As businesses grapple with the costs of investing in a transparency strategy, a recent study from MIT Sloan academics revealed that supply chain visibility always strengthens consumer trust.
“Customers want to know more about where and how the products they purchase are made. And even small investments in supply chain visibility can make a big difference for a company.” – Y. Karen Zheng, Professor MIT Sloan
Whilst 75% of people considered transparency helpful in strengthening trust between businesses and consumers. In another study, 81% of companies surveyed did not have full visibility into their supply chains. In our conversations with brands, we often discuss the challenges and fears of taking action to bridge this divide between consumer demands and a viable transparency strategy.
“At a time when customers are becoming savvier — and more skeptical — about social responsibility, our findings show that the investment can be worthwhile as it always engenders consumer trust” – Tim Kraft, Visiting Professor MIT Sloan
And as people’s expectations of brands heighten, the benefits of increased consumer trust are becoming clearer – and not only in terms of loyalty and brand recognition. For certain shoppers who value philanthropy, empathy and are naturally skeptical – offering visibility on business practices also drives increased sales. Even if the approach to transparency is gradual, full visibility into slight improvements goes a long way to mitigating distrust and prevents consumers from ‘punishing’ a brand.
“Nearly two-thirds of consumers globally now ‘buy on belief,’ meaning they will ‘choose, switch to, or boycott’ a brand based on its stand on societal issues” – Edelman, 2018
The findings from this report echo our own experiences with brands and the benefits an incremental transparency strategy can deliver. From increased sales, higher brand engagement to strengthened customer loyalty.
🔎Are you a brand exploring how to implement a transparency strategy that delivers value to your business? Let us help you share full visibility into your supply chain with integrity.