Organised by the Retail Centre of Excellence (RCoE), the annual Asia Retail Leaders Conference was held on 17 November 2021 at the Singapore Management University Mochtar Riady Auditorium. The full-day hybrid conference brought together 11 industry experts from the retail and academia sectors, was attended by more than 300 participants.

The theme of the conference, Pivot or Perish, saw experts sharing insights on a range of topics, from the impact of digital transformation to changing consumer expectations and purchasing habits in a post-pandemic environment.

SMU Associate Professor of Organisational Behaviour and Human Resources, Lee Kong Chian School of Business, Dr Tan Hwee Hoon, was part of the panel of speakers in the second session that focused on Trends and Insights in Retailing. Her presentation, “Trust Foundations of Customer Relationships” shed light on the need for retailers and brands to build relationships and gain trust from consumers to excel.

“Trust is the foundation of customer relationships,” says Prof Tan.

She goes on to share that while online shopping is the norm today, many customers end up not carting out even if they’ve put items in the cart while browsing the site. And when this happens, she believes that it’s simply because they are unsure if the store or retailer is trustworthy.

Therefore, it is important to look at how consumers think and how can they know if a certain retailer or brand is trustworthy or not. “The keyword here is ‘trust’,” she says, highlighting the following three elements as key considerations for consumers:

#1: Ability

A brand’s ability can be likened to its competency and performance. And to know whether a brand has the competency to deliver on its promises, Prof Tan looks to its “reputational network effect”.

“Word of mouth is a top priority,” she explains, because people tend to trust a brand or product when its reputation is vouched for from significant trusted others, such as your nearest and dearest like family and friends.

#2: Benevolence

An important factor is how the store or brand makes consumers feel, which she associates with its warmth and ability in delivering a product, service or experience that speaks to them. This is also the most important aspect among consumers in the Eptica Digital Trust Study, which evaluated UK brands on their ability to respond to customers through online channels, at 63 per cent, because their trust was earned from brands that were able to make shopping and buying easy and seamless.

From a psychological aspect, Prof Tan explains that we ascertain how well we work with others through the perceived warmth of collaborating parties. When it comes to a brand, it is about the experience and interaction. After all, “trust is about a relationship”, she adds.

She elaborates that this perception of trust and warmth does not always lie in the quality of a company’s offerings. For example, if a company can offer a multitude of services or products, it speaks well of its abilities. But beyond variety, consumers often prioritise the brand’s ability to create an individualised experience and to make its customers feel special, such as personalising product options.

#3: Integrity

This refers to the brand or retailer’s honest, strong moral principles. In other words, first impressions matter. So how do consumers know if a brand or store is trustworthy online? It starts with the reviews shared by other customers that can provide insight into the quality of the products sold, and how the store conducts interactions with consumers pre- and post-purchase.  

In short, integrity is what gives consumers confidence in a brand, store, or product, and can be used as a “proxy for competence”. To illustrate this point, Prof Tan refers to purchasing products online on two different sites. The first site gives you a confirmation email to acknowledge that your purchase is successful, but leaves you guessing when the goods will arrive. The other site, on the other hand, gives you updates every step of the way, from confirmation of the purchase and packing of your order, to when it is shipped out and on its way during delivery.

The online store that makes you feel more reassured and more confident is naturally deemed to be more competent, gaining consumers’ trust and converting them into repeat buyers.

East vs West: Cultural Differences Play a Part  

During the roundtable, Prof Tan also shared an interesting observation when it came to building trust among consumers in Asia and the West.

“In Asia, the emphasis is placed on benevolence, so that relationship and connections play out a lot more,” she explains. “Generally in Asia, we are collectivistic as a society. So, when it comes to sharing information about a product or service that you think is good with your in-group, your word will be trusted a lot more, which in turn will spread the information a lot further.”

However, in the West, especially in countries like the United States, Canada, Australia and New Zealand, the emphasis is on the ability of a store or product. “As long as the brand can get the task done, its competence is high.” This, in turn, will lead to a higher trust in the brand, product or store.

Ultimately, “the hardest of it all is that connection and relationship”, says Prof Tan. She adds that if a retailer or brand can establish that relationship well, and not just use its customer database, it would be able to turn that consumer into a loyal follower.