by Renaud Marlière, Global Chief of Business Development of Asendia
Your customers will spend more and more often with you if they believe you are authentic, the latest research suggests. But what does this mean and how can brands and retailers demonstrate it right through the buying journey?
Retailers and brands have been called on to demonstrate authenticity in their relationships with their customers for over four years and it was a major topic at the National Retail Federation’s Big Show in New York back in 2018. However, while the term is now in common parlance, its meaning and its application are not always well understood.
Authenticity is defined as how a shopper perceives a brand to be faithful to itself, its customers and to the wider world, and is the basis on which shoppers trust them. This trust is lost when a brand looks as though it is trying to be something that it is not. To a greater or lesser extent, most brands recognise the importance of honesty in their dealings with customers and the wider market, but authenticity is elemental in the entire engagement, from browsing to buying and to returns in terms of marketing, order management, delivery and all associated customer engagement.
Getting this wrong, either in terms of sentiment or in execution, can have a significant negative impact on sales and repeat business, something of real concern to companies that recognise the importance of loyalty. It is estimated to cost around five times as much to acquire a new customer as it costs to keep an existing one, so clearly authenticity has a powerful commercial imperative, particularly where shoppers will pay a premium for goods from companies they perceive as authentic.
What consumers expect in an authentic brand relationship is delivery on promises made, transparency in the supply chain that fulfils orders, a visible commitment to sustainability, and fair treatment of suppliers.
In our recent research of over 8,000 global shoppers in the US, UK, Canada, Germany, France, Switzerland, Hong Kong and Spain, we uncovered some interesting insights into what shopper behaviours are influenced by authenticity.
The research in our latest report shows that authenticity counts. 73% of respondents said they were more loyal to brands and retailers who they believe are authentic. There are regional variations; the highest figure was Hong Kong at 83% and lowest in Switzerland at 62%.
When it comes to money, 66% said they spend more with brands and retailers who they believe are authentic. In Hong Kong this rose to 80% but was only 52% in Switzerland.
This then translates to choice of where to shop. 59% said they will only exclusively shop with brands and retailers who they believe are authentic. In Hong Kong this was 75% but only 52% in Switzerland. By extension, consumers will often shop less with a retailer if they weren’t authentic. In the UK, for example, three quarters (75%) would shop less.
Authenticity is generally more important to older audiences, however, younger audiences feel brands that sell Direct To Consumer (DTC) deliver more authentic online brand experiences, and are more likely to be involved in these because they are using more channels, particularly social media.
Consumers were then asked what they thought brands and retailers could do to be more authentic, and this reveals what strategies retailers can put in place to win and retain more business. The top finding was making sure that brands are straightforward on delivering their promises to customers at 58%. Despite greenwashing hitting the headlines lately, only 25% felt this was important.
Brands looking for role models of authenticity need look no further than Ikea. Overall, IKEA is seen as the most authentic brand at 41% averaged across multiple countries, while second place globally was Amazon.
A key lesson that came out of the research was the fact that shoppers will not choose brands on authenticity alone, and will expect good service across a number of areas, most notably delivery, quality product ranges, value for money and personalisation in communications and service. In the research, Amazon was the overall winner at 69% in the US, UK, Germany, France and Spain, while for Switzerland it was Ikea at 40% and Apple in Hong Kong at 42%.
When it came to key preferences for having goods delivered from other countries, fulfilment and authenticity are linked. While the priorities are – understanding where my product is being shipped from so I understand the cost and distance the product will need to travel to reach me (33%), and preferred returns method (Paperless, drop off box, collect, postal office, in-store) are available (32%) – consumers also rated grouped deliveries – so there is less packing waste/products are delivered in one go, rather than across multiple individual deliveries (32%), emission-free deliveries (delivered by bike courier or autonomous deliveries) (13%), and Electric Vehicle (EV) delivery options (11%).
These sustainable elements then rise up the priority list for consumers as they look ahead over the year. 40% wanted deliveries using only reusable packaging, 30% wanted 100% carbon neutral deliveries.
Every company has its own identity and every company is on a different stage in its journey to authenticity, but it is clear that shoppers put a high value on this quality in every aspect of their relationships with their favourite brands, and it must now be included as companies develop new products and services, channel presence and country operations.