Restoring consumer trust remains an uphill battle for retailers, as for many others. The rise of private label (PL) products can, in fact, create a new reputation and identity for the retailer. Before, it was believed that consumers purchased these cheap knockoffs because they trusted in the store. But, as PL products have grown in quality to rival that of leading brands, a surprising about-face has emerged: customer satisfaction with PL products is by far the most important driver of trust in the retailer. The author suggests some strategies that retail managers should keep in mind to develop trust and long-term loyalty using private labels. At the same time, large retailers can boost trust levels among consumer groups by tapping opportunities with local store brands – as higher consumption is often associated with wide-ranging PL brands that are values based and community linked.
Tools and Frameworks:
Boosting Trust Through Private Labels illustrates how the purchase of PL products has gone from being a consequence to becoming a key driver of consumer trust in a store.
Coop, Mercadona, Tesco, Migros, Loblaw, Sainsbury’s, Carrefour
A sample of 1,400 supermarket customers in Italy was contacted by professional interviewers, yielding 987 usable questionnaires. The author looked at how levels of trust in the grocery retail sector related to four specific areas that store managers can leverage in their daily operations: human resources; communications and sales promotions; store environment; and product assortment, including PL products.
About the Author:
Sandro Castaldo is professor of management at Bocconi University and director of the Marketing Department of the SDA Bocconi School of Management in Milan, Italy.