A survey of retail and consumer packaged goods executives working for large, global companies identifies consumer trust and loyalty as prerequisites for growth. This assessment is noteworthy given that consumer trust in many of the food and beverage industry’s largest companies is low.
The survey’s release is part of the Consumer Goods Forum’s annual Global Summit that took place in Berlin the week of June 19. The data are based on responses from 526 consumer and retail executives working for global companies with sales of at least $500 million, and 74 per cent said customer trust and loyalty is “very critically” important to their short-term success. Thirty-six per cent said earning consumer trust and loyalty is their No. 1 priority.
A majority of the consumer and retail executives responding to the survey said they are looking at technology to improve the customer experience. They are using some of the more familiar technologies such as social media, mobile apps, e-commerce/digital payments, and mobile commerce/wallets. Looking ahead, the adoption of newer technologies like artificial intelligence will remain still low. Only a third of respondents said they will invest in such technologies over the next two years. However, 41 per cent of those who plan to adopt artificial intelligence said the primary motive will be to improve customer service as a way of predicting consumer behavior and preferences.
Of concern to larger food companies is the level of distrust consumers have for such businesses. A survey conducted by the consultancy Deloitte in 2014 found that consumers are 3.4 times more likely to have negative perceptions about food companies than larger companies in other industries. A survey of food industry executives published by Deloitte in 2016 showed concerns about trust were overwhelmingly reflected during interviews, with most executives saying the issue of trust represents a growing challenge.
Many consumers participating in this year’s International Food Information Council Foundation’s Annual Food and Health Survey listed “a food company or manufacturer” last as a “trusted source about which foods to eat/avoid.” In addition to such appropriate options as registered dietitians and health care professionals, bloggers, friends and social media were cited as more trusted sources of information.
A lack of trust by consumers is not a new issue facing larger food and beverage companies, but competition and market fragmentation as it relates to where food is sold and consumed means that being perceived as trustworthy and reliable is critical.
Executives responding to the Consumer Goods Forum survey cited the use of data and analytics generated by using artificial intelligence and social media as tools to develop relationships with customers. Such information may help managers better understand the influences that attract consumers to specific brands and products, and earn their loyalty over time.
Peter Freedman, the managing director of the Consumer Goods Forum, writes in the survey’s final report that consumers want instant gratification as well as a narrative or story behind the products they buy that resonates with them. They are looking for authenticity.
From the perspective of food and beverage manufacturers, authenticity is a vague term. Yet it is clearly the apex of the long-term relationships companies are trying to build with their customers, and earning the designation of being authentic may be a key to growth for some companies.