In light of current global crises, trust is set to be the new currency of business.
As the adage goes, ‘hard to earn and easy to burn’. Consumer confidence can be in abundance or worryingly elusive, depending on how you play your cards. For successful organizations it can ease buying behaviors, grow loyalty, and bolster company equity, helping with both reputation and the bottom line.
Yet with all these benefits to building trust, why do 78% of consumers have no confidence in big brands?
Using data from our Core survey and Zeitgeist data from September 2022, we’ll look at the global landscape of consumer trust to answer the following questions:
- What does trust in organizations look like today?
- What’s causing this dip in consumer confidence?
- How important is earning consumers’ trust?
- What can brands do to remedy the problem?
What does trust look like for consumers today?
The past few years have created a challenging landscape for businesses as they navigate high inflation, interest rate hikes, European conflict, and political instability. These crises have left a wake of growing skepticism; putting pressure on global trust, and placing brands under the microscope.
It’s why our data suggests no sector has taken to strengthening public confidence this past year. Organizational trust declined by 7% across the board while none of the industries we tracked made positive ground.
The job of mitigating inflationary pressures and calming financial markets has placed banks and governments under great scrutiny. With people growing anxious about the cost of living and their own financial stability, both of these institutions have experienced losses in consumer confidence. The biggest shifts can be found in Europe where banks in the UK, France and Germany saw double-digit losses in consumer trust, while confidence in the UK government dropped 42%.
Elsewhere, media companies like social networks and news platforms are also battling mounting distrust. Online data security is a major cause for concern – likely due in part to data leaks – while misinformation has also become something of a talking point in recent years. Social media has become an important source of information; keeping up with news ranks among consumers’ top reasons for using these services but only 15% of people say they trust these services. That means conversations about regulation and content moderation are needed if these kinds of platforms plan to cultivate trust among users.
For big brands, they too have had sector-specific issues while being under similar global pressures. Given trust is typically lower among consumers in Europe, the biggest declines in brand trust over the past year occur in markets like France and Germany (-30% in both). The situation is more positive elsewhere; consumers in India and Brazil, for example, are far more trusting of big brands. It’s worth noting, however, that these markets are largely more trusting in the first place. Nevertheless, global trust still rests at just 22%, meaning there’s certainly work to be done.
The pressure on brands is mounting. Rising prices are top of consumers’ immediate concerns (40%), higher than worries over their personal finance (31%). The task of balancing affordability for consumers and brands’ own market competitiveness will likely play into the direction consumer trust takes in 2023.
What our data makes clear is that the global landscape has become less trusting, meaning all brands face cynicism when it comes to people engaging with, and buying from them.
What issues influence consumer trust?
Causes of declining consumer trust are often challenging to pinpoint as in most cases, there is no single driving force, but rather multiple factors when it comes to shifting consumer sentiment. Nevertheless, our data helps us spot recurring problems that businesses would do well to prioritize.
1. Online Data Security
Data security is a key issue for consumers. Nearly 8 in 10 do not feel in control of their personal data online, and an additional 38% say they’re extremely concerned about it.
When it comes to who consumers trust to protect their data, governments and financial institutions are thought of most (37%), compared to media services where consumer confidence is much lower (10%). These figures are similar to who consumers say they trust in general, so it’s understandable that data privacy and protection likely plays a defining part in their confidence concerning larger institutions.
A problem for social media and news services is that misleading information has consumers questioning the validity of the content they see online. A little over a third of people say they do trust the news, but our data helps shed some light on this elsewhere. Fewer people are researching products online or looking for expert opinions in general. There’s also been a decline in the number who like to know what’s happening around the world – a potential side-effect of the growth in misleading content online.
50% of social media users say misinformation is by far the leading source of frustration.
In this new climate of growing media skepticism, companies are going to have to place more thought on how they cut through the waves of unsubstantiated claims online. Examples include Twitter’s Birdwatch initiative, or Meta’s partnership with the WHO that began labeling posts about Covid-19 with disclaimers. They’re small steps, but these measures could become more commonplace as the issue of misinformation grows.
3. Misleading ESG paths
Shoppers are increasingly tuned in to the world’s social and environmental hurdles, and this growing sentiment means there is an expectation for brands to take a stand too. As of Q3 2022, over 4 in 10 consumers want brands to be eco-friendly or socially responsible.
Yet while some businesses have roadmaps and initiatives in place to meet these environmental, social and governance requirements, many are missing their targets. Unsurprisingly, this has a huge impact on consumer trust – and a brand’s reputation in the process. In a Zeitgeist study from March 2022, a little under half said they would be discouraged from buying brands with false environmental claims, while 1 in 5 said the same about the lack of employee diversity. We’ve noted in the past that brands who can’t live up to their claims will lose out big time, and that’s still the case today. Brands that remain committed to their pledges will find themselves in better standing with consumers.
How does this affect brands?
Brand trust plays an increasingly larger role in consumers’ purchase journey. Beyond quality and cost (the biggest influences on a purchase), having brands they can trust (32%), that come with positive reviews (31%) and good reputation (31%) are the next leading incentives for consumers when deciding who to buy from.
On top of that, shoppers see these factors as more important than brand familiarity or convenience, meaning businesses that fall short here could be at risk of losing consumer trust they’ve worked hard to build.
How do brands gain trust?
More than 50% of consumers see quality as the most important factor when it comes to trust, while reliability is second to none when it comes to what they want from brands.
There are some good cases of brands who do both well. Take the LEGO group – well known for good service, quality, and innovation when it comes to their products. For every brand doing it right, however, there are those falling behind. Parcel companies have been heavily scrutinized in recent years for shortcomings regarding reliability. With this in mind, businesses would do well to pull back on the bells and whistles and instead, double down on reliable, quality products to maximize consumer confidence in order to keep them coming back.
With the exchange of personal information more commonplace than ever, the reassurance of data protection and online security from businesses is paramount. As Google’s strategist, Neil Hoyne, puts it, “consumers are okay sharing data, but the first issue is that they want to have trust in the brand they’re sharing that data with.”
For brands, clarity and user confidence should be synonymous with the handling of data.
Half of consumers want a clear understanding of how their data will be protected, 49% want assurance it won’t be shared to 3rd parties and over 4 in 10 say they want to be completely anonymous. Large-scale businesses are making some headway on better protection measures, as brands like Apple ramp up end-to-end security on their devices, and Samsung extend personal security features into their mobile’s privacy dashboards.
Lastly, a new age of shoppers has raised the bar when it comes to environmental and social expectations. For brands, this doesn’t have to mean saving the world, but being transparent and honest about their contributions.
Over 4 in 10 consumers look for businesses that show authenticity and that means clear communication. Ganni – a Swedish clothing company – is upfront about its environmental responsibility, while the likes of B Corp and other accreditations authenticate brands acting as a force for good. For those looking to build trust with younger audiences in particular, this area is really important. Gen Z are 23% more likely to decide who to buy from based upon their actions against climate change and 26% more likely to go for brands who support social justice.
Scoring consumer trust in 2023
The downward trend of consumer confidence, if left unchecked, could inflict considerable damage on a brands’ reputation. This is a problem for all businesses, particularly with the current economic conditions. Those who can act and back up their claims are better placed for building customer trust, while those lagging behind could soon find themselves in hot water.
Consumers will look to brands who respond to their uncertainty with reassurance, authenticity, and reliability, while brands that spend time and resources identifying the causes of consumer angst will be most prepared to deal with customer trust issues in the future.