We all know that in challenging economic times, consumers are less brand loyal than ever. They’ll drop their favorite brands and seek out lower priced alternatives. But what happens when consumer trust is violated due to safety concerns? Or when expectations are not met due to a real or perceived loss of quality? We know that these issues have a direct impact on consumer spending, and worse: A powerful impact on consumer trust.

My consultancy works with many key consumer product industries and companies that have been impacted by quality and safety issues: toy, food/beverage and consumer electronics, among them. When Progressive Grocer reported on a study commissioned by Deloitte LLP quantifying the damage consumer loss of trust has on brands, in an article titled, Consumers Losing Patience with Recalls: Survey, it was of special interest to me.

I’ve written about the need for transparency, honesty and trust that brands must work at if they are to retain loyal customers, and that goes for B2B and B2C companies. In a past post, I pointed to the need for companies who source materials or labor from abroad to get actively involved in that process and to be able to trace every component of every product. The importance of doing this cannot be overemphasized.

The Deloitte report was conducted by an independent research company online in early September. 1004 adult consumers were polled nationally with a 3.1 margin of error. According to the report: 58% of respondents who heard about product safety and/or quality problems altered their buying habits.

But here’s the most significant part of their findings: these consumers didn’t purchase the products in question for over nine months, making it less likely they would purchase those products or brands ever again.

Now, here are concrete numbers to support my opinion in the toy, consumer electronics, fresh food and packaged food/beverage categories:

• 49% of Deloitte respondents surveyed were “extremely concerned” about the safety of products imported from abroad, especially older consumers.
• Highest level of concern: 53% of women and 56% among consumers aged 55 and older.
• 54% of respondents were more concerned about the safety of fresh food than they were just one year ago.
• 65% expressed “extreme concern” about the safety of products made outside the U.S.
• 73% expressed “extreme concern” about the safety of products made in China; half had the same doubts about products originating in Southeast Asia and Mexico.

What consumers in the survey want:

• 86% want more information about food product safety to appear on food packaging.
• 81% want more information about food product safety to appear on company web sites.
• 81% want more information about food product safety to be provided by the government.
• 67% want the following information on food product labels to help them in making their purchasing decisions: country of origin, product testing certification, quality certification.

Deloitte LLP’s vice chairman and consumer products practice leader, Pat Conroy: “Companies are meeting consumers’ concerns by upgrading or expanding safety procedures, including stricter safety standards, testing, and third-party audits, and government intervention is driving change.”

Questions:
• Do you feel, as a consumer, that enough has been done to ensure product safety?
• Do you feel that there is enough transparency and traceability in consumer goods to earn your trust yet?
• When there has been a recall on products you generally purchase, have you refrained from buying that product or brand again?
• Do you think there will be more incidents involving tainted food, toy or other consumer goods?

I’d love to hear from you.

Photo credit: Robert Hruzek