For many CPG brands, shopper decisions in the past have been based on elements like convenience, pricing, or their personal tastes. With the right market research, it was easy for brands to fully drive their message and appeal to their target audience. However, the digital revolution has bred a new kind of shopper, one that educates themselves on what they’re buying and who they’re buying it from. Industry insiders and trends in consumer behavior now point to a new driver for purchase decisions — brand transparency.
What Is Transparency?
Transparency refers to the open availability of information from a brand about itself and its products or services. Shoppers want information not only while they’re conducting research, but while they’re in store. They expect the information to be readily available so they can make the best decisions for themselves and their families. Shoppers want transparency about ingredients first and foremost, especially with regard to nutrition, allergies, intolerances, and sensitivities. But they also expect to learn about corporate values and activities, to get insight into the heart of how a company works, and see the human face behind the products they buy. The younger generations, in particular, want to know that what they buy is traceable, sustainable, and ethically sourced. This applies to producers as much as it applies to retailers.
Transparency in Stores: Guiding Stars
The Guiding Stars program puts in-store labeling and signage next to food products to help shoppers understand the nutritional value of each item and is currently being used in over 1,200 stores in the U.S. including all Hannaford and Food Lion stores. A recent study revealed that in stores participating in the program, shoppers made healthier choices (e.g., less trans fat, more fiber and omega-3s). The study also discovered that participating stores had higher total revenue, increased price per products purchased, and increased number of items per transaction. Transparency in-store pays off.
Transparency in Production: Walmart
Last year, Walmart became the first retailer to take the lead on improvements in two areas: joining the Chemical Footprint Project, and setting a reduction goal that includes a timeline. The goal is to shrink its consumables chemical footprint by 10% over the next five years, and to that end, it’s removed 96% of high priority chemicals by volume. Its transparency goals extend to the brands it sells on its shelves too; they must provide full ingredient, chemical, and allergen disclosure on their packaging. This is all in compliance with its larger goal of selling products that sustain people as well as resources.
Transparency in Marketing: Sabra
Sabra’s first foray into transparency was when it disrupted its category with a transparent lid that let shoppers see the results of fresh ingredients. The brand has recently updated its logo and packaging to further tell its brand story and visually communicate its goals as a company. Namely, it strives to provide a welcoming personality with bold products and flavors that can foster connections between the people eating it. The photography for the new design is quintessential to transparent communication, literally shining a light on the way it delivers flavorful experiences without sacrificing its emphasis on natural ingredients.This is a response, in part, to increased consumer demand for more healthy, plant-based foods.
Transparency Is Trust
Shoppers today are more cynical about brands, especially when brands don’t offer any transparency. A mere 12% turn to food brands as the most-trusted source of ingredient information. Standard labeling isn’t enough, either. Despite the fact that 67% of shoppers put the responsibility of complete product information on manufacturers, 48% don’t feel like they’ve received adequate information after looking at the product label. More than 75% will search the internet to find the information they’re looking for, and that can include verifying the information coming from brands. The two leading causes for losing shopper trust are missing product information (62%) and the lack of supplementary information about sourcing and production (48%). It is essential to be more transparent with your shoppers to continue to stand out in the market.
Transparency Influences Demand and Loyalty
Avoiding transparency can have a negative impact on the market for brands, whereas being open and honest has definitive benefits. Nearly 40% of shoppers would be willing to switch from their current preferred brand in order to use one that provided more clarity about its products. At the same time, nearly three-quarters of shoppers (73%) are willing to pay more for candid brands, and most (81%) would be willing to try the entire portfolio from a brand they switched to because of its honesty.
Ultimately, this could lift brand-worth. Since value is placed on fresh, healthy ingredients as a loyalty factor four times as much as they put any value on brand names, this makes a good first step towards transparency. It will capture market share and begin to generate repeat purchases and loyalty.
For manufacturers and retailers alike, being more forthright is key to gaining shopper trust. It positions brands as a partner, an ally that’s helping them feel safe about the products and food they’re purchasing. In turn, it inspires loyalty, and gives brands a new platform to build the relationship with shoppers they need to be successful.