There has been a dramatic shift in consumer loyalty and purchase considerations in the latest 2021 Gustavson Brand Trust Index (GBTI) following a “tumultuous” year with the on-going COVID-19 pandemic.
The Index found that previously trusted brands such as Amazon, Whole Foods, Air Canada, and Tesla Inc. dropped in the rankings as consumers felt that the companies’ values no longer aligned with their own.
Saul Klein, dean of the Gustavson School of Business at the University of Victoria, said more than ever CEOs are being viewed as societal leaders entrusted to take a stand on social issues from climate change to addressing racial injustice.
“As the world climbs out of the pandemic, brand awareness is no longer the currency of business — consumer trust is the priority. There is a need for companies to rethink how they are driving positive societal change,” he said.
“Amazon may be past its peak in terms of brand trust. While more Canadians have used Amazon services than ever before, concerns about the company’s broader impact have resulted in Amazon dropping sharply in this year’s study. Whole Foods had always prided itself on its employee culture, but the company’s brand trust and advocacy scores plummeted in 2021, and employee relations may have played a part in that.”
This is the seventh year of the Index.
According to the study, Amazon lost 17 points in overall brand trust in 2020. The report attributed this sharp decrease in its brand trust score to the numerous controversies Amazon had faced, including accusations of monopolistic behaviour and allegations of poor employee treatment/working conditions, which culminated in employee rallies and concerns over privacy.
The 10 Most Trusted Brands in the study were:
- Canadian Automobile Association
- President’s Choice
- Costco Wholesale
- Home Hardware
- Mountain Equipment Company
- Quaker Oats
- Lactalis Canada
- Canadian Tire
“This year it’s all about how brands behave responsibly during the pandemic. We’ve been looking at the three dimensions of how consumers look at brands. Ability, which is a product functionally-based dimension. Affinity, which is really relationship and service-based. And thirdly is the value-based, authenticity dimension, and it’s this one that we’re seeing start to take strong shape this year — more strongly connected with overall brand trust, it’s a stronger indicator of part of the word-of-mouth sentiment than it has in the past,” explained Klein.
“The brands who have responded in ways that were perceived by consumers to be acting in the best interests of society have enjoyed increased levels of trust, while brands that were seen as acting more in their own self interest, and trying to protect themselves during the pandemic, saw a fall.
“And it’s not necessarily correlating with usage. To me one of the most interesting findings this year was around Amazon and we have seen trust in Amazon dropping before the pandemic but during the pandemic it continued to drop quite sharply even though people were using Amazon more and more. The key weakness in Amazon that we saw coming out was on that authenticity, value-base dimension where consumers just don’t trust Amazon to be acting in the broader societal interest.”
Klein said trust in key institutions, in society, and in business, has been eroding over the past few years.
“I think our societies have become much more polarized. There’s much more concern about truth and who you believe, what you believe, and in some cases, certainly spilling over from the United States, a very deliberate undermining of truth and that certainly erodes trust,” he said.
“But overall trust in brands has actually been pretty constant. At the brand level it’s a little bit different because consumers are really basing the trust more on their experience and what they’re seeing about a particular brand rather than the social media context.”
Other key findings from this year’s Index include:
- Younger consumers are less trusting than older consumers. The GBTI study found that millennials are less trusting compared to older generations. This appears to be due to the younger generation’s inclination to assign their loyalties to proactive organizations who they perceive to be helping solve long-standing societal issues and contributing to making the world a better place;
- Trust in media is at an all-time low. In the Spring of 2020, the media category saw a spike in trust as people tuned in at the beginning of the pandemic. Since then, the trust bubble has burst, with all traditional and new media brands (except for Maclean’s Magazine) giving up most (if not all) of the gains they saw early on. Social media brands such as Facebook remained among the least trusted in the Index;
- Trust in Canadian telecom companies is on the rise, but it is still the second least trusted category. Past year-on-year results had telecom companies showing signs of trouble, with nearly all of the companies seeing a decline in their brand trust scores. Three of the big four telecom companies, however, saw significant improvement after COVID-19 struck as they provided critical infrastructure for both work and social interaction.
The report highlighted four brands to watch in 2021:
- Amazon’s trust scores plummeted last year. Will Amazon continue to fall out of favour with Canadians in 2021?
- After coming under fire for hiring influencers to promote travelling, will Air Canada see brand trust fall?
- In the first four months of 2020, Google saw a 14-point jump in its brand trust score. Will Google sustain its recovery in 2021?
- How will the sale of MEC to a U.S.- based private investment firm affect consumers’ trust?