Australian consumers are spending their shopping dollars with only a few selected retailers that they trust, according to a study by IBM.
The study looked at the purchasing trends, habits and expectations of more than 28,000 consumers globally, including more than 1800 from Australia.
In 2011 the study found consumers trusted friends and family the most when making a purchasing decision (51%) and trusted retailers the least (3%).
However, in 2012 trust in retailers more than tripled to 10%.
Ian Wong, retail and consumer products industry lead for IBM, says the rise in trust is good news for retailers.
“It is about clear retail communication in all the channels possible and then execution in the promise you have made to consumers from a retailers standpoint.”
“Anecdotally we have seen a much stronger realisation from retailers that they need to engage with consumers, and in an authentic manner.
“We have seen initiatives in engaging in social media and through their own personal website.
“This creates expectation of brand promise.
“Secondly, it is delivering on that brand promise.
“A few retailers have spoken about an omni-channel promise and if they deliver on that trust will increase.”
But Wong says there’s plenty of room for improvement for retailers.
“Consumers have information now from multiple sources they did not have before,” he says.
“Family and friends are empowered in a way 20 years ago that they were not empowered and consumers are using technology in a way not imagined before.
“They are using it to form a view of the offers being provided through the retailers and manufacturers.”
Russell Zimmerman, executive director of the Australian Retailers Association (ARA), says he is heartened to see trust in retailers was increasing.
“It is fair to say that people understand branded names so there is a view that some names are to be trusted,” he says.
“It is being able to build that trust and value proposition and then people talking about.”
Here are the three key ways IBM believes retailers can increase trust.
1. Driving trust through retail communications, being very clear about what your brand message is to consumers.
“Clear and comprehensive were the key factors,” Wong says.
“The message needed to make people want to shop, be comprehensive and clear.”
2. Bringing the value of the merchandise to the consumer through assignment.
“Consumers wanted a range of items and to have them at the right price,” Wong says.
3. Driving perceived value around the product in a clear and concise retail environment then drives satisfaction.
Wong says: “The most important things for consumers were clear labelling and merchandise to be displayed in a way that made sense.
And here are three key ways the ARA believes retailers can increase trust.
1. Retailers build trust by making sure they have a value offer proposition for customers.
Zimmerman says: “I think people have walked past retailers in the past and seen 30%, 50% off stock and that puts in the customers mind, ‘Was it worth that much in the beginning?’ and that is where we see trust go out the window.”
2. Taking stock back and returning it seamlessly when there is a problem and retailers assisting customers.
3. Good service – good news spreads.
Zimmerman says: “There is a story many years ago about the sale of a Lexus. A lady went to buy the car, the salesman did not talk to her about the car but found out she had a favourite musician.
“When the car was delivered there were six CDs of her favourite artist. When she went to a dinner party and talked about it, the next question was where did you buy the car?”