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Patrick Moorhead

By: Patrick Moorhead on September 18th, 2018

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The State of Transparency - 2016 vs 2018

Transparency  |  Study  |  FMI

“Three quarters of shoppers in 2018 would switch brands for transparency - a 90% increase from 2016 ” —  FMI / Label Insight The Transparency Imperative 2018

Tipping Point? Shopper loyalty hinges on transparency

 

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Is the equivalent of Malcolm Gladwell’s digital tipping point finally arriving in the Grocery industry? Other industries have been upended by the digital revolution, and the grocery retail industry appears to be next in line for digital transformation. This disruption is characterized as being “the era of customer experience,” where brands are required to “chase customers with content and design so the brand experience is personal and memorable”. Those few that succeed in delivering excellent customer experiences with data driven marketing are truly setting themselves apart today.

 

“There is a simple way to package information that, under the right circumstances, can make it irresistible. All you have to do is find it.” -Malcolm Gladwell

 

Transparency Tipping Point?

A new study from the Food Manufacturers Institute (FMI), in partnership with Label Insight, shows a dramatic change in consumer attitudes towards Transparency. The Transparency Imperative 2018 shows that 93% of consumers continue to say it’s important for brands and manufacturers to provide detailed information about what is in food and how it’s made. But there has been a dramatic increase (74 percent in 2018 compared to 39 percent in 2016) in the number of shoppers who say they would switch from the brand they usually buy to another brand that provides more in-depth product information, beyond what is on the physical label.

Despite many consumers saying that they are generally informed after reading labels, and more consumers than ever taking the time to read label information, about two-thirds of shoppers sometimes or always find themselves confused.

Having a complete list of easy-to-read, plain English ingredients is the clearest indicator for consumers that a brand or manufacturer is being transparent, followed by in-depth nutritional information. In addition, roughly a third of consumers also value other indicators, including allergen information, details on how products are produced, and information on how ingredients are sourced. In fact, the great majority of shoppers want more information than appears on product packages. Many feel they know where to look for this additional information, such as web sites or apps, with over three quarters of shoppers reporting that they are very or somewhat likely to access more information about a product on their smartphone or other device.

 

“Driving digital transformation, which is intrinsically linked to creating a customer experience, requires the orchestration of numerous moving parts.” Adobe Digital Trends Report 2017

 

Making use of the findings:

The dramatic increase in shoppers who say they are willing to make a switch from their usual brand to the one that provides more in-depth information than appears on the label should be a flashing beacon to brands across the industry to take transparency seriously. The potential to impact trust and loyalty around products is fundamental to success looking forward.

There’s a clear opportunity for brands to take leadership roles and increase existing market share by better serving the demand for transparency. There is also an opportunity to create and capture new and profitable market niches as is indicated by the finding that nearly half of shoppers are willing to pay more for a product that offers in-depth product information than what is on the physical label.

How does a brand respond to the disruption and opportunity especially when, as Adobe states in the Digital Trends Report 2017, it “requires the orchestration of numerous moving parts”. This new report points to a number of possible next steps for brand owners. Here are five worthy of serious consideration:

  1. Embrace Transparency: The findings show that transparency from brands has a direct impact on building consumer trust and boosting loyalty. Companies should recognize this direct connection and communicate the importance of transparency throughout their organization and to stakeholders.
  2. Go Beyond Ingredients: Ingredient information is essential for transparency. However, brands and manufacturers need to commit to providing even more information to meet the increased expectations of consumers. This includes information on allergens, how products are produced, and how ingredients are sourced.
  3. Play to multiple audiences: Transparency is not one-size-fits-all. It plays out differently by consumer generation, and based on demographics that include education and the presence of children. Brands have a responsibility to better understand the needs of their audiences and develop suitable strategies.
  4. Ensure a good online experience: Consumers highly value the opportunity to get transparency information online, including through smart phones. However, they also have higher product information expectations online than in a physical store. Brands and manufacturers should make sure they are meeting these expectations, rather than frustrating consumers who are seeking robust levels of information.
  5. Track Changing Consumers: Shoppers will continue to change and the transparency bar is likely to be raised. Brands should monitor consumer behavior shifts and make quick adjustments and strategic shifts as needed.

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About Patrick Moorhead

Chief Marketing Officer