Sure, Price, But Trust? That’s the Clincher, with Andrea Leigh, Founder & CEO, Allume Group

Transcript

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Peter Crosby (00:00):

Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age.

Peter Crosby (00:16):

Hey everyone. Peter Crosby here from the Digital Shelf Institute. Every quarter, the e-Commerce Education Consultancy Allume Group consolidates the output of expert conversations, annual reports, and the latest data to create their Allume Insider report or AIR. It's chockablock full of the most current insights into the present and future of e-commerce. Andrea Leigh, founder and CEO of AIlume Group, rejoins the podcast with the takeaways from Q2 based on their research. Andrea, welcome back to the podcast for this quarter's review of the Allume Insider Report.

Andrea Leigh (00:55):

Hi Peter. Thanks for having me.

Peter Crosby (00:57):

Of course, of course. Well, these issues have been very much thematic. You've sort of organized around particular topics, and in Q1 that was authenticity, Q2 was loyalty, and in Q3, everyone ready trust. And so I trust your takeaways are fascinating. I mean, they all do sort of fit together.

Andrea Leigh (01:23):

They do. You really need them to all work together and you have to be an authentic brand in order to gain trust, in order to have shopper loyalty. So I guess you could argue we did them in the wrong order, but this one was coming through loud and clear with the explosion of AI in commerce and shoppers trying to figure out what they can trust and what they can't and what's real and what's not. So felt like a good time to talk about trust.

Peter Crosby (01:51):

For sure. And what were your starting reasons why trust matters in

Andrea Leigh (02:00):

This journey? Yeah, I think the shopper journey is just becoming more and more complex. So according to a recent study by Google, 60% of shoppers are taking six or more actions before making a purchase. So a lot of pre-work happening before purchase, and it's really about just keeping your promise as a brand every step of the way, all the way from the product detail page to the post-purchase experience. Just really keeping your promise. But I think that the stat that really got me and got us interested in trust this quarter was that 37% of consumers prioritize trustworthiness over price. And there's been so much discussion about shoppers being so price sensitive now, and it's certainly true, but for a large number of shoppers, this idea of a brand being trustworthy is actually more important. And so we unpack that a little bit and tried to break it down into what are the three components and what can brands do.

Peter Crosby (03:03):

And you had mentioned ai, and it seems to me right now that consumers are interested in ai but are a little concerned about being fooled or misled and perhaps rightfully so. Is that what you think has brought that maybe trust more to the forefront as we sort of enter this unknown period of AI development?

Andrea Leigh (03:36):

Yeah, I think especially in digital commerce where shoppers are both interfacing with AI in the form of customer service and chatbots and things like that. But also we're using a lot of AI to make that experience highly relevant for the shopper. And I think it's about, well, as we talked about in a previous report, it's about transparency, so just being really transparent about what's real and what's not and where we're using. And I think in a previous episode we talked about the Bank of America's digital assistant. I think she's called Erica, but I might have that wrong now. No, she is. And she's like, I am a digital virtual assistant. I can answer many of your questions, but I can't answer all of them. And so you go into that experience with a certain level of expectation that's tempered by the fact that you're dealing with AI versus an experience. I had recently interfacing with a chatbot on a commerce site that it seemed like it was impersonating a human. And then it was after a few back and forths was like, let me connect you with a human because I can't answer your

Peter Crosby (04:46):

Question. I thought I was talking to him.

Andrea Leigh (04:48):

Wait a minute. So I think this idea of transparency and then transparency and how we're using shopper's data as well. So if you think about using shopper data to make the experience more relevant or to personalize, which we'll talk about later, making sure that we're clear about if we're gathering data from the shopper, what we're using, and really only using data we're gathering from the shopper. I think what we found last quarter in our report around loyalty was that a great loyalty buster is when you're using data about a shopper that they didn't give you. And it's like you're reaching a little too far.

Lauren Livak Gilbert (05:26):

It's that creepy factor, a thin line, you can't cross that line.

Andrea Leigh (05:31):

Exactly. Exactly. And all of the data shows that shoppers are pretty well embracing ai, but definitely this idea of transparency is really important.

Lauren Livak Gilbert (05:45):

And Andrew, you found there were three main areas of trust, so we're going to dive into them. What is the first one that you found?

Andrea Leigh (05:52):

Yeah, in our report we talk about three ways to gain shopper trust and to keep it. The first is to add value to me. The second is to be relevant to me, and the third is to be inclusive of me. And so really if we start with adding value, adding value is, there's a number of different ways to do this, but I think it's really about finding ways to add value across the entire shopper value chain. So everywhere from starting with the product discovery, and that encompasses social media, retail media, advertising, user generated content going into consideration, activation and purchase. So consideration, making sure we have really accurate and compelling information on our product detail pages, making sure that we're leveraging as much as possible user generated content, and then going into activation and purchase offers, coupons, personalization, more UGC, but then also post-purchase and thinking really about that customer service experience, remarketing, subscriptions, et cetera.

(07:05):

But to kind of bring it all together, 73% of consumers are looking for ways to make things simple when there's too much information. And one in three say that lack of knowledge about a product is a barrier to purchase. So when we think about adding value, it's really pretty simple. It's make my life easier as less is more. Exactly. Ease the journey, ease the journey. So I think there's kind of two main areas of focus and adding value. It's eased the journey and it's build knowledge. So going back to that stat from Google, about one in three consumers saying lack of product knowledge is a key purchase barrier. So even that's pret trusts, right? It's just like you have a barrier in place. And I think really in the add value, to me, a big piece of this is UGC. We just talked about a lot of things across the shopper value chain in the marketing funnel.

(07:58):

But the UGC piece is really key. 60% of consumers agree. UGC is the most authentic ways that brands can market themselves. And then obviously we've all seen data about social media campaigns that include UGC and how they have higher engagement email campaigns that included have higher click-through et cetera. And 80% say UGC impacts buying decisions. And the biggest mistake we see brands make on UGC is thinking that having a strategy for getting enough product reviews on Amazon is a strategy gc, that's UGC, but that is not a UGC strategy. It needs to encompass online reviews of course, but also social media shopper forums, creator content as well as influencer content. And so it's so much bigger than that, but it's also important to think about what you're trying to accomplish with your UGC strategy. So it's just like anything else, we can't just go into it with guns blazing.

(09:05):

We've really got to think about are we trying to drive engagement or are we trying to drive awareness? Are we trying to drive purchase? What are we really more focused on? Because that will, that'll help you figure out what you need. And particularly to scale. I think that's important too. Most of the brands that we're talking to are working with technology providers to help them scale across UGC, especially when you start thinking about content creators and influencers. I mean, we sit through a lot of demos to stay current on what's going on out there. And we've seen that's been a really busy space. More recently,

Lauren Livak Gilbert (09:46):

Last week at canne, one of the things that was top of mind was creators and I was sitting in on this session, they were saying that more consumers interact with creator generated content than agency generated content. And that has fundamentally shifted in the past year or so. And so I think making sure from either a UGC or a creator specific content that you're building that trust in an organic way to the brand. And I love your thought around that, Andrea as well, that it needs to be a strategy. You can't just say, Hey, we want an influencer. Making sure that that is fully connected to the brand, your story, your mission, and they're talking about the product in a way that is building trust for you as a brand. So that was a really big topic last week, and I thought that was really interesting because agency content is usually the way that you're going from a content creation standpoint on your PD P or D two C, but now it's much more influenced by the creator side.

Andrea Leigh (10:44):

I love that, Lauren. And that's a great segue into kind of the reverse of trust, which is trust busters. And the example that we featured in our report, we had a couple, one of them I think was one that we talked about came from you in cat trees where you're showing this. I mean, this is a really basic example, or basic is the wrong word. It's a very representative example. I think this happens to a lot of shoppers where you see this product detail page image and the scale of the product is just totally off because they've used inexpensive AI or maybe not super accurate ai. And Lauren sent us this great picture of this cat tree she bought where the cat's very small and the stand that it's on is very large. And then a picture of the actual cat where it's like the stand is very small and the cat doesn't fit on the wedge, so just mean really basic brilliant basics.

(11:37):

Inaccurate product images are trust busters, right? So when we talk about trust and ways to add value, there's a lot of ways to add value. You can get very sophisticated and nuanced in that approach, but it's also important to just really think about don't lose value. And ways to not lose value are just giving inaccurate or misleading information on your product detail pages. And that's a bare minimum. And I think the other part of adding value around Trustbusters is that when we're working with these influencers and content creators, they need to be honest also. And that can really go sideways for brands as well. There's this great L'Oreal example. Did you guys hear about this? McKayla Fake lashes? Yes,

Peter Crosby (12:22):

Yes, yes.

Andrea Leigh (12:24):

So she's reviewing this L'Oreal product, it's the Telescopic Life mascara, and she's a beauty influencer. And you can look up this hashtag and you'll get tons of reposts of it with criticisms on it or whatever, but it's McKayla RA drama is the hashtag. But in any case, she posts a picture of herself using the mascara and then the sort of after, and it's never been confirmed, but it seems as though she's actually wearing fake lashes. And so it maybe wasn't the mascara that made her lashes so long and this thing just went nuts. And then there's all these other beauty influencers who are reposting it and they're like, we can't believe she did that. Content creators have to be honest. I mean, I think it's difficult because we, again, going back to transparency, we have an expectation of content creators that we understand. I mean, there's an understanding and a transparency in that they're trying to sell something, but we aren't expecting to get lies. And so it's kind of this weird middle ground where it's not a customer review. We know it's not an Amazon PDP review, but we also know it's not a commercial and it's something in the middle. And a great discussion that we're having when we do this as a workshop is like, was this good for L'Oreal or not? Because certainly got a lot of press.

(13:49):

It certainly got a lot of press.

Peter Crosby (13:53):

I guess it's more a hit on her brand maybe than L'Oreal's, unless it comes out that L'Oreal had told her to do that, which would be a very bad idea

Andrea Leigh (14:05):

And probably pretty unlikely. Yes, I agree. But I think that's what's interesting is that the brand was pretty insulated from the criticism. The criticism was on the content creator. And if you rewind a gazillion years to, do you guys remember Jared, the subway guy? Yes. Before we actually had social media, he was kind of an influencer. And I mean brands have done this since the beginning of time, picked famous people and have them Good State Farm endorse the brand. Totally. Yeah. I mean this is the thing brands do, but that really went sideways on them. But it reflected really poorly on Subway at the time, not on Jared. And I think we've now moved into a new era where, I mean in this case, the brand was pretty insulated from this, and it was really just all about Mikayla and whether she was a liar or not. So I think that's an interesting evolution that we're on. It's a little bit off topic, but the content creators are now taking more responsibility for some of that authenticity.

Peter Crosby (15:07):

And so if value clearly important for trust, the next one that you talked about was relevancy. You have to be relevant to me for me to trust you and tell me a bit more about what that means in this context of trust.

Andrea Leigh (15:26):

Yeah. Well first I think it's important to think about the difference between personalization, targeting, and relevance. Because even as we were doing our research for this report, we noticed that even research studies are conflating these definitions and they're not the same thing. So what we learned is true personalization is actually individualized. So it's based on user specific data, and that's browsing history, purchase history, demographic data that you have about that user or user preferences. And so when you look at Amazon's automation and personalization, not all of it is personalization, but a lot of it is because it's using your past browsing information and that is truly personalized to your experience. If Lauren and I both went to Amazon, we're not going to get the same automation and personalization. And Netflix is another great example. It's based on your viewing history. So that's personalization targeting is a little bit different.

(16:26):

And these are the two that I saw getting conflated the most because when we think about retail media, we're like, oh, well it's personalized, but it's not personalized because we're not really using, in a lot of cases we're using using search data, but it's not specific to the individual when you're talking about search ads. And so targeting data is segment based, so it's based on demographic, psychographic, geographic, or behavioral segments and not necessarily specific to the user. And so that's a little bit different. And then relevancy is more broad context. So it's like I'm giving you an ad for sunscreen while you are shopping for a suitcase or something. So I'm saying there's a contextual fit, so there's a situation or need state, and then there's an element of timeliness and broad appeal, seasonal promotions, et cetera. So first I think it's important to separate those three.

(17:22):

And we found in our research that people tend to use some of those terms pretty interchangeably. That aside relevancy is really about understanding the shopper's needs. 75% of consumers say they want brands to demonstrate that they understand their needs, and 61% want that understanding reflected in the communications from the brand. So this is where you could extrapolate to say, users want ai, shoppers want AI in the experience, right? Because in a lot of cases, that's going to be the most efficient way to get there. And just in the physical world where you walk into a store and they recognize you or you have that experience, we need to replicate that in the digital experience. So recognizing your best shoppers can really go a long way. And more often we're seeing shoppers' expectations that those consistency and communications straddle the online and offline experiences. So I think really thinking about ways that you can just recognize those best shoppers and reward them, and some of the things we talk about in our loyalty report I think is really important as well.

(18:40):

But I think the key benefit of relevancy for brands is that it can encourage shoppers to break up routines and try something new. So 75% of consumers say they get excited when they come across a new product that's perfectly aligned with their needs. So that's the opportunity, the opportunity for brands to say, to get in front of a shopper with a highly relevant offer and maybe a shopper, a new shopper, and break into new households and grow the brand and increase household penetration. So that I thought was really interesting thinking about how do we hear all the time, how do I get a shopper to brand switch? How do I get them interested in my brand? And it's really about giving them a highly relevant offer, right time, right place, right offer, and encouraging them to break up routines. And there's a lot of examples of this. I think we had another one that was around, I think another one we talked with Lauren about, but the Primally Pure company. And so basically, and maybe you want to share your experience, Lauren, this was really cool. We actually put this one in the report.

Lauren Livak Gilbert (19:59):

Oh, I love it. So privately pure is a clean deodorant. I went on this whole no aluminum, no chemical thing. And so I used the deodorant and then they sent me an email and they said, Hey, we're getting into lotions and skincare line, and we saw that you use this specific type of deodorant and this lotion is going to have this specific type of ingredient. Would you like to try it? And that got me into their skincare line because I was like, oh wow, there's all these other options that I didn't know about and I really love the deodorant. And that's happened with a lot of other clean beauty products where I started with a shampoo and then went to a skincare, but they specifically said, Hey, we know that you're conscious about your ingredients and about your sensitive skin, so here's another product that you might like. And I ended up really liking it. So it was a great example of introducing me to another element of the brand.

Andrea Leigh (20:51):

Yeah, and I think in, oh, sorry, go ahead Peter. Well, I was

Peter Crosby (20:55):

Just going to say, I guess that's where I start to, I keep trying to go back to your drawing distinctions between relevance, personalization and targeting. And whether I'm trying to figure out whether they're on a continuum with personalization being the highest relevance, I don't know, and then targeting how broad a brush is it because listening to Lauren, that felt like personalization to me because they had first party data that she had bought this thing for this reason, but that still makes it relevant. So I dunno, how should I be thinking about this kind of relevance continuum and am I overcomplicating it?

Andrea Leigh (21:41):

I don't think you're over complicated overcomplicating it, but I think that obviously the more highly personalized we are with our branded communications, the higher the conversion rate. I mean, we see that all the time across, that's a marketing 1 0 1. But I think for a lot of the brands that we work with, if they're not operating D two C, they don't have the capability to be truly personalized. And so they're often relying on the retailer's capabilities through retail media to engage in targeting or maybe some degree of personal relevancy and targeting and maybe some degree of personalization. And so I think it's kind of marrying whatever way you have to be relevant to that shopper with the capabilities that are available to you within the context of shopping. So I think that's an important piece of it. Going back to the being relevant piece, if you want to think about it across generations, and this didn't really surprise me, this kind of followed how I would expect, but this idea of encouraging people to break up routines and try something new, it's actually most effective with millennials, which I thought was interesting.

(23:00):

41% report being likely to switch for better personalization, primarily in my deduction here was that it's a shift for convenience, which I'll come back to in a second. Gen X and Gen Z were lower at 26% and 34%, and then baby boomers and seniors are least incentivized to switch by new offers, et cetera. This is from a payments report, and we have all of our sources at the end of the report. There were some really, really cool reports on trust. So I think that's interesting. And my take on that is, and I think we've talked about this before, but millennials are the most time crunched generation. The ones usually of family the age, having families and aging parents and built in the peak of their career. So they're just really time starved. And I mean, I remember from my time at Amazon gaining when a shopper became a parent, a first time parent, that's a time when a lot of brand loyalty goes out the window and there's a lot of brand switching that happens. Same. There's certain milestones in life that drive that, but becoming a parent's one of them. So that's sort of my take on why millennials are more likely to switch for better personalization.

Lauren Livak Gilbert (24:22):

And I also think the relevancy piece is you have to do it the right way. So what I mean by that is I've gotten targeted for a product, I've bought it, and then continuously be targeted for the same product. And then at that point it's no longer relevant, right? Because I would want to see something else and I don't want to keep repeating that same ad when I've already purchased it.

Andrea Leigh (24:44):

Exactly, exactly. And we have an example of that in the report too, of these earrings that I was merchandised on Instagram reels a million times and I finally bought them and then they kept, and I bought them on Instagram, and then they keep marketing them to me. I bought them on the Instagram platform, they should know. So I have a picture of myself wearing the earrings while I'm getting the ad.

Lauren Livak Gilbert (25:11):

I love it. You should tag your brand Brand,

Andrea Leigh (25:14):

Yeah. Waste of money brand while wasted ad dollars.

Peter Crosby (25:19):

Yeah. Every once in a while I will have an experience where one of the social media channels will say, do you want to continue to see ads about this product? And I super appreciate that because I don't bought it and there's no other way for them to know unless I suppose bought it through that social media channel. But it's definitely a thoughtful way to relieve you from the pain of seeing those earrings again or whatever it's

Andrea Leigh (25:48):

Exactly.

Lauren Livak Gilbert (25:49):

Or buy them for all your friends. Last but not least, Andrea. So the third element of trust is be inclusive of me. So what do you mean exactly by that and how can brands focus on it?

Andrea Leigh (26:01):

Yeah, so this is something that I think is something really interesting that is changing pretty quickly over the last 10 to 20 years. So there, it used to be that a brand had more value if it was exclusive, exclusive. So I think luxury beauty and luxury fashion, and the example we use in the report is Abercrombie. I dunno if you guys shopped in an Abercrombie store circa like early two thousands, but I have a great quote from their former CEO Mike Jeffries. He says, we go after the cool kids, we go after the attractive All-American kid with a great attitude and a lot of friends, are we exclusionary? Absolutely. So they're selling this idea of exclusivity, right? They're not a brand for everyone. We're not for everyone. And there are a lot of brands that we have seen take this stance previously. And I think that consumer attitude toward it is changing.

(26:59):

And a lot of them are in the fashion space. If you look at Brandy Melville, they only sell one size, and I think they've come under a lot of scrutiny for not being inclusive enough. So that's one. And then, I mean, I'm sure everyone knows the famous Lululemon quote from a while ago. Our leggings aren't for every body type or whatever. So this idea of exclusivity used to be really important and it was something that helped build a brand. But I think that the tide is turning on that and that this idea of being more inclusive is cool, and it is now what drives a brand. And we're seeing that the data showing that younger demographics, particularly Gen Z and millennials, are very driven by this idea of inclusivity. So they're more likely to engage with brands that promote diversity, which includes representation across race, gender, body type. And going back to the Abercrombie example, the current CEO Fran Horowitz in 2016, which is still eight years ago, says, we are a positive inclusive brand with a nice sensibility, very different from what shoppers encountered in the past. And we have a screenshot of their marketing. So previous marketing was these half naked homogeneous group of very

Peter Crosby (28:18):

Predominantly white,

Andrea Leigh (28:20):

Predominantly white heterosexual on asexual somewhere, literally they're on a beach. And now it's this great group of super inclusive group of this representative of a lot of different races and lifestyles and all of these things. And that's cool now. And so I think that it's important that brands listen to what their shoppers are, what they want. And so the way that we see best in class brands doing that is through social listening. So it's listening on looking at your product reviews, et cetera. But it's really taking a step back and looking and engaging in user forums, Reddit, discord, wherever it is that your shoppers are talking about. You what Instagram, Facebook, I don't know. It depends on your brand where you have kind of a bigger population hanging out, but thinking about what they're saying about you, what they think about your brand. And it's the way we're seeing more cutting edge brands make consumers feel heard and respected because you can be inclusive of your shoppers, not just in your marketing, but also in your product development cycle.

(29:38):

And we've seen some really cool examples of up tumor brands. One we talked about last quarter, which was Mad Rabbit. They're the tattoo aftercare brand, and they run a Reddit forum called Tattoo Advice. So they're really in tune with this population, what they're looking for, what they care about. And it's a very active Reddit forum. We had another one was Wise, which is an electronics brand who is also running a Reddit forum for their users. And they're using that to learn what enhancements to make to the products from the product development cycle, what new products to bring to market. And they have a nice population there, but I think you don't have to run a Reddit forum to listen to your shoppers. There are a lot of ways to do it and then to reflect that back in your innovation and in your marketing and make the shopper feel heard and respected.

Peter Crosby (30:35):

And you also have to be consistent. So we're recording this right now in June, which is Pride Month. And I find as a, I'll speak for myself as a gay man that I find some company's use of Pride Month as disingenuous and not really authentic. And then on July 1st gone and never to be mentioned again until the following June. And while I appreciate, well, no, maybe I'll just stick with my antipathy for it. I would think there's opportunities to demonstrate some of that interest in the community outside of the one month of the year. And it sounds like investing in Reddits and conversations and being present with the communities that you are interested in throughout the year is probably a more authentic way to stay relevant and be more believed when that time comes around in 2025.

Andrea Leigh (31:37):

I love that you said that, Peter, because I think it's a great example of show versus tell, right? So for a brand to be telling everyone that they support Pride Month is one thing for them to actually show it as a different thing. And we actually talked about this in our authenticity report as well, which is, and brands, I think shoppers are getting savvier and they're doing their research and brands that just say they stand for something and don't back it up. So I think the example we use was the Colin Kaepernick Nike endorsement. Nike made a big, they used Colin as sort of a figurehead and talked about how they really supported Black Lives Matter, but then there was a huge backlash because they did not have any people of color on their board, not in their executive leadership team. They have to tell Anne Show. And if you're going to tell, you actually have to be able to prove it. And I think that's a great point, Peter, because we do see a lot of companies use inclusivity as a marketing tool.

Peter Crosby (32:51):

So Andrea, as always, the report from which this commentary is taken is so full of fascinating data and sources that your Intrepid team has gathered. So I really want to make sure that our DSI audience can get their hands on it. So just to check, as always, they will be able to come to the partner section of the DSI site to find the report. It will be at the top of things, is that correct? Again, this quarter we'll have it up on the DSI site.

Andrea Leigh (33:26):

Yep. It'll be up on your site. It's also on our site, www.allumegroup.com. It's a free report. We also do it as a workshop for a lot of our clients as well, where we take some of the examples and make them a little more specific to their category and kind of workshop some ideas there. Yeah, and I think probably the most value, I mean, the report is interesting, but there's a lot of value in the notes section. We include a lot of the reports we're referencing, and some of them, I mean, we've included little snippets and pieces to pull our story together, but there's some really great comprehensive data out there about shopper trust and how to build that and what that looks like.

Peter Crosby (34:01):

Andrea's team does the work for you so that you don't have to, and we appreciate you doing the same for us every quarter on our podcast. We love having you here, Andrea, thank you so much, and thanks to your team for putting it together.

Andrea Leigh (34:15):

Thanks for having us.

Peter Crosby (34:17):

Thanks again to Andrea for all the wisdom. The reports, as I said, are also available in the partner content section under the resources tab on our website, digital shelf institute.org. Become a member. While you're there, why don't you, thanks for being part of our community.