Retail Biz, Australia: Senior Director of Cognizant’s Center for the Future of Work Says Consumer Trust is a Brand-Level Risk or Opportunity for Retailers

“Retailers across Australia are competing in the race to omnichannel and personalized shopping experiences, each one of them using the latest and smartest technology platforms available to make the most of the myriad of personal data collected from customers,” writes Manish Bahl. “Most retailers know that in today’s digital era, data privacy and data theft are growing concerns for consumers and a factor likely to alter their trust in a brand.” Excerpts:

“Many retailers don’t consider the loss of trust as a significant business risk.

Retailers need to recognize that misusing or leaking customer data, even unintentionally, can break trust forever. A considered trust strategy will help maintain customer loyalty and continue business growth. In a recent Cognizant study of 2,400 consumers in the Asia-Pacific region, we found retail is one of the three industries least trusted by consumers.

Consumers may forgive companies for their mistakes, but not for dishonesty. Brand loyalty is the result of trust cultivated over many years, but it can be destroyed in an instant.

With trust also come intangible values. These need to be communicated to the consumer and can’t be manufactured by complex algorithms.

There are many ways to represent the hidden mechanism of trust, but we’ve found the following equation to be useful for turning this nebulous concept into something more quantifiable and actionable: TRUST = (R*C*I)/SO

In this equation, R stands for ‘Reliability’, C for ‘Credibility’, I for ‘Intimacy’, and SO for ‘Self-Orientation’. The first three elements directly correlate with trust, and have a multiplier effect. Conversely, self-orientation undermines trust.

Put simply, overt selfishness erodes trust.

Trust is not a compliance or technology issue, but a brand-level risk/opportunity and should be taken care of by a trust expert, that is, a Chief Trust Officer.

Businesses need to understand that customers’ privacy fears are of paramount concern and addressing them early has the added benefit of strengthening relationships with customers and bolstering brand perception.”

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