What retail leaders need to know about the authenticity gap

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What retail leaders need to know about the authenticity gap

By Gina Acosta - 09/13/2017

Retailers no longer have the option to be silent on divisive social issues, according to the fourth iteration of FleishmanHillard’s Authenticity Gap report.

The study, "Authenticity In An Uncertain World," uncovers a surprising number of gaps between what consumers now expect of a retailer or brand and what they actually experience in reality.

The research is a result of a comprehensive study of almost 300 companies across more than 25 industries, conducted with nearly 5,500 consumers in five countries. Some of the consumer insights include:

Companies are expected to reach beyond isolationism

When governments create policies that support isolationism, almost two-thirds of consumers around the world expect companies to take a lead in driving the interchange of ideas, products and even culture. Consumer support for companies taking the lead was highest in the United States (68 percent) and lowest in Germany (57 percent).

Companies are expected to go beyond mandated behaviors

Globally, 74 percent of consumers believe companies should go beyond mandated regulations. That belief is highest in China (80 percent), compared to countries like Canada (70 percent) and the United Kingdom (71 percent).

CEO behavior is linked to expectations of companies

Nearly 84 percent of Americans equate a CEO’s integrity with that of the companies they lead. This trend is reflected globally as well, where 78 percent support the view. It is lowest in Germany (73 percent).

How executives behave and how the company impacts society account for nearly half of what makes up our perceptions and beliefs about a company – well beyond simply their products.

What we value in products and services equals our personal values

Better value is both the source of greatest expectation and the source of the most disappointment among consumers in almost every country studied. In four of the five countries (Canada, China, United Kingdom, United States), 70 percent or more of the companies studied show gaps between expectation and experience when it comes to delivering greater value. Germany has the fewest companies (42 percent) with gaps.
Value is no longer just about the cost of a product. The research shows that, in fact, the value of a product is intrinsically linked to consumers’ views on whether the leadership of a company is seen to be behaving ethically, and clarity about how a product is created, including the sourcing of materials and manufacturing methods.

Demand for customer care is high, reported care experiences are often low

Three-quarters of United Kingdom firms are failing to meet consumer expectations on customer care.

In the United States, customer care is the top driver for all financial service companies and all managed care and health insurance companies studied. All of these industries saw meaningful gaps between the expectations and experiences of customer service, including more service centric industries like airlines (13.1 percent) and hotels (10.8 percent).

With rapid innovation, the verdict is out on tolerance for product flaws and average service

More than 70 percent of Americans expect innovative companies to make product or service mistakes because they are inventing something completely new. Consumers not only expect companies that are disrupting their industries to bring innovative technology, but they also want disruptive customer service. And yet while consumers remain fascinated with these “disruptor darlings,” they tend to have greater gaps than their established peers when it comes to being authentic.

Most feel companies don’t take proper data security precautions

Nearly 60 percent of consumers do not think companies take data security seriously enough and agree companies are not investing enough in IT to provide security. 

Who is credible? The unexpected hero

Consumers are three times more likely to trust a company employee rather than its CEO when it comes to sorting out fact from fiction about a brand.

The expectation for credible corporate communications on average ranks at the bottom of consumer expectations across all countries.

The research suggests that, unless firms are speaking to current day issues in the management of their business, they will face reputational damage from increasingly disaffected consumers whose expectations are markedly different in today’s environment.

Marjorie Benzkofer, global managing director of Reputation Management for FleishmanHillard, believes the environment today demands that business leaders spend more time contemplating what actions they take as corporate citizens.

“Companies need to be able to quickly translate what impact rapidly developing political and societal issues may have on their company,” Benzkofer said. “They must understand their audiences’ many expectations and opinions, which are increasingly divided, in order to determine what actions to take, or to choose not to take, that can either accelerate business success or increase barriers. To do this more effectively, companies need to better define and reinforce their relevance to society.”

The key is to measure and understand how customers view a company’s core idea of ‘doing what is right,’ and assess the other qualities that create the authenticity of its brand and its mission.

“Companies must embrace this new reality, operate in transparent and authentic ways and align all aspects of their business with what the consumer expects,” Benzkofer said. “Those that do will create a strong foundation of true value. Those that don’t may not be around long enough to tell their story at all. The companies people choose to support – or work for – are increasingly an extension of a person’s personal values,” Benzkofer said. “Today’s most influential executives will not only be captains of their enterprise, but also senior statesmen in society. Lasting impact will come from leaders who can authentically create more value and purpose by demonstrating a wider concern for those who work for, with and around them. As senior communicators, we can help them understand why reaching for that greater purpose is worth the risk – for them, their business and society.”

What is clear is that brands need to focus on closing the authenticity gap sooner rather than later, or risk becoming irrelevant.

Read the report here.

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