Reassurance and reliability vital for consumers
As global consumer markets expand, companies must move beyond their own ideas of customer trust and learn what their clients actually think.
In the face of overlapping financial, ecological and technological disruptions, shoppers are prioritising reassurance and reliability from brands.
Trust is an increasingly valuable currency in consumer markets, so companies must commit to building and maintaining long-term integrity.
Though challenges exist, there are opportunities for companies that prioritise trust-building rooted in:
- brand building
- responsible practices
- solid performance
Forge bonds with eco-conscious consumers
Irish consumer behaviour presents an opportunity companies can seize by better understanding the effects of environmental awareness:
- 85% of consumers report experiencing firsthand the disruptive effects of climate change in their daily lives
- 43% also say they’re buying more sustainable products as a way of reducing their personal impact on the environment
- 41% report making more considered purchases to reduce their overall consumption
They say tangible sustainability incentives would most affect their purchasing, such as:
- production methods that emphasise waste reduction and recycling (42%)
- eco-friendly packaging (39%)
- making a positive impact on nature and water conservation (29%)
Messaging that promotes a company’s social responsibility programmes or community engagements is less influential, at 16% and 14%, respectively.
Food companies can use consumers’ willingness to pay a premium for sustainably produced goods as a competitive advantage. They can also use strategic food packaging and presentation to:
- guide consumers toward environmentally friendly choices
- build trust through transparency in product design
- communicate clear sustainability information at point of sale
Six in 10 consumers agree an independent sustainability score on food products would be helpful, and incentives on pricing foods nearing expiry would make them more likely to buy.
Connecting with eco-conscious consumers is about more than messaging and packaging. Companies must make positive changes to their ways of working.
- Expand the impact of compliance and regulatory work, like the Corporate Sustainability Reporting Directive (CSRD), by using non-financial information to find bottom-line benefits.
- Build more resilient, more efficient and less energy-intensive supply chains through network optimisation, integrated visibility and technological innovation.
- Discover efficiencies through machine learning, AI, and analytics in operations such as:
- truck loading
- warehouse operations
- routing
- waste and inventory reduction
- Embrace the opportunity for premiumisation through product differentiation valued by consumers, for example with products that commit to doing no harm.
The environment is an important factor in purchasing decisions
Question: What actions or behaviours, if any, have you taken to reduce your impact on climate change?
Reflect consumers’ desires in your product portfolio
Consumers are seeking wellness, nutrition and more sustainable food production.
Nearly half of Irish consumers (46%) intend to boost their intake of fresh fruits and vegetables, while a smaller but important group (22%) plan to reduce their red meat consumption.
Despite these health-orientated preferences, only 17% of consumers consider the environmental implications of their food choices. This disconnect presents an opportunity for food producers, retailers and wholesalers to bridge the gap between consumer intent and sustainable practice.
The growing interest in plant-based diets hints at a rising awareness of the environmental burdens posed by traditional meat production, particularly beef, a known contributor to greenhouse gas emissions.
Explicitly addressing these consumer concerns may help companies integrate plant-based options into mainstream shopping habits. But companies must remember the main motivations behind these shifts are consumers’ considerations of general health (61%) and product cost (64%).
Act to benefit from consumer desire for healthier living
- Support consumers’ ability to eat a healthy diet through:
- clear category signposting
- packaging information
- other targeted communication and marketing efforts
- Expand portfolio strategies to incorporate a greater number of alternative meat products and proteins.
- Innovate to meet a new generation of informed, health-focused consumers, offering products such as wearables that incorporate health-tracking features.
Fruit and vegetable consumption takes root
Question: How do you expect your consumption of the following food groups to change, if at all, in the next six months?
Strike a balance with social media use
Social media is an important platform for sales and engagement, but consumers have mixed feelings about it, including concerns about its credibility.
They increasingly use social media as a place for purchases: A full 34% of consumers report directly buying products through social media, a significant rise from 15% in 2019.
They value it as a place for discovery and reviews, with 66% of consumers using social media channels to discover new brands, and 67% seeking reviews to validate a company before making a purchase.
At the same time, consumers are questioning its safety and reliability, ranking social media their least trusted industry.
Strike the right balance on social media
Brands need to create engaging and authentic content that resonates with their target audience, while keeping mindful of the concerns consumers have around trust.
Data protection is the leading factor influencing consumer trust, with 84% considering it a top priority. Other important factors are:
- the quality of goods and services (80%)
- companies’ treatment of employees (79%)
- product affordability (77%)
Companies can strike the social media balance with a smart marketing strategy.
- Emulate front-running CPG companies by building social ecosystems targeted to specific generations (such as Gen Z or millennials) across social media platforms (such as TikTok, YouTube, Instagram, Snapchat or others).
- Invest in marketing and advertising to build brands instead of pursuing more transactional trade promotion spend.
- Take a digital-first approach to investing in advertising channels such as text and email, in addition to social media.
Social media helps new brands engage consumers; two-thirds find brands this way
Question: To what extent do you agree or disagree with the following statements about social media?
Safeguard personal data, while using it strategically
Companies must take consumer worries around data protection seriously. But they should continue using it to offer personalised services and elevated customer experiences.
Most consumers (84%) say protection of their personal data is one of the most crucial factors in companies’ ability to earn their trust. When asked specifically about privacy:
- most consumers (80%) also demand assurances their personal information won’t be shared
- only around half feel confident they understand how their data is stored and shared
- 73% express concerns about the security of their personal data on social media
Acquiring and using first-person data for personalisation has become crucial to companies’ competitive advantage.
Consumers expect brands to understand them better than ever before. And brand owners must maximise first-person data to develop valuable levels of consumer personalisation.
Competition for valuable data is intensifying, and new regulations are coming into force in the EU. Companies must implement robust data protection measures in a strategy that engages consumers without compromising ethical data use.
Three key data moves to make
- Responsibly scale your data strategy to realise its full benefits for your company and consumers, givenmany CPG companies have already made their foundational investments in data, tech and AI use cases.
- Build AI-enabled digital tools for testing early-stage ideas and for digital prototyping to create efficiencies such as shortening innovation cycles.
- Elevate your ‘power brands’ by using insights from consumer data to narrow or expand the focus of your brand portfolio.
Strengthening data protection could also strengthen trust
Question: How important are each of the following areas to building your trust in a company?
Meet customers’ value expectations while managing price increases
Inflation ranks overwhelmingly as the leading risk consumers think could impact their country over the next year: 75% put the issue within their top three concerns. That’s more than 30 percentage points ahead of other major threats, including climate change and health issues, and inflation was the top concern around the globe.
Executives across consumer goods sectors consistently observed that, after consumers largely accepted the price increases of the Covid era, they’ve shown little tolerance for continued rises.
This is especially evident as they face mounting non-discretionary spending, with 48% expecting their most significant spending increase in the next six months to be on groceries.
Cost-effective pricing is emerging as an important and complex factor in gaining consumer trust. Governments and regulators, with a sense of duty to consumers, are already taking action against price increases they see as outside reasonable bounds.
Meanwhile, consumers are searching for better value for their money: 48% would consider switching from their preferred name brands to more affordable options, such as discount brands and generic products.
“It’s important to remember that value doesn’t equal price,” says Noel Keeley, CEO of the Irish food retailer and wholesaler Musgrave Group. “It’s not necessarily the cheapest, it’s the brand they feel they are getting the best value from.”
Navigate price sensitivity challenges
- As prices normalise in the second half of 2024, secure profitability by:
- investing in consumer demand
- restoring volume through marketing and advertising
- continuing cost-saving initiatives
- Attract customers back into stores. Improve the shopping experience through targeted investments in talented staff and technology.
- Consider mergers and acquisitions as part of a disciplined capital allocation. Lagging brands may be ripe for pruning.
Inflation still looms large in shoppers’ minds
Question: Which of the following risks or threats do you feel could impact your country in the next 12 months?
Percentage of respondents ranking each risk in their top three
Incorporate AI while maintaining the human element
Companies face a challenge in responsibly balancing consumer sentiment towards emerging technology, like generative AI (GenAI), with the technology’s current and potential capabilities.
A substantial 85% of consumers express concerns about GenAI’s future developments. Less than half trust GenAI for simpler tasks, such as aggregating product information or providing recommendations. And they’re even less confident about its use in higher-risk, more personal services such as healthcare.
Companies must tread carefully in integrating technology that can reduce operating costs, addressing consumer concerns and maintaining ethical standards.
Unilever’s Esi Eggleston Bracey notes acceptance of AI among employees and consumers has grown significantly in the past 18 months.
“I’m amazed at the receptivity towards AI from January 2023 to today. Internally, we like to think of AI as an opportunity for ‘augmented intelligence’, the blend of artificial and human intelligence. Our responsible AI strategies dictate we always have a person in the loop.”
Consider the steps detailed in PwC’s The path to generative AI value as a guide for your company’s responsible AI use.
- Create your value hypothesis – an initial strategic assessment of the costs and benefits of implementing AI applications.
- Prioritise key use cases, identifying those with most potential to deliver benefit across the value chain.
- Look for patterns to drive scale, thinking laterally about where you could adapt existing AI uses.
- Select your foundational AI tools, to avoid future potential tech debt.
- Define solutions that maximise existing value, adding incremental solutions to take advantage of your momentum.
- Assess cost in the broadest sense, including financial, environmental and reputational.
- Develop and deploy, test and learn. Testing is essential whenever you use a rapidly evolving technology such as AI.
- Adapt to deliver adjacent scale — repurpose your GenAI tools for broader uses in your business.
Product research ranks high among consumers’ potential AI uses
Question: Which activities would you trust AI to do accurately in place of human interaction
Key Actions Businesses can take today
Focus on trust
Make the effort to learn what your clients actually think. As senior executives recognise, trust is an increasingly valuable currency in consumer markets. Companies must commit to building and maintaining long-term integrity.
Assess your current position
Looking at your business through the key areas covered in this report, identify potential gaps and opportunities.
Consider how you can build and maintain trust with different consumer groups to remain relevant. From developing sustainable products through to tailoring GenAI strategies, devise a roadmap that ensures returns on your investments.
Seize opportunities to win
Consumers are focused on a wide range of issues, including:
- caring for the environment
- attending to their health
- being open about data
- finding value for money
- embracing AI
This can make it difficult to deliver effective customer communications. Companies must find opportunities to cut through the noise, with tactics such as clear in-store and online signposting around sustainability, and transparent data usage strategies.
We are here to help
Our 2024 Voice of the Consumer survey offers insights into the complexity of Irish consumers’ changing expectations and increasing demands.
There’s a broad range of issues for companies to address, requiring careful alignment of today’s decisions with long-term strategy.
PwC can help. Our deeply experienced team of industry and subject matter experts is available to discuss your concerns. Contact us today.
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