While it is widely known that trusted customers engage early and are loyal and strong advocates, most organisations and leaders have low trust literacy.
This means there is no shared understanding among organisations of what defines trust, how brands design for trust management, or what new sources of trust does technology unlock for retailers. The professionalisation of trust is in its infancy. This lack of trust literacy is a growing area of opportunity for innovative retail leaders as it becomes an explicit priority in corporate strategies.
Competing on trust is an emerging opportunity for brands vying to provide unique value for customers.
Building trust intensity
New research from the Queensland University of Technology (QUT) and Cisco explores how retailers can thrive in today’s economy by building trust-intensive environments. Informed by interviews with executives from various national and international retail organisations, the research discusses how technologies can shape trusted customer engagements and how designing trust clarity informs strategic trust options for operations and customers.
When tangibility disappears, trust intensity increases. Trust is ultimately the degree of confidence of a customer with uncertainty. For example, will a product ordered online arrive in time? How likely is it that a sales assistant provides benevolent advice? Trust management can be broken down into reducing uncertainty and building confidence in various ways.
In this way, trust can be considered much like profit. There are two buttons to drive profit: reduce costs or increase revenue. To drive trust, the two buttons are: reduce uncertainty and increase confidence.
The typical grocery customer only buys one per cent of all product offerings. Imagine a world in which retailers know better than their customers what they enjoy from a range of products that often exceed more than 20,000 items? This would cover continuous replenishment and provide a selection of items that the customer is not aware of but very much enjoys. Such an experience would be similar to music streaming services where the provider has a better capability than the customer to select the next song.
This key differentiation from core trust is extreme trust, where a customer trusts a retailer to know them better than they do themselves.
There are pockets of extreme trust in niche areas such as wine subscriptions or beauty products. A high-scale approach to extreme trust within the grocery sector has not occurred yet.
Making trust tangible
Retail leaders have shifted their views on the role of trust. No longer is the management of a trust crisis the focus. Rather, trust is seen as a source of competitive advantage, and time-to-trust is a new metric in the race to be the most trusted retailer.
Leading retail companies want a more direct operational approach towards trust and how it translates into the digital sphere. The intangibility of trust requires that retailers identify alternative types of trust persona and develop trust strategies tailored to each of these.
The importance and challenge of extreme trust for retailers is making the intangible tangible. How do retailers provide online shopping experiences that are as trusted and tangible as a real-world experience? For example, customers are happy to purchase cereals and other basic products online. However, they are not comfortable trusting someone with selecting their meat or fresh produce; there’s still the experience of smelling stone fruit in summer.
That said, building trust-intensive environments can benefit retailers. One of the impacts of Covid-19 on retail has been to drive customers to the online experience. According to QUT professor Gary Mortimer, one of Australia’s largest grocery brands grew their online shopping from 2.5 per cent to seven per cent in one year, with people more likely to trust the retailer with their shopping than risk attending a supermarket in person.
While trust has been a background metric for many companies, bringing trust to the forefront will be a game-changer. Trust is quickly becoming a new dimension for retailers to consider when expanding offerings and services.
There is an opportunity to do with trust what happened with risk three decades ago: a rapid professionalisation. This professionalisation of trust will go hand-in-hand with new forms of trust governance and the emergence of entirely new roles. This might mean that retailers will soon seek to employ trust designers or trust architects, or like some global tech companies, even consider establishing a Chief Trust Officer to oversee the organisation’s trust strategy.