Shrinking the consumer trust deficit

Trust is crucial for consumers and for the companies that sell products and services to them: as shoppers confront a set of overlapping and often mutually reinforcing disruptions—financial, ecological and technological—they are prioritising reassurance and reliability from the brands they engage with.

That’s a signal finding of our inaugural Voice of the Consumer Survey, which builds on insights amassed over 15 years of consumer research by collecting the perspectives of more than 20,000 consumers across 31 countries and territories on a wide range of issues, including caring for the environment, attending to their health, being open about data, finding value for money and embracing AI.

The good news for leaders of consumer-facing businesses: global consumer markets are set to continue expanding. The global consumer class, comprised of those spending US$12 or more per day, reached 4 billion last year, and is projected to reach 5 billion people by 2031. The bad news: there’s a widening gap between the trust that executives think consumers place in their companies and the trust that consumers actually have in them. In order to maintain and grow market share, companies must figure out how to build trust in several dimensions.

In interviews conducted alongside our quantitative survey, senior executives confirmed the importance of trust and reputation to their strategy and growth—and described a landscape of both challenges and enormous opportunities. ‘In an era of wide distrust, business is still one of the more trusted institutions,’ says Esi Eggleston Bracey, Unilever’s Chief Growth and Marketing Officer. ‘People trust brands they love and companies that use their data responsibly. Employees trust companies that support them, have responsible practices and treat them as people. And investors trust performance and solid, continuous returns.’

A staggering 85% of survey respondents report experiencing firsthand the disruptive effects of climate change in their daily lives. A smaller but still considerable number (46%) also say that they are buying more sustainable products as a way to reduce their personal impact on the environment.

This gap presents a chance for consumer markets companies to better connect with environmentally aware consumers. It also calls for a deeper understanding of consumer behaviour, including that of the 43% of all surveyed consumers who report making more considered purchases to reduce their overall consumption.

Across the board, consumers tell us they would be willing to pay 9.7% above average price for sustainably produced or sourced goods, in line with last year’s pulse survey results of 9.8%. They say the sustainability incentives that would have the greatest impact on their purchasing are mainly tangible attributes, including production methods that emphasise waste reduction and recycling (40%), eco-friendly packaging (38%), and making a positive impact on nature and water conservation (34%). Messaging that promotes a company’s social responsibility programmes or community engagements (20% and 17%, respectively) is seen as less influential.

In interviews, executives from a wide range of consumer markets companies—representing grocery, health, home decor and more—shared similar experiences of their customers’ eco-minded behaviour. The expectation that companies will do the right thing for the environment is now seen as table stakes. Thus, companies must achieve a delicate balance between consumer affordability and environmental impact. This may involve switching from high-performance plastic packaging to biodegradable options, or giving customers a choice of using more costly sustainable aviation fuels for product delivery. ‘If reusable packaging was less expensive, not more, that would be a game changer,’ says Bálint Lévai, CEO of the dietary supplements company BioTechUSA, which has experimented with a range of alternative packaging options, with limited consumer uptake.

Cost increases associated with sustainability are a fundamental challenge for consumer-facing companies. The 2024 edition of PwC’s Annual Global CEO Survey showed that two-thirds of companies have efforts underway to improve energy efficiency, but only about half are creating innovative climate-friendly products or services. Many are also facing tough decisions on costs. ‘For companies, there is a real focus on operational challenges and minimising impacts on product pricing. How do they create systems and supply chains to meet their climate commitments? Where do they source raw materials at appropriate prices? How do they drive needed efficiencies in new processes?’ asks David Chavern, President and CEO of the Consumer Brands Association, a US trade group for manufacturers of consumer packaged goods (CPG). ‘Ultimately, climate risk will be priced into inputs and processes, and the necessary next question will be how to also deliver the right price to the consumer.’

More than half of consumers (52%) express intentions to boost their intake of fresh fruits and vegetables, while a smaller but important group (22%) plan to reduce their red meat consumption. Despite these health-orientated preferences, only 19% of consumers consider the environmental implications of their food choices. This disconnect presents a significant opportunity for food producers, retailers and wholesalers to bridge the gap between consumer intent and sustainable practice.

The growing interest in plant-based diets hints at a rising awareness of the environmental burdens posed by traditional meat production, particularly beef, which is a known contributor to greenhouse gas emissions. Explicitly addressing these consumer concerns may help companies integrate plant-based options into mainstream shopping habits, while being mindful that the main motivations behind these shifts are consumers’ considerations of general health (57%) and product cost (52%) when they make food and dietary choices.

Feeding the globe

The ambition to adopt healthier and more sustainable diets cannot rest on consumers alone; producers and retailers must also step up. Global population numbers are expected to surge from 8.1 billion today to 9.7 billion by 2050, and the dual challenge of feeding more mouths and reducing food production’s ecological footprint is becoming increasingly urgent. Although the business model of selling in larger quantities is necessary and lucrative, it will require innovation to reduce potential risks to long-term environmental and social sustainability.

Food companies can leverage the willingness of consumers to pay a premium for sustainably produced goods as a competitive advantage. Effective strategies might also include comprehensive food packaging and presentation that not only guides consumers towards environmentally friendly choices but also builds trust through transparency in product design and the communication of clear sustainability information at point of sale. For example, six in ten consumers in our survey agree that an independent sustainability score on food products would be helpful and that incentives on the pricing of foods nearing expiry would drive likelihood to purchase these items.

Consumers have mixed feelings about social media. They increasingly use it as a place for purchases; 46% of consumers report directly buying products through social media, a significant rise from 21% in 2019. And they really like it as a place for discovery and reviews: 67% of consumers use social media channels to discover new brands, and 70% of consumers seek reviews to validate a company before making a purchase. But at the same time, consumers are questioning its safety and reliability, ranking social media their least trusted industry.

Striking the right balance on social media is crucial for companies. Brands need to create engaging and authentic content that resonates with their target audience, while also being mindful of the concerns that consumers have on trust. Data protection was the leading factor that influenced consumer trust—83% of respondents consider it a top priority. Other important factors are the quality of goods and services (79%), companies’ treatment of employees (77%), and product affordability (75%).

Businesses are engaged in a delicate dance of expressing their purpose and values while also navigating the need for caution in their communications with consumers. ‘Companies today are trusted more than governments and media. That gives companies an opportunity to play a larger and purposeful role in society,’ says Ronald den Elzen, Chief Digital and Technology Officer at Heineken. ‘At the same time, we see many companies becoming more careful and restrictive in advertising, based on the polarisation we are seeing around the world.’

Advertising’s new frontier

‘Five years ago, we were spending half of what we spend now on digital advertising,’ says Kyle Artz, Vice President of China Strategy at Coca-Cola, one of the world’s largest advertisers, stressing the importance of directing this spend towards innovative consumer engagement. Through personalised approaches, user-generated content initiatives, gamification and more, companies are competing in the digital space to create relationships that go beyond mere brand awareness. The impact of personalised social media advertisements is evident, with seven in ten consumers reporting that it would influence their purchasing decisions, followed by the influence of retailer websites (66%), email (54%) and text messaging (38%).

Global social media ad spending alone is projected to reach US$220 billion this year, up from the US$207 billion forecast for 2023. This includes a strong focus on social media influencers, both widely recognisable celebrities and aspiring individuals, who are now an established channel—our survey found they have influenced 41% of consumers to make a purchase. ‘Influencers are playing a much bigger role than what they were playing even a year ago,’ says Nitish Gupta, Managing Director in Vietnam of the personal care brand Kimberly-Clark. ‘Across medical, beauty, baby and childcare, and personal care categories, when I look at the social commerce landscape, it’s a sea change.’

A large majority of consumers (83%) say that protection of their personal data is one of the most crucial factors in companies’ ability to earn their trust. When asked specifically about privacy, a significant majority of consumers (80%) also demand assurances that their personal information won’t be shared. But only around half feel confident that they understand how their data is stored and shared, and 71% express concerns about the security of their personal data on social media.

The acquisition and use of first-person data for personalisation has also become crucial to maintaining a competitive advantage in the marketplace. ‘Consumers expect that brands today understand them better than ever before,’ says Tien Yue Chen, Executive Director of the Malaysia-based pewter home decor and luxury gifting company Royal Selangor. As Coca-Cola’s Artz tells us: ‘First-person data for personalisation and advanced insights is a point of consideration in nearly every decision we make.’ With competition for valuable data intensifying, and new regulations coming into force in the EU and several Asia-Pacific countries, it’s imperative for companies to implement robust data protection measures and enact a strategy that engages with consumers without compromising the ethical use of data.

Use it, don’t abuse it

Industry executives describe a developing social contract that involves consumers willingly sharing their personal information in exchange for valuable incentives such as promotions, exclusives and other perks. Indeed, nearly 50% of consumers say they are happy for their data to be used to offer them personalised services and experiences. ‘When our customers notice that their data is being used to provide them with better products or treatments, or to achieve efficiencies in obtaining their prescriptions, we can see that they feel much more confident in sharing their data with us, and this reinforces our reputation,’ says Patriciana Rodrigues, Chairwoman of Pague Menos, a Brazilian pharmacy chain.

This trend is especially evident in loyalty programmes, which are becoming the primary engine of customer data for many companies. Given that an overwhelming 93% of executives in the United States believe that establishing and nurturing trust has a direct and positive impact on financial performance, this exchange of data and incentive has the potential to create a virtuous circle between trust and revenue.

Inflation ranks overwhelmingly as the number-one risk that consumers think could impact their country over the next year; 64% put the issue within their top three concerns. That’s more than 20 percentage points ahead of other major threats, including slow economic growth, climate change and health issues, and it was the top concern consistently around the globe—despite lower rates of inflation and, in some regions, signs of deflation.

A consistent observation came to light in our interviews with executives in a variety of consumer goods sectors. After consumers largely accepted the price increases of the covid era, they have shown little tolerance for continued rises, especially as they turn their attention to mounting non-discretionary spending: 62% expect the most significant increase in spending in the next six months to be on groceries.

Cost-effective pricing is emerging as an important and complex factor in gaining consumer trust. Governments and regulators, acting out of a sense of duty to consumers, have already started taking action against price increases that they see as outside reasonable bounds. And consumers are searching for better value for their money: 40% would consider switching from their preferred name brands to more affordable options, such as discount brands and generic products. ‘It’s important to remember that value doesn’t equal price,’ says Noel Keeley, CEO of the Irish food retailer and wholesaler Musgrave Group. ‘It’s not necessarily the cheapest, it’s the brand they feel they are getting the best value from.’

Given consumers’ and lawmakers’ reactions to price increases, companies need to make other moves to not only manage pricing but secure their finances and reassure investors. ‘Globally, investors are asking about how we are going to approach volume growth in the future,’ says Artz. ‘There is huge pressure on [consumer goods] companies that enjoyed price increases during covid but are now finding it increasingly challenging to deliver volume growth on top of pricing. So we have to be prudent and continue to monitor the right balance of volume and price at both a global and local level.’

Focus on the purchase journey

Brands and retailers must embrace a more flexible omnichannel strategy to meet consumers’ evolving expectations for a dynamic mix of online and offline experiences. Marketers should also take note that the distribution of consumers’ preferred shopping locations—either in-store or via remote channels—has remained consistent post-pandemic. Since 2022, preference for shopping in-store has hovered at around 42%, via smartphone at 34% and via PC at 23%.

For some companies, increasing resources to deliver a consistent and personalised experience, regardless of the platform or location, is a source of competitive advantage. ‘Our investment in customer-centricity, alongside delivering exceptional customer experience regardless of channel, has paid off in terms of an uplift in brand loyalty across our offerings,’ says Marc Giroux, COO of Food for Canadian grocery chain Metro Inc.

Consumers are seeking personal connection, particularly in their discovery of new brands; 55% of survey respondents say they choose to visit physical stores and engage with salespeople, compared with 49% who seek out recommendations from family and friends, and 46% who turn to online browsing. Indeed, many executives stressed the importance of empowering their sales staff through access to more personalised consumer data and offering consumers more meaningful in-store services and experiences.

Modest technological empowerment is also key to building consumer trust and satisfaction in the in-store experience. Nearly 40% of consumers indicated that the availability of mobile or contactless payment solutions would encourage them to shop in-store. Additionally, more than one-third of consumers expressed interest in smart tags that provide product details on smartphones, as well as self-checkout systems.

Companies face the challenge of responsibly aligning consumer sentiment towards emerging technology, like generative AI (GenAI), with the technology’s current and potential capabilities. A substantial 80% of consumers express concerns about GenAI’s future developments. Although more than half of consumers trust GenAI for simpler tasks, such as aggregating product information or providing recommendations, consumers are less confident about its usage in higher-risk, more personal services such as healthcare. This means that companies must tread carefully in integrating technology that can reduce operating costs, addressing consumer concerns and maintaining ethical standards.

Unilever’s Eggleston Bracey, for example, notes that acceptance of AI among employees and consumers has grown significantly in the past 18 months. ‘I’m amazed at the receptivity towards AI from January 2023 to today,’ she told us. ‘Internally, we like to think of AI as an opportunity for Augmented Intelligence, the blend of artificial and human intelligence. Our responsible AI strategies dictate we always have a person in the loop.’

‘We’re also seeing more adoption as large language models have made AI so accessible, making it a lot less scary for people. People are identifying with it now because it’s making life easier.’

Take the percentage of consumers who trust AI to provide product recommendations: 50%. This number will continue to climb as familiarity with ChatGPT and other AI applications increases, and if consumers turn away from incumbent search engines and towards AI platforms. ‘AI search, with its propensity to “choose” products for consumers, will be a massive change for CPG companies,’ says Chavern of the Consumer Brands Association. ‘But that won’t be the only way that AI could turn marketing on its head. It is easy to see how it could be used for massively improved ad efficiency and content individualisation.’

Early-stage adoption

Today, adoption of machine learning and GenAI applications, such as LLMs (large language models) and text-to-image tools, varies among brands. Companies have used these tools for internal improvements such as supply chain optimisation, company information management and pricing strategies. Some brands have progressed further—and done so quickly—experimenting with consumer engagement and marketing personalisation through design-led tools in controlled environments or ‘sandbox’ settings. ‘Six months ago, we were just starting out in terms of our GenAI journey,’ says Kavindra Mishra, CEO of Shoppers Stop, a chain of department stores in 40 cities across India. ‘Now, we are using it to interact with more than 9 million loyalty customers, enabling us to personalise our engagement with them, and supercharging our understanding of their attitudes and behaviours.’

Despite high interest among respondents in the use of chatbots for providing detailed responses (42%) and to solve complex problems (44%), nearly half (49%) of consumers demand direct connection with a sales representative if the chatbot is unable to answer the consumer’s query effectively. This, again, highlights the crucial balance that companies need to strike between technological innovation and the human touch.

Unlocking the trust premium

As global consumer markets continue to expand, companies must move beyond their own perceptions of customer trust and learn what their clients actually think. Senior executives recognise this, and though challenges exist, there are also significant opportunities for those companies that prioritise trust-building efforts rooted in brand building, responsible practices and solid performance. Trust is an increasingly valuable currency in consumer markets, so companies must commit to building and maintaining long-term integrity.