According to recent studies, customers shop more often with retail companies and spend more money with those they experience as authentic. But what does that actually mean? How can retailers demonstrate authenticity across the entire buying journey? Renaud Marlière, Global Chief of Business Development of Asendia, provides some of the answers.
Retailers and their banner operations have been called on to demonstrate authenticity in their relationships with their customers for over four years and it was a major topic at the National Retail Federation’s Big Show in New York back in 2018. However, while the term is now in common parlance, its meaning and its application are not always well understood.
Authenticity is defined as how a shopper perceives a brand to be faithful to itself, its customers and to the wider world, and is the basis on which shoppers trust them. This trust is lost when a brand looks as though it is trying to be something that it is not. To a greater or lesser extent, most retailers and their banner operations recognise the importance of honesty in their dealings with customers and the wider market, but authenticity is elemental in the entire engagement, from browsing to buying and to returns in terms of marketing, order management, delivery and all associated customer engagement.
Customers honour authenticity
Getting this wrong, either in terms of sentiment or in execution, can have a significant negative impact on sales and repeat business, something of real concern to companies that recognise the importance of loyalty. It is estimated to cost around five times as much to acquire a new customer as it costs to keep an existing one, so clearly authenticity has a powerful commercial imperative, particularly where shoppers will pay a premium for goods from companies they perceive as authentic.
What consumers expect in an authentic brand relationship is delivery on promises made, transparency in the supply chain that fulfils orders, a visible commitment to sustainability, and fair treatment of suppliers.
In a recent research of over 8,000 retail shoppers in the US, UK, Canada, Germany, France, Switzerland, Hong Kong and Spain, Asendia uncovered some interesting insights into what shopper behaviours are influenced by authenticity.
Significant regional variations
The research in the latest report shows that authenticity counts. 73 percent of respondents said they were more loyal to retailers and their banner operations who they believe are authentic. There are regional variations: The highest figure was Hong Kong at 83 percent and lowest in Switzerland at 62 percent.
When it comes to money, 66 percentsaid they spend more with retailers and their banner operations who they believe are authentic. In Hong Kong this rose to 80 percent but was only 52 percent in Switzerland.
This then translates to choice of where to shop. 59 percent said they will only exclusively shop with retailers who they believe are authentic. In Hong Kong this was 75 percent but only 52 percent in Switzerland. By extension, consumers will often shop less with a retailer if they weren’t authentic. In the UK, for example, three quarters (75 percent) would shop less.
Social media influences brand experience
Authenticity is generally more important to older audiences, however, younger audiences feel brands that sell Direct To Consumer (DTC) deliver more authentic online brand experiences, and are more likely to be involved in these because they are using more channels, particularly social media.
Consumers were then asked what they thought retailers could do to be more authentic, and this reveals what strategies retailers can put in place to win and retain more business. The top finding was making sure that companies are straightforward on delivering their promises to customers at 58 percent. Despite greenwashing hitting the headlines lately, only 25 percent felt this was important.
Brands looking for role models of authenticity need look no further than Ikea. Overall, Ikea is seen as the most authentic brand at 41 percent averaged across multiple countries, while second place globally was Amazon.
Challenges in cross-border shipping
A key lesson that came out of the research was the fact that shoppers will not choose retailers and their banner operations on authenticity alone and will expect good service across a number of areas, most notably delivery, quality product ranges, value for money and personalisation in communications and service. In the research, Amazon was the overall winner at 69 percent in the US, UK, Germany, France and Spain, while for Switzerland it was Ikea at 40 percent and Apple in Hong Kong at 42 percent.
When asked about preferences for cross-border shipping, fulfilment and authenticity are closely linked. Two things were most important to consumers here: being able to track where their product is being shipped from so they can estimate the cost and distance it has to travel to reach them (33 percent), and having their preferred returns options (paperless, drop off box, collect, postal office, in-store) offered (32 percent). However, respondents also indicated consolidated deliveries (products are sent in a consolidated way instead of in many individual deliveries, there is less packaging waste – 32 percent), zero-emission deliveries (bike courier or autonomous deliveries – 13 percent) and Electric Vehicle (EV) delivery options (11 percent).
Shoppers’ wish list for the next year
These sustainable elements then rise up the priority list for consumers as they look ahead over the year. 40 percent wanted deliveries using only reusable packaging, 30 percent wanted 100 percent carbon neutral deliveries.
Every company has its own identity and every company is on a different stage in its journey to authenticity, but it is clear that shoppers put a high value on this quality in every aspect of their relationships with their favourite retail brands, and it must now be included as companies develop new products and services, channel presence and country operations.
“The shopper in 2023 wants the world on a string. They say they want to go green and they expect their favourite brands to be green, but they still want their stuff delivered fast, at the best possible price and to get free and convenient returns. How brands respond to this paradox will determine the future shape of e-commerce!” Renaud Marliére, Global Chief Business Development, Asendia