Study finds transparency increases brand loyalty.

We witnessed firsthand by managing our clients’ consumer communications that consumers demand transparency. From product packaging and its environmental impact, to more detailed questions about the ingredients, the source of the raw materials or where our clients stand in terms of sustainability, their consumers want to know it all, so they can make informed decisions when purchasing their products online or at the store.

Transparency matters, and not just to our clients’ consumers, but to an increasing number of consumers out there. But how exactly does transparency drive trust and brand loyalty? How does it influence consumers’ shopping behaviour?

According to a new report(1) released in September 2018 from Label Insight and Food Marketing Institute (FMI), grocery shoppers show loyalty to products that foster deeper relationships via information exchange. “The Transparency Imperative” report found that 75% of shoppers are more likely to switch to a brand that provides in-depth product information beyond what appears on the physical label. This number is going strong. When shoppers were asked the same question in 2016 in a similar Label Insight study, only 39% agreed they would switch brands.

In the report, 86% of shoppers agreed that if food manufacturers or retailers provided access to complete and understandable definitions for all of their ingredients, it would lead to greater trust. Nearly as many shoppers (80%) said they are more likely to be loyal to a brand that offers more information than what’s on the physical label. More than half of shoppers (54%) are even willing to pay more for a product that provides more information.

“The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally minded consumer,” said Doug Baker, Vice President, Industry Relations at FMI.

Key findings include:

  • The vast majority of consumers (69%) said it’s extremely important or important that brands and manufacturers provide detailed information such as what’s in their food and how it’s made.
  • Health-conscious shoppers are even more likely to value transparency: 61% will pay more for products offering in-depth product information, compared with 54% of general shoppers.
  • Shoppers with children are more likely to place greater importance on ingredient information, nutrition and health benefits. They were also particularly likely to find value in accessing detailed product information in-store on their smartphone (87%) and to use this method (85%).
  • Online grocery shoppers expect more product information (76%) when shopping on the web than in a physical store, and 72% think that getting product information is even more important when shopping online. Additionally, 81% are willing to switch to a brand providing more in-depth product information, versus 75% of general shoppers.

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While this report focused on brands in the food industry, the desire for transparency is a growing consumer trend across all industries. Consumers always look for information at various stages of their buying journey. If a brand is not transparent and/or the information provided insufficient, they will ultimately try to get that information elsewhere, and many shoppers turn to the Internet to seek out answers. Nowadays, companies are not only expected to be transparent about their products or services, but also about their values.

Stories are a powerful way to cut through the noise and communicate transparency messages in a compelling way that will capture people’s attentions. For a fundraising organization for example, shifting the story from how much money was raised to how the money was spent will speak volume to their donors because they want to know where their contributions went and what difference they made. For a food company, claiming that their products are sourced responsibly is no longer enough. They have to demonstrate by showing where the food comes from and how it is produced.

Phony advertisements are a thing of the past. To build trust and loyalty, honesty is the way, making transparency an essential attribute of any brand.

(1) The research is based on an online survey of a random sample of 2,022 U.S. grocery shoppers who are 18 years of age or older. The research was conducted via an online nationally representative sample from May 15 to 22.

Click here to download a copy of the report.

Source: Food Marketing Institute.

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