How to win back customer trust

The current consumer environment has fostered a desire for bargains, and customer loyalty has suffered as a result. Two retail experts lend their opinion on how business owners can build that loyalty back up.

Business owners who want to retain customer loyalty need to establish a relationship of trust between customers and the brand, so what do business owners need to do?

Talking at a seminar in Sydney on the current state of the retail environment, David Bush, former head of fashion for David Jones; and Anthony Bittar, director of Maker & Co and an authority on retail sourcing, said that the retail industry is ‘dumbing itself down’, which has resulted in employees leaving the retail industry.

“More of the millennials come into the marketplace and actually have no interest in doing anything other than getting themselves in a mirror and building their own brand, let alone working on a shop floor,” David said.

A handshake over a grassy fieldBy dumbing itself down, both retail experts have agreed that the retail industry is facing a serious trust problem.

“The relationship between the consumer and the retailer is more adversarial,” Anthony said.

David stated by focusing on profits above customers, trust is degraded between customers and businesses, which then pushes the customer away.

“We come back to the fundamental relationship between the brand and the consumer, and for many brands, the customer is an irritation at best, and probably the third or fourth on the pecking order,” David said.

“What's happened over time is [customers] all go, ‘Well, I don't have a relationship with that brand, I don't have any attachment to that brand … I'll buy at price’.”

According to David, by trying to bring in customers through having the cheapest prices for products and services, business owners will find that their loyalty will last as long as they have that lowest price.

In order to regain that trust, David suggested that business owners need to have very clear product differentiation, having a cost-effective back-end and show transparency to consumers.

If business owners are not addressing any of those three trust-building qualities, David said that business owners are “nowhere close to winning, and I think that those that are doing [all] combined are at the top of the tree”.

While an international example, David mentioned the successful US-based clothing retailer Everlane as a business addressing those three points for Australian businesses to strive for, improving trust. Everlane’s business model is based on being upfront with how much their product costs to manufacture, down to the individual materials used.

“You can pay a number of different prices. They'll say, ‘If you want us to make money, the thing’s $100. If you want us to make a tiny bit of money but the people are shipping the goods, you can pay $80. If you want to make sure that only the people that are making the garment are making money, you can pay $40’,” David said.

“There’s a scale of what you can pay, and they are extraordinarily successful because they are being ever so transparent in relation to what that garment costs.”

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