how consumers are reclaiming their power and why they’re prioritizing transparency
What you’ll learn:
- Consumers are OVER misinformation and disinformation. In an annual measurement of consumer trust, skepticism rules the day.
- Apple is about to hand consumers more power over their own data. Is the era of micro-targeted ads over?
- Achieving gender equity serves more than good PR. It provides a competitive advantage, and many companies still don’t approach it holistically.
Verde Consumer Behavior Report - april 28, 2021
Consumers have been on a yearlong tilt-o-whirl of dizzying and ground-shaking events. What’s the first thing you do when you step off the roller coaster? You ground yourself and you re-find your footing.
That’s what consumer sentiment is saying this week: We’ve had a crazy year of upheaval and we’ve done some thinking. We know who we are and what we want.
This week, consumer confidence takes on a double meaning. Consumers have spent the last year (just like all of us) reflecting on their personal values and expectations. This type of soul searching wasn’t driven just by the pandemic. It has been at once a tragic and illuminating year for racism in our society, politics, division and economic inequity.
Read on to learn how consumers are reclaiming their power, and why they’re prioritizing clarity and honesty -- from everyone right now.
This Year’s Consumer Trust Index is Sponsored by Skepticism
According to Edelman’s annual Trust Barometer survey, the technology sector is on a downward spiral for consumer trust. Though tech as a whole remains in relatively strong consumer esteem (the 70th percentile), the 10-year trend for consumer trust is pointing decidedly down. It’s the biggest loser over the decade of reporting, including a 6-point drop from 2020 to 2021 alone.
Other observations:
Of the 16 sectors measured by Edeleman, only one is firmly in the “not trusted” category: social media. There’s a growing awareness about misinformation and disinformation that is amplifying consumer skepticism from most sources.
Who do consumers trust the most right now? Business and local employers.
Among government, media, and NGOs, business is the ONLY institution that is viewed as both competent and ethical.
Consumers feel an urgency to address foundational problems, such as: health care, poverty, climate change, and racism.
Consumers are looking hyper-local for leadership, via their peers and their employers. Information from “employers” is more trusted than that coming from government, national media, advertising, and social media.
In the bigger leadership picture, only scientists come in on the plus side. Trust is low--and declining--in government leaders, journalists, religious leaders, and CEOs.
Paradoxically, consumers expect business and CEOs to lead where other entities are dropping the ball.
68% of consumers believe CEOs should step in when government doesn’t fix a problem.
66% want CEOs to lead on change instead of waiting for government action.
65% believe CEOs should be accountable to the public, not just boards and stockholders.
86% want CEOs to publicly speak out on societal issues.
Our take for business and consumer trust today: Consumers place the most trust in organizations that are honest and protect the integrity of information. In 2021, this is the most reliable way to earn consumer trust.
Privacy is About to Blow Up Your iPhone
NPR reports that over the next few weeks EVERY app on your iPhone will be required to ask for permission to use, track, and share your data. Users will make the choice to allow data sharing or not.
Regardless of consumer choice, the app will still be required to perform the same way (for its stated purpose). In other words, if you opt out of data sharing, an app cannot give you a downgraded experience.
As you can imagine, this puts a big dent in the revenue models for most of the free apps out there. Notably, it’s a continuation of the not-so-silent and brewing war between Facebook and Apple. Most of Facebook’s revenue comes from ads, which are targeted to individuals by the harvesting of their data.
While this is a huge win for consumer privacy, it’s likely not entirely altruistic on Apple’s part. Facebook is asserting that Apple is attempting to push app developers to subscription revenue models, which don’t need to rely on selling user data. If that’s the case, Apple makes a cut on each of the subscriptions.
Our take: On a personal level, don’t ignore or delete the barrage of app notifications that are about to blow up your phone. No word yet on how clear and consistent the data permission requests will be. On a business level, if you’re not already actively reviewing your social and digital ad strategies, it’s time to map out potential evolutions.
Department Stores Poised for Strong Summer
As reported by Footwear News, JP Morgan hosted its annual Retail Roundup this month and is predicting eight soon-to-be winners from the anticipated pent-up enthusiasm (ahem...demand) to spend.
The magic eight are: Macy’s Inc., Kohl’s Corp., American Eagle Outfitters, Inc., Abercrombie & Fitch Co., Gap Inc., Urban Outfitters Inc., Burlington Stores Inc., and Ross Stores Inc.
Honestly, we did not see that coming. The demand seems to be driven by sportswear/athletic and home categories. Recent upticks in non-athletic clothing and shoe brands, plus luxury, fine jewelry, and handbags indicate a general excitement to shed the sweatpants and dress up again.
Our take: Though department stores are not the typical venues for the specialty brands in our markets, the underlying message is that consumers are getting excited for an in-store shopping experience again. Case in point: Kohl’s, Burlington and Ross made the news over the past year because they didn’t have a strong online presences. And now they’re on the hot list? We believe it’s due to the patrons that appreciate these stores for the thrill of discovery -- of a brand, a specific product or a great deal.
In specialty markets, start planning now for options to create truly exceptional in-store experiences. Safety will remain a priority, but what are other ways you can show appreciation for your consumers that highlight excitement and not just caution? Events will slowly start to return in a safe way, too. Time to start brainstorming creative, outdoor (or socially distanced) events that will re-welcome consumers back into your community.
Gender Equity is a Choice That Must be Nurtured
“Unless men embrace their role in eliminating gender bias and barriers, organizations and institutions will never leverage the value that women bring to the workplace.” So begins an article in Harvard Business School Working Knowledge.
How is this aspect of DEI related to consumers? Women make the majority of household buying decisions, and indeed, actually make the vast majority of purchases. It follows that women in leadership positions not only contribute to a more well-rounded organization, they also provide a competitive advantage through varied life experiences.
Even so, Harvard researchers have found that despite good intentions for gender parity in the workplace, many companies are unaware of their own structural and cultural barriers to achieve it. The short article is worth a read to improve practices around seven aspects of building a genuinely equitable opportunity and experience for men and women. (The article does not address non-binary individuals, but the framework applies.)
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