Eroding Customer Trust in Retailers

[vc_row][vc_column][vc_column_text]In this article, we will:

• Discuss customer trust as the key element in building a brand
• Reasons why customers’ trust is declining in the retail industry
• How can retailers build trust and lasting relationships with their customers

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Customer Trust- The Key Building Block of a Brand

A brand is nothing without the trust of its customers. It is what builds the brand from the ground up, and the survival of a brand depends on the trust its consumers have in it. One bad experience can make the customer lose interest in the brand, and if that happens, it’s game over. 

Then why, if customer trust is so important, are retailers losing it so rapidly?

Eroding Customer Trust in Retailers

Over the recent few years, we have seen a decline in customer loyalty in the retail sector. Where people used to be very devoted to their brands, we see consumer perception shifting quite a bit now. Let’s explore the reasons behind eroding customer trust in retailers. 

Shrinkflation

The world economy saw a major collapse during and after the Covid19 pandemic. As businesses struggled to get back on their feet, they had to do something different than simply raise prices to meet the unprecedented fall. As a result, “shrinkflation” rose. 

Shrinkflation is the rise in the prices of goods with a simultaneous reduction in their weights. To put it simply, consumers are now paying more for much less. 

The retail customer experience was greatly affected by shrinkflation, with the average retail customer now concerned less with the brand name. According to EY’s research, 62% of respondents now have lessened regard for fashion trends and would rather go for private labels. 

Rising Cost of Living

With things worth much more and no increase in wages, the cost of living rose dramatically after the pandemic. As people struggle to have their basic needs met, the finer things in life such as brands and luxury take a back seat. 

Amidst the difficult times, consumers may not have expected their favorite brands to hike prices and add to their figurative or perhaps literal suffering. The hurt sentiments may have been a major reason behind the decline in customers’ trust. 

Poor Data Ethics

According to Performance Marketing World, 75% of US and UK retail customers do not feel comfortable buying from companies with poor data ethics. Collecting information in the form of cookies and app permissions, tracking consumer activity online, and displaying targeted ads may have helped the brands, but at the same time eroded consumer’s trust. People feel violated as their privacy is compromised.  

Technology

Technology is another leading factor contributing to eroding customer trust in the retail sector. Nowadays, people look for everything online. The EY Future Consumer Index states that nearly half of (46%) consumer respondents rely on technology to manage their daily lives. Especially before making purchases product and service reviews are looked for and decisions are made based on the same. Poor reviews and negative word of mouth can make consumers less loyal even when they haven’t had any bad experiences. 

How to Build Customer Trust

There are ways you can rebuild your customers’ trust in yourself. 

Have a Good Product and Believe In It

The first step to having your customers trust you is to have a good product. You cannot be selling something that is not on par with their standards, and expect your customers to trust you. And if you know you have a good product, you need to believe in it. Your customers won’t believe in the product’s capabilities if you don’t. And only if you believe in your product can you convey the same message to your customers. 

Be a Listener and A Problem Solver

Having a great product doesn’t mean it is the perfect product. Now and then, people may have issues using your product. It is important to not get defensive about your product or service but listen to the customer. And listen to them actively, see where they are coming from, and try to solve their problem the best possible way. Not only will this make them trust you, but also serve as a good source of feedback. You will know what parts of your product needs improvement. 

Have Values and Stick to Them

You should have a set of company values and morals. These values should be reflected in your actions. Your actions should not veer off this set of values, for then you will project an image of hypocrisy- and no one trusts a hypocrite! 

Embrace Transparency

Be as transparent with your customers as possible. The basic foundation of trust is honesty, and when you are honest with your customers, it will help you build trust and lasting relationships with them. 

Wrapping it Up

Poor retail customer service, recession due to the pandemic, shrinkflation, and rising cost of living are the major reasons behind eroding customer trust in retailers. However, by being vigilant and taking timely corrective actions, you can restore your customers’ trust in you and continue to build enduring relationships. [/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”344″ img_size=”full”][/vc_column][/vc_row]