Insights / Multichannel

Online Retail Success Hinges on Trust

Indiana Jones

A recent study on personal data by the Boston Consulting Group asked how much is trust worth in online retail? The answer: perhaps even more than you would guess.

It goes without saying; developing rapport and trust-based relationships with customers is at the heart of every retail experience. Now, a new report from the World Economic Forum, in partnership with Boston Consulting Group (BCG), attempts to put a dollar value on the importance of trust.

The report says that while online retail could reach US$2 trillion in the G20 nation by 2016, consumers’ trust perception does have a significant influence on that number. If trust levels increase between shoppers and online stores, the sector could grow to as large US$2.5 trillion. On the other hand, that number may only reach US$1.5 trillion if trust levels dropped.

“Given that this $1 trillion range is from just one small part of the broader personal data ecosystem, it provides an indication of the magnitude of the potential economic impact when other sectors (health, financial services, etc.) are considered – potentially in the tens of trillions of dollars,” the report states.

The BCG report comes in the wake of increasing customer concerns regarding personal data privacy. As more information is able to be harvested online, a growing number of businesses (including retailers) are tempted to gain this information in a variety of different ways. Unfortunately, this can seriously impinge on the all-important trust relationships that retail is predicated on.

The World Economic Forum refers to personal data as “an emerging asset class” in the report, acknowledging the value of such data. However, in order to gain the full value of such data, public and private institutions need to rethink how they do business so that consumers get more protection, rights and opportunities to hold organisation accountable when it comes to their data.

Big data means big money in both the online and offline worlds, this report shows that there’s even more potential for that information than we have realised so far. On the other hand, it also reveals just how important the perception of trust is in the retail environment, and this would equally apply to both the on and offline environment.

What do you think are some of the best ways to cultivate trust?

2 Comments

  • Trust online is a difficult asset to gain. The most common methods are having your website verified by “verisign” or “rapid SSl” so you get your little green padlock in the address bar. These will help you get a customer over the line from browsing to buying. Actually writing that I am thinking it probably prevents a bounce once they don’t see the padlock (slight difference). The other common ones are to register with brands like getprice or Shopping.com and go through the process of earning their trusted badges which you can then display on your homepage or checkout. The trouble is that I am thinking these are not that hard to copy or forge.
    Referrals are harder to get but when actually coming from a friend are more likely to win actual trust. An email follow up campaign asking a customer to review your product, recommend to a friend or add a facebook like are becoming more powerful.
    For us one of the most successful trust builders is youtube. We have been consistently posting up new ‘how to’ videos for the last couple of years and as they always show up in the search results customers can see us in the search results appearing in different areas. This really builds trust and it happens frequently that a customer will ring and say I saw your videos on youtube so I thought I would order from your site.
    If you add all these things together what you will get is a range of channels all generating a more trustworthy appearance and it really helps. Our growth month on month is really pleasing.

    Reply
  • A credible and a not credible, of course, that’s in real life business are true and false mixed.. There are some people online and sell things are true and good, just want to get more customers through the network of… Proceeds

    Reply

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