Transparency in Retail

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Transparency in Retail

By April Miller - 08/01/2017
Shoppers are no longer making purchase decisions based solely on taste, price or convenience. Transparency is now at the forefront, and industry insiders say brands and retailers need to act accordingly.

Transparency is trust. It’s building shopper loyalty. It’s winning a consumer when they are choosing between products A and B. Failure to be transparent is not an option for any brand or retailer wanting to succeed.

“If people are searching [for information about a brand] and they can’t find anything, that absence of communication is actually communication,” says Deb Arcoleo, director, product transparency, The Hershey Co. “Even if it’s as simple as we don’t track something at an individual SKU level, shoppers will make assumptions about why the brand isn’t sharing information.”

The days of shoppers simply making purchase decisions based on taste, price and convenience are gone. While those factors are still considered, transparency is now the overarching driver, as reported by Deloitte Consulting in its “Capitalizing on the Shifting Consumer Food Value Equation” report.

And this is not a Millennial thing. The report noted that the behavioral shift is found across age groups, income levels and regions, as well as product categories.

Nearly two-thirds of consumers (64%) in a recent Label Insight study said they would be willing to switch to another food product if they understood the ingredients, says Patrick Moorhead, Label Insight’s chief marketing officer. He adds that 48% of shoppers feel they are “not informed at all” after reading a product label and thus 76% search the internet for more information.

Dietary restrictions, food safety law reform, distrust of the food industry, allergies, consumers’ thirst for knowledge, product recalls, rapid growth of technology and social media have all contributed to the need and desire for brand and retail transparency.

Roundtable

To further understand how transparency is affecting retail, we assembled a virtual roundtable to delve deeper into the issue.

What do we mean when we say “transparency in retail”?

Arcoleo: Making available to the shopper the information he or she deems relevant to the purchase decision.

Joan Driggs: Way more than the product. It’s about shopper empowerment, with the goal being that the shopper will feel trust in and loyalty to the national and store-brand products she buys. And that extends to the retailer where she’s making the purchase.

Jim Flannery: It’s primarily about brands and it doesn’t matter if that is national, regional, local or private label.

Moorhead: Transparency is a method of keeping today’s shoppers coming back and attracting new customers by providing a shopping experience more personalized to customers’ needs.

What do we need to be transparent about?

Moorhead: The concern of each buyer varies. For some it’s a lifestyle diet, while some care about ethical treatment of animals or allergens like tree nuts. Some of these are covered on ingredient labels, but many are “off-pack” attributes that consumers can’t easily find.

Flannery: It’s well beyond what’s on the label. For example, what is soy lecithin and why is it in my product? Those kinds of questions.

How can companies keep up with consumer demands?

Arcoleo: It’s hard, but that’s why I believe SmartLabel is the right answer. I can zip in and be on my way or spend more time.

[Editor’s note: SmartLabel is an online tool that gives people a way to get more detailed ingredient information about products. Each participating product has a specific landing page containing detailed information on ingredients and other product attributes, and the landing pages are organized in a consistent format. Hershey was the first company to have its products searchable on SmartLabel. Led by the Grocery Manufacturers Association, SmartLabel is expected to have 34,000 searchable items by the end of 2017.]

Moorhead: Brands can address consumers’ top three pain points with SmartLabel’s digital product pages. [1] Create a place where they can find all the information consumers need. [2] Define terms that may be confusing or vague. [3] Break down ingredient lists, giving definitions about lesser-known ingredients like citric acid and xanthan gum.

Arcoleo: There are governance rules; we want that consistency to SmartLabel. It’s one of the few times in history where the best interests of consumers, companies and the government match up.

Does SmartLabel replace a brand’s own efforts?

Flannery: No. It’s very synergistic. From SmartLabel pages, you can go to a brand’s proprietary site, and vice versa.

Moorhead: Unilever integrated its SmartLabel pages to all of its brand sites. This created standardization of how product data is provided and consolidated the process of maintaining all 2,000-plus pages.

Arcoleo: Additional information and storytelling can be done on your own websites, your branded properties and your social media channels.

What else can companies do?

Emmie Satrazemis: At Raley’s, we help educate our customers through our in-store signage, online resources and wellness champions in stores.

Flannery: You need to make sure consumers can get information however they are predisposed to doing so. We also recognize there are consumers who don’t have smartphones, so the brands’ consumer services line have the same SmartLabel information.

Arcoleo: In March we launched a pilot, Sourcemap – an online interactive mapping tool. It shows consumers where ingredients come from. The label tells you “what.” This takes you to “where” and “how.”

Driggs: Companies can put their marketing into initiatives that draw the consumer in to learn more about them and forge a more meaningful relationship. “Meet our cows. Meet our farmers. Visit our plant. Look at our clean energy trucks” – you name it. Chobani is a good example.

Who else is getting it right?

Flannery: Kellogg’s has its “Open for Breakfast” site. SC Johnson is another. With Bumble Bee, you can find where your fish was caught.

Satrazemis: Kind was the first snack bar company to declare how many grams of added sugar is in its products. Campbell’s launched a dedicated webpage, WhatsInMyFood.com.

Arcoleo: Long before SmartLabel, Clorox had an ingredient glossary on its site. It is a little humorous, and it attempts to demystify the ingredients. Ahold and its Nature’s Promise line – they seamlessly built SmartLabel into their online shopping portal.

Moorhead: Unilever. Last year they launched SmartLabel across their entire U.S. product portfolio. Pages showcase not only core product information but also attributes such as growing methods and ingredient sources.

Any best practices you’ve come across?

Flannery: Embrace the idea that transparency is a strategy to help you build trust and loyalty with your consumers. And don’t get overwhelmed. Start with one or two brands, start with the required attributes, and then add the voluntary attributes that are important to your customers. Take about six months to build that out.

Moorhead: Understand what data you have and what gaps need to get filled in. Delivering in transparency is only as good as the data powering the effort. Getting your data house in order is job one.

Arcoleo: Start with farms and go up the supply chain. Especially with food, we owe it to the public to be really clear where food comes from and why we make the decisions with ingredient choice.

What about those who don’t embrace transparency?

Satrazemis: They could see a decrease in loyalty for their brands. The more information, the better.

Moorhead: It erodes brand trust and hurts the bottom line. Supply chain and ingredient data is no longer optional if you want to win back trust.

Arcoleo: If you think not doing so is going to protect your brand, that’s very misguided.

Flannery: The consumer will decide.

Do you have any parting thoughts?

Driggs: The shopper of the future is going to be focused on their personal health and wellness, and their personal safety. They are going to be more empowered than ever to make decisions based on their access to information. They will be looking for “partners,” including businesses and products they believe support their personal well-being. Transparency is an opportunity to demonstrate that a brand or company is on the consumer’s side. 

Flannery: You’re either in or you’re not. You can’t be kinda, sorta transparent