Brand Transparency and it’s Commitment For Survival

The Canadian grocery sector is a tough market to conduct business. With consumers concerned over their weekly trips to the grocery store, brands must be on the customers’ shopping list, be competitively priced, offer sustainable product ingredients / product packaging, and the benefits consumers seek. Take toothpaste as an example, a common household product. The typical Loblaws store offers a 12.5” section, with 6 distinct brands encompassing over 60 different products. A tough category that just became more complicated with the latest Harris research that revealed: “Canadian consumers are looking beyond the product to the brand and, more importantly, brand reputation”.[1] One element of the brand’s reputation is How Transparent is the Brand?

What is the Definition of Transparency and When Did it Come into Being?

In the early days of the food industry, communication about how the food was manufactured was not always clear or forthcoming. Consumers were not focused on the role food played in their lives or the product ingredients. A key turning point came in 2016 when Kraft announced the elimination of artificial food colours in their kraft dinner. Today, over 90% of consumers say transparency by a brand is an  important consideration to their purchase decisions.[2]

Transparency is being open and honest. For the food consumer, a complete list of ingredients, the source of those ingredients, the brand’s values, and its sustainability efforts is necessary.

Chart 1 – Appendix 1 outlines the Top 5 ways shoppers decide if a brand is being transparent. Shoppers increasingly say receiving more information other than what is included on the label would change their behaviours toward brands. Chart 2 – Appendix 1 outlines the percentage of shoppers who seek more information beyond what is included on the product label.

Which Consumer Group is Driving Transparency?

Generation Z and Millennials value authenticity and transparency in their interaction with brands. Seventy-nine percent (79%) of Millennials and Seventy-four percent (74%) of Gen Z’s, respectively, say that company transparency is important.[3] They seek genuine connections and prefer brands that align with their values. They appreciate brands that demonstrate a commitment to social and environmental issues, i.e. engaging in community driven initiatives. A 2023 pole commissioned by Tom’s of Maine and conducted by One Poll of Gen Z and Millennials revealed:

  1. Brands need to be held to a higher standard, 80% are likely to base their purchase on the brand’s mission.
  2. Seventy-four percent (74%) of respondents shared they are likely to boycott brands for going against their personal values:
    1. The mistreatment or underpay of workers.
    2. The mistreatment of animals for production / testing.
    3. The brand is associated with racism / non-inclusive.[4]

What are the Best Ways to Cultivate Brand Transparency?

“Transparency is one of the precious keys to the doors of ethical branding. When a brand is transparent about its operations and activities, it demonstrates to the world that it values its customers and all those it influences – treating them with the utmost respect.”[5] Here are 4 ways brands can cultivate brand transparency:

  1. Be transparent in your pricing: Consumers often wonder why a product is priced the way it is. Detailing your cost structure, including material costs, labour, overhead expenses, and profit margins, can help them understand the value they receive for their money.
  2. Be transparent by admitting your mistakes: As today’s digital world puts businesses under a microscope, acknowledging mistakes when they happen and being open about how the company is handling them is vital. Eighty-nine percent (89%) of consumers say a brand can regain their trust if it admits to a mistake and is transparent about its steps to resolve the issue.[6]
  3. Be transparent with the challenges you are encountering: Today, brands are being accused of greedflation / shrinkflation. By openly sharing the challenges your brand encounters, you create a more relatable and human image, fostering empathy and understanding within your audience.
  4. Be transparent with your sustainability efforts: The importance of sustainability to consumers is becoming increasingly apparent. Be open about your sustainable manufacturing / packaging initiatives. When evaluating transparency, consumers are increasingly turning to “trustworthy certifications” including Canada organic, USDA organic, Fair Trade, B Corporation.

What are the Advantages of Being Transparent?

Transparency is not optional. It builds a strong foundation for loyalty and trust, which     in turn can help drive sales. Loyal customers spend 67% more on products than new customers,[7] and 94% of all consumers are more likely to be loyal to a brand when it commits to full transparency.[8] In today’s world, transparency also provides brands with  a serious competitive advantage. Transparent brands differentiate themselves by openly sharing their values, processes, and business practices. If you are a small business, here is the competitive edge you seek: some 76% of consumers trust small businesses more than large.[9]

I leave you with this quotation from the Dalai Lama

A Lack of Transparency Results in Distrust and a Deep Sense of Insecurity”.

 

APPENDIX 1

Chart 1

How Shoppers Decide if a Brand is Being Transparent[10]

Chart 2

Percentage of Consumers Seeking More Information Beyond the Label

 

[1] Canadians Choosing Brand Reputation Over Product, www.strategyonline.ca, October 2024

[2] How to Build Loyalty and Trust with Brand Transparency, www.emarsys.com, June 2024

[3] Leading with Transparency Promotes Customer Loyalty, www.business.com.

[4] Most Gen Z and Millennials Base Purchases on a Brand’s Mission: Poll, www.nypost.com, August 2023

[5] 10 Ideas to Cultivate Brand Transparency, www.thebrandjournal.com, Marion Andrivet, 2024

[6] What is Brand Transparency, and Why is It Important, www.resources.latana.com

[7] Leading with Transparency Promotes Customer Loyalty, www.business.com, Austin Mac Nab

[8] How to Build Loyalty and Trust with Brand Transparency, www.emarsys.com, June 2024

[9]  Brand Trust is Build on the Cause Consumers Care Most About: Themselves, www.forbes.com, 2021

[10] Transparency Trends 2023: The Food Industry Association, David Orgel, 2024