Faith in Brands Declines to an All-Time Low in Canada: Study

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The latest Gustavson Brand Trust study indicates faith in brands is on the decline.

Saul Klein, Dean of the Gustavson School of Business at the University of Victoria, said trust in key institutions has been eroding significantly over the past few years and the average brand trust scores for all brands surveyed are at an all-time low.

“The one thing we’ve really noticed across the board was that almost all brands saw a decline in trust. Even the most trusted brands in the country saw an erosion of trust this year which we thought is a bit strange but also a bit worrying. Not entirely surprising. We’re seeing the broad erosion of trust in all institutions in our society but it is nonetheless really worrying because trust in many ways is the glue that holds our society together,” said Klein.

“For businesses, trust is a really important asset and if we lose trust it’s much harder to regain it.”

In April, the brand trust research team at the Gustavson School of Business mobilized a follow-up study to their 2020 report, conducted annually in January since 2015, to gauge changes in consumer trust in the wake of COVID-19.

He said the decline can be attributed to the rise in consumer skepticism, with consumers growing more conscious of their purchasing habits while closely watching the values brands stand for.

“Brands that were unable to make products available to customers during the pandemic saw a decline in trust scores,” said Klein. “For example, despite the fact that Lysol and Clorox enjoyed increased demand, they lost trust among consumers due to the scarcity of their products on shelves.”

Klein said that while the recovery in trust is always slower than the drop, it can happen if the reason for the decline was more accidental than intentional and if the brand takes real responsibility for making things better.

The initial 2020 study was conducted between January and February of this year and measured 7,800 Canadian consumer opinions about 342 well-known corporate and product brands across 27 categories. This study showed that Mountain Equipment Co-op (MEC), Canadian Automobile Association, Costco, Home Hardware and Home Depot ranked as the top brands overall.

A second, separate study was conducted in April and measured opinions from 1,050 Canadians of 105 brands from the original list. This post-COVID study indicated the most trusted brands during the pandemic were Canada Post, Shoppers Drug Mart/Pharmaprix, and CTV News.

The Gustavson Brand Trust Index investigates consumer trust, the factors that affect it, the brands that succeed at it, and the brands that struggle with it. The team at the Gustavson School of Business established the index in 2015 to raise awareness of the role trust plays in the minds of consumers when making purchasing decisions. The index highlights how shared values, relationship management and customer experience influence consumer trust. It also measures the relationships between brand performance, social equity, trust and advocacy for brands in Canada.

The current environment around the Black Lives Matter movement is an indication of how important trust can be in authority and in well-known brands. For example, PepsiCo Inc. announced this week that it will change the name and brand image of its Aunt Jemima pancake mix and syrup because of the racial stereotype.

“What we’re seeing is that consumers’ expectations for brands to be playing a more positive role in society are increasing. And those brands that are responding positively are seeing a benefit. Those brands that are not responding positively are taking a hit. And in some cases they’re changing really rapidly,” said Klein.

“If you think about Starbucks, a couple of weeks ago when the protests and the issue around systemic racism and the Black Lives Matter protests started surfacing, Starbucks essentially told their employees not to display any open comments or open views around that issue despite the fact that the president of Starbucks issued a statement really supporting the protests, objecting to what we’d seen happening. There was an immediate backlash and accusations of hypocrisy came up.

“And very quickly within another week or two, Starbucks reversed course and they’re actually providing clothing to their employees at the retail level that are making positive statements about the protests. So there is a lot of pressure on brands to respond and to be seen to be taking a positive approach in dealing with more broader societal factors.”

Klein said one of the things that will be interesting in the near future is food and drug stores. During the pandemic, they all received a boost in trust and a big part of that was the fact they were perceived as acting fairly in relationships with their employees in providing additional compensation and putting in place safety measures in the stores.

“But the interesting thing we’re going to be watching is that going to be dissipated, is the trust that was created, going to be destroyed, as those brands are taking away the wage increases. But clearly consumers are looking, particularly in times of crisis, for brands to be seen to be playing a positive role in society,” he added.

The report found that trust in Canadian telecom companies is on the rise. Past year-over-year results had telecom companies showing signs of trouble with nearly all of the companies seeing a decline in their brand trust scores. This year, however, saw three out of the big four telecom companies show significant improvement after the pandemic struck, said the report.

“Millennials are less trusting compared to any other generation. Millennials assign their loyalties to organizations that are proactive in solving long-standing social issues and contribute to making the world a better place. For example, Lush, with its history of donating to progressive groups and advocating for many causes, was the most trusted brand in Canada among ages 18-35,” it said.

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