Retailers MEC (Mountain Equipment Company) and Costco have capitalized on their investment in customer-centric approaches and their value offering to tie for the most trusted brands in Canada in the ninth annual 2023 Gustavson Brand Trust Index (GBTI).
The Index is a research study by the Gustavson School of Business at the University of Victoria.
“The two brands’ commitment to value-driven offerings, customer service and competitive pricing has resonated with consumers searching for affordability in the face of inflation,” said Saul Klein, dean of the Gustavson School of Business at the University of Victoria.
After achieving the top spot in the Gustavson Brand Trust Index in 2019 and 2020, MEC faced a significant decline in 2021 following the dissolution of their co-op structure and sale to a private investment company in the US, falling into seventh place. However, through determined efforts, they reclaimed their first-place position as the most trusted brand in 2023.
“MEC’s incredible comeback story showcases the power of resilience and customer loyalty, propelling them from a moment of crisis to reclaim their position as Canada’s most trusted brand,” said Klein. “Their story inspires other companies to prioritize transparency, sustainability, and customer-centric approaches to regain trust and thrive in a competitive market.”
Klein said the Gustavson Brand Trust Index is a national, in-depth analysis of the role brand trust plays in the minds of consumers when making purchase decisions.
Based on the perceptions of 13,188 Canadians, measured in early 2023, it ranks and evaluates trust in over 400 brands. Brands are then assigned to different categories and compare their performance on the various determinants of trust and their likelihood to be recommended.
“Earning trust in a purpose-driven economy is achieved by acting with competence and good intent. It is lost when these behaviours are not demonstrated. This year we were struck by the declining trust in Big Tech companies which have tightened their grip on our lives, dominating how we communicate, shop, learn about the world and seek distraction and joy,” said Klein.
“Even while many of us have spent lots more time with technology since the pandemic, we are becoming more concerned about the enormous amount of power these companies wield and our vulnerability to their actions. Even some of tech’s biggest supporters have started seeing the potential for worry here. Unless these companies adapt to rebuild trust we are likely to see more restrictions on their dominance coming from governments.
“The good news is that this troubled era demonstrates the benefits and the importance of businesses using their power and voice in ethical, transparent and authentic ways that are good for people and the planet while still recognizing the need for profits. There are enormous opportunities for brands to differentiate themselves from others, bolster their competitive advantage, and stay relevant for the future by re-focusing their efforts on what matters to their consumers, employees, and investors alike. This opportunity is particularly pronounced for the younger generation, those on whom future business success depends.”
The report said a key finding this year was brands that offered savings and value to consumers increased their trust rating, influenced by rising inflation and hits to people’s bank accounts. Those brands that seemingly turned a deaf ear to rising costs saw their trust scores erode.
Other Key Findings
- WestJet has lost altitude, while the airline industry as a whole is facing a severe crisis in customer trust and loyalty. To regain lost ground, airlines must prioritize exceptional customer service and operational excellence to win back the hearts and minds of Canadians;
- Netflix’s decision to crack down on shared accounts, coupled with the subsequent decline among its viewers, highlights the growing importance of trust in the streaming industry;
- Inflation and the pursuit of value saw trust in Loblaws plummet;
- Toyota is the most trusted brand in the Automotive category while trust in Tesla dropped sharply;
- Among Canadian youth, Four Seasons Hotels & Resorts ranked ninth and as the most trusted brand in the hotel category, perhaps inspired by popular TV shows and social media influencers;
- BC local brand, Kicking Horse Coffee is the most trusted brand in the Coffee/Tea Category;
- A significant decline in trust in CTV among respondents aged 35 and over raises concerns about the network’s reputation and its ability to retain loyal viewers, influenced by the dismissal of veteran journalist Lisa Laflamme.
Klein said the research study categorizes the responses of people into three dimensions when it comes to brand trust.
One is functionally based. Do you trust the brand to keep their promises effectively? Are they reliable? Are they consistent? Do they provide good value for money? High quality? Innovation?
“The second thing is we look at more relational issues which really comes back to the service and the individual customer. So how well do I think they’re treating me as a customer? Do they communicate honestly with me? Do they protect my privacy? Do they fix my problems if something goes wrong?,” said Klein.
The third dimension is more of a value base. Consumers tend to trust brands that are doing things that have more of a positive societal impact. Does the brand respect and protect the environment? Do they contribute to the local community? Do they treat employees well?
“We think there’s a bit of an evolution where historically it was all about functional trust. But sometime in the 1970s and 1980s we saw this movement where it was harder and harder for brands to differentiate themselves on the basis of functional trust so the service component became more and more important,” said Klein.
“Where we are now is we think we’re on the cusp of the next evolution. So you can think of it as a product-based economy to a service-based economy, we’re suggesting the next evolution is to a purpose-based economy where again it’s harder and harder to differentiate oneself on the basis of the quality of one’s service and what becomes the differentiator going forward is really about the broader contribution of the brand to society and in some ways that might be the most sustainable basis of differentiation because it’s the hardest one for anybody else to copy.
“You can copy somebody else’s product features. You can reverse engineer. You can benchmark against the service standards but the value based elements are really embedded in the culture of the organization and those are hard to copy.”