Relevance Report. 

As inflation continues to upend the retail industry it’s also weakening the once-strong brand/customer. Retailers must look for new strategies to build trust which is a big motivator for driving sales and profits, as well as customer loyalty. The challenge for brands is how to create an authentic relationship built on trust through an online shopping experience.

Using AI and machine learning to power online experiences and enable the 1:1 personalisation that consumers expect can help build trust. After years of shopping online, consumers immediately know the difference between a good and bad online experience. In fact, our survey found that most respondents expect the online shopping experience to be better than what they receive in-store. This surprising finding makes it clear that online retailers are under a lot of pressure to get the shopping visit right or be faced with declining loyalty, revenues — and profits as a result.

There are several strategies that retailers can employ to authentically strengthen the customer bond, including the use of first-party customer data, thereby improving the overall shopping experience and increasing transparency:

Provide incentives in exchange for customer data 

With the use of third-party data no longer an option, brands must leverage other strategies to encourage shoppers to provide as much data as they’re comfortable sharing. However, it’s important retailers are also transparent about when and how the data will be used. Our survey found that more than half of respondents (57%) are unaware of how much data they share when shopping online, a percentage that stays about the same across generations. The upside is that consumers don’t seem too concerned about providing personal data when they are rewarded — 52% said that they are willing to share data when shopping online if it means they’ll receive better deals and offers. In other words, retailers need to make it worth their customers’ while to share data. The fact is, shoppers do want better online experiences, but for retailers to deliver what they want, companies need data to personalise the shopping journey. One option is for brands to offer a one-time discount in exchange for opt-in SMS messages. 

Invest in delivering a better overall on-site experience

As consumers’ expectations for a seamless, stress-free and quick online shopping experience reach new heights, retailers are left scrambling to meet these expectations. However, we found that some brands are missing the mark: most consumers (93%) expect their online shopping experience to be better than what they receive while in-store, while 91% said they encounter problems online. Nearly a third cite poor website performance (33%) and lack of product findability (32%) as their top issues, followed by missing product information (27%), disorganised navigation (26%), not being mobile friendly (25%), and too many irrelevant recommendations (24%). Of Gen Z respondents, 96% report encountering problems when shopping online. It’s surprising that in 2023 consumers still face poor website and shopping experiences when AI and machine learning technology exist to remedy these problems. This data shows that many brands are struggling to meet consumers in the middle. To do so, they must devote the resources necessary to ensure their online store is living up to expectations when it comes to performance, navigation, product recommendations and findability. This isn’t money wasted, but an important investment in their customers which builds trust, and in turn, leads to repeat visits and enduring customer loyalty.

Better Communication, Better Transparency

Transparency is a good way to be more customer-centric. The question is how can retailers deliver a transparent shopping experience online?  One way to accomplish this is through consistent communication. Shoppers who spend the time to browse your online store for items they like, then deliberate on whether they like a product enough to click “buy” need to know whether products are available, or whether there are only three left in stock. Brands should prioritise communication about product availability and whether price or shipping discounts will expire soon. And for shoppers who are a little insecure about their choices, providing information that five others just bought the same item by using the social proof tactic might be all it takes to seal the deal. Social proof is an increasingly important method to both inform and encourage shoppers, especially for younger demographics who look to their peers for endorsements and their honest opinions. Our consumer survey confirmed that 45% of shoppers are motivated by customer reviews, recommendations for complementary items or knowing the number of people who bought the same item. Even more shoppers (48%) are motivated by urgency messaging, such as a limited-time discount, number of items in stock, or whether they’ve purchased the item quickly enough to qualify for next-day delivery. 

As inflation continues to weigh heavily on consumers, and with affordability concerns shaping their shopping behaviour, brands can overcome these challenges by delivering better (and less glitchy) online shopping experiences and building customer relationships based on trust and transparency.