While financial analysts and political pundits debate the likelihood of an economic recession, consumer behavior and trend strategists are talking about a different kind of decline – a decline of trust. It’s important for retailers and brands to understand the shift in consumer trust, how it’s impacting purchasing, and what they can do to combat skepticism and help shoppers feel supported and informed.
“A Trust Recession”
How many times a day do you ask yourself, “Is that real or is it AI?” Not only are consumers overloaded with information, but they constantly have to filter out misinformation, paid endorsements and far-reaching marketing claims.
“Today’s consumers are operating under pressure from all sides,” says Devora Rogers, chief strategy officer for Alter Agents. “Economic strain, rapid technological disruption, and deep political polarization have collided to create a moment where even routine purchases feel high-stakes….We’ve entered into a ‘trust recession,’ where decisions that were once easy are now bogged down by the need for verification.”
How It Impacts Consumer Purchases
When purchase decisions become complicated, some shoppers may give up and stick with the same product or brand by default, some may trade down to a lower price point (giving them less ‘skin in the game’), and others may decide not to purchase at all.
“Upgrade and price-constrained behaviors aren’t fixed consumer identities; they’re decision modes that shift by category, need state, occasion, region and perceived value,” according to a recent report from NielsenIQ. “Legacy brand strength, price tier, and household income are no longer reliable predictors of behavior alone. Every product must justify its role: as a premium worth paying for, a value worth switching to, or a trusted staple worth keeping in the basket.”
Overall, consumers are relying more on their own experience with a product or store than on brand name alone, says Kearney, who estimates up to $20 trillion in consumer spending will be up for grabs by 2036 as consumer inertia is disrupted and switching accelerates.
What Retailers and Brands Can Do
So what can retailers and brands do to earn trust in this new era?
- Lean into in-person strategies where consumers can touch/feel/try products and have real-life conversations with employees about product benefits and features
- Consider extended return periods, warranties and repair services
- Provide third-party verification of marketing claims. “Evidence-backed claims are emerging as a critical tool to cut through noise, build trust and unlock growth opportunities,” says Euromonitor International.
- Think local or grassroots. “Swap massive, abstract global campaigns for transparent, regional action,” advises WGSN. “Partner with local artisans, source regionally and solve real community problems.”
- Look past a single sale to a more long-term relationship. “Reliable, transparent and human brands will find success where shiny distractions fail,” says Rogers of Alter Agents.