If the ultra-competitive retail marketplace didn’t pose enough of a challenge, now B2C brands must also adapt to shifting power dynamics. Today savvy shoppers demand safer products and more detailed product information from consumer goods companies and retailers.
Consumers’ – particularly millennials’ – desire for organic, fresh food, and conscious capitalism means shoppers are more vocal than ever about knowing exactly what they’re buying and where it comes from.1Swartz, Leah. How radical transparency is changing the retail market. The Business Journals. January 25, 2016. 2Total Retail Survey 2016. PwC
Consumers’ high expectations for information sharing have made transparency an urgent business necessity for consumer goods and retail brands. The good news? Transparency presents a massive opportunity to clearly distinguish your company and boost brand awareness.
Why transparency matters
Today’s consumers want to feel good about the products they buy and the companies they support. And transparency plays a big role in that, from disclosing information about your company and products to telling true stories about your brand. It demonstrates open communication and helps to build meaningful relationships with consumers.
As a result, transparency can differentiate your company as honest, authentic and socially-conscious – qualities that build brand trust. In turn, trust can increase your sales, loyalty and lifetime value per customer.
Proven business benefits of transparency
More than half (55%) of consumers say having “transparent and open business practices” builds trust in a company. Trust in a company makes consumers more likely to buy their product (68%), recommend them to a friend or colleague (59%) and even pay more for a product (37%).3Transparency and trust: The risks and opportunities of content marketing. The Economist Group. February 19, 2016.
Today’s consumers want to feel good about the products they buy and the companies they support.The pervasiveness of digital and social media has forced brands to be completely open about their sourcing, production and pricing. Now transparency is essential, as 33% of millennials review blogs before they make a purchase.4Swartz, Leah. How radical transparency is changing the retail market. The Business Journals. January 25, 2016. “Companies are under pressure from consumers… Trust can be lost at the click of a mouse due to online conversations,” says advisor and transparency expert John Keogh.5Pellegrini, Megan. Public demands what feds suggest: Traceability via food labels. Food Safety News. March 7, 2016.
Transparency is far from a fad in retail. In their Retailing 2020 report, PwC notes, “Consumers will expect and demand an element of trust and reciprocity in their relationships with retailers, [including] increased information flow.”6Retailing 2020: Winning in a polarized world. PwC Companies already recognize the business case for transparency, as 83% of Fortune 500 companies said transparency impacts consumer confidence and buying behavior.7Morrison, Chris. Supply Chain Transparency Linked With Consumer Buying Behavior in Recent Research. Trace One. January 22, 2015.
Leaders in transparency
The following organizations stand out for their transparent communications with consumers:
- Everlane: This online retailer is so committed to openness that its tagline is “Radical transparency.” Everlane’s business model fully embraces information sharing, disclosing such details as where its products are manufactured, product costs, company profits, and both positive and negative customer experiences.8Linn, Michele. 3 Ways to Use Transparency in Content to Cut Through the Noise. Content Marketing Institute. March 1, 2016.
- Whole Foods Market: This retailer has committed to becoming the first national grocery chain to set a deadline for full genetically modified organism (GMO) transparency. By 2018, Whole Foods’ suppliers must clearly label products containing GMO ingredients.9Hanley, Charity. Retail Horizons: Will growing transparency slow consumer buying? GreenBiz. September 22, 2014.
- Grocery Manufacturers Association (GMA): To improve customer experience through transparent product information sharing, the GMA initiated the Consumer Information Transparency Initiative. Its SmartLabel program allows consumers to scan a bar code to access a product’s ingredients, nutrition, allergens, advisories and brand information.
How to demonstrate transparency
Since only 31% of consumers think companies are transparent enough, your company can turn transparency into a competitive advantage to stand out from rivals.10Transparency and trust: The risks and opportunities of content marketing. The Economist Group. February 19, 2016. Start with these tips:
- Label products clearly: On your product packaging and in marketing materials, disclose such information as ethical and health considerations, ingredients, and how or whether animals were used in product testing.
- Use your digital presence strategically: Owned media (including corporate websites, blogs and newsletters) is now trusted as a source of news and information by 46% of the general population – more trusted than social media.11Transparency and trust: The risks and opportunities of content marketing. The Economist Group. February 19, 2016. Use your online content to differentiate your B2C brand and boost consumer confidence by telling true stories about your company and products.
- Encourage dialogue: Share what consumers think about your brand, including both positive and negative reviews. It proves you care about shopper feedback and that you are willing to continuously improve customer experience.
Turn honest communication into a competitive advantage for your B2C brand by committing to transparency. By embracing a business model built on openness, your company is more likely to earn consumers’ trust and loyalty.