Gustavson 2021 Brand Trust Index Says Social Responsibility is Crucial for Trusted Brands

The 2021 Brand Trust Index from the Gustavson School of Business reveals that consumer loyalty and purchase considerations have undergone dramatic changes in the last year, emphasizing the importance of consumer trust, brand advocacy, and authenticity for businesses.

Canadians are able to detect whether a brand demonstrates a short-lived act of compassion, the report states. As well, the report finds that consumers have increasing expectations that brands align with their humanitarian or ethical beliefs in recent years, making strong communication a priority for brands seeking to increase consumer trust. However, it is not enough to communicate – brands must also take action. If what a brand says is not aligned with its actions, that brand will quickly find itself out of the consumer’s consideration. Dean of the Gustavson School of Business, Saul Klein, explains:

“In the past, business has often been viewed as part of the problem in any given crisis. During the COVID-19 pandemic, business is clearly regarded as an essential part of the solution. CEOs are expected to communicate the truth and take action on social issues, from climate change to addressing racial injustice. The greatest beneficiaries of this critical shift will be organizations that demonstrate a good sense of concern for their customers and employees' wellbeing while ensuring their product and supply chain's availability and competitiveness.”

2021 Trends

  • Consumers tend to gravitate to “familiar” brands in 2021 because of the peace of mind they provide. For example, due to pantry loading during the global pandemic, major packaged food companies such as General Mills, Kellogg’s and Campbell’s experienced a spike in sales. Perhaps not coincidentally, brands such as President’s Choice, Quaker Oats, and Kellogg’s all saw increases in their trust scores in 2021.
  • Short-term actions to boost business may have longer-term consequences. Gustavson’s survey results showed that many grocery stores had an increase in brand trust in the early months of the pandemic. This was likely due to the stores taking quick action to implement protective measures and to pay front-line workers $2-per-hour “hero pay”. However, in 2021, once most grocery stores reduced the hero pay, major grocery brand scores on employee treatment returned to the same or to a lower level than they were pre-pandemic.
  • Consumers expect brands to behave in a socially responsible and ethical manner. What began as a trend among millennials has now become more mainstream: consumers tend to align their loyalties to brands that contribute to a greater good.
  • A robust supply chain matters. Lysol and Clorox saw sudden decreases in overall brand trust early in the pandemic, which may be attributable to supply shortages at that time. Lysol and Clorox recovered over the rest of 2021 and received higher trust scores than in previous years. Supply chains’ reliability impacts consumer trust.
  • The hotel industry recovered from a brief decline in consumer trust. While previously the highest-ranked category on brand trust for many years, the hotel industry began to face some distrust from consumers just prior to the pandemic. Declining consumer trust was unquestionably exacerbated by the COVID-19 pandemic. However, with cleaning and social distancing protocols, the industry has renewed its consumer trust, culminating in higher than pre-pandemic trust scores.

Industry Takeaways

  • Authenticity matters. Ensure your message and communications are supported by actions.
  • Address potential supply chain issues. Review your supply chain. In addition to addressing availability and potential shortages, consider supply chain integrity. For example, please see our articles on supply chain disruptions, modern slavery and human rights due diligence in the supply chain.
  • Review contracts with influencers and other representatives. Consider implications from a reputational risk perspective. What remedies do you have if an influencer or endorser of your product communicates or acts in a manner that negatively impacts your brand or goodwill?

If you have any questions, please contact one of the members of McCarthy Tétrault’s Retail & Consumer Markets Group.

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