Diana Verde Nieto, Co-Founder and CEO of Positive Luxury, examines why brand trust boosts the bottom line and how luxury players can enhance the consumer connection.
Last week, whilst in conversation with Luxury Society, Sascha Moeri, CEO of Swiss luxury leader Carl F. Bucherer, alluded to the absolute importance of trust in building the brand’s successful international retail network. Here, Diana Verde Nieto, Co-Founder and CEO of Positive Luxury, examines the concept further to see how luxury players can nurture consumer confidence.
In the last two decades, the definition of trust has changed its meaning beyond all recognition. In the past, your circle of trust would extend to your family, your doctor, and the institutions that surrounded you. With the dawn of the digital age, our circles of trust have grown exponentially, particularly when it comes to purchasing.
The ability to trust is something that taps into our mental well-being. A sense of trust is one of those subliminal triggers to your behaviour – much in the same way as a sunny day, a smile, or doing a good deed can improve your sense of happiness.
“ Trust and consumer confidence can have a direct and profound effect on a company’s profits ”
But how can these offline triggers exist online? And how can luxury brands play a part? The answer is simple – by knowing the brands we buy from are doing good, we in turn achieve a sense of well-being. The ability to feel good about the investment pieces we buy leads to long-term trust, and ultimately, long-term happiness.
Trust and consumer confidence can have a direct and profound effect on a company’s profits. The reputation of a business is essential for its survival, as the world has become more interconnected, interdependent and transparent than ever before.
In the past, trust was something that companies could manage through press releases and word of mouth. Nowadays, consumers can simply Google the truth. The internet has accelerated the rate in which news travels, meaning you can spend eighty years building a reputation that can be trashed in ten seconds. There is no way to hide behind the billboards. In this lightning-fast world of news and reviews, there can be no discrepancy between what you do and what you say.
Online, value is a given. Content, information and entertainment are free. Flights, clothes and food can be compared and cross-referenced, and the end result is a conformity of price. When the only choice we have is the difference between a couple of pounds, good value for money is no longer enough. In a world where the ability to compare prices are a given, trust becomes the major differentiation point between brands. The behaviour of companies, and the ability to trust them, is fast becoming the only way to stand out from the crowd.
So how can companies utilise the trust-centric mindset of the modern world? It starts with a shift from value to values. Openness, honesty and integrity are now some of the central driving forces behind a consumer’s decision to buy, and companies need to embrace this new way of thinking.
“ It’s not just about how a company is perceived from outside, but also how it is viewed from the inside out ”
Technology is a brand builder – it allows luxury brands to create deeper emotional connections with consumers. It’s surprising how much luxury brands are not embracing technology. I’m not talking in ‘marketing speak’ about e-commerce or social ‘platforms’, I’m talking about being approachable and allowing a conversation. Luxury is not about exclusivity and status anymore but about networks, connectivity and community.
Trust is not just about how a company is perceived from outside, but also how it is viewed from the inside out. If the employees of a company can truly trust that their employer has their best interests, and the interests of others at heart, they will invest much more of their time and energy into the development of that company. This is especially important for millennials.
Companies must create an environment where people can work well together and can really engage to the mission of the company – they must see that everybody in the organisation from supplier to the CEO are treated well and are allowed an environment of freedom for experimentation.
“ This transfer of trust is not free ”
All relationships are based on trust. If consumers can trust luxury brands, they will make time to listen and engage with them, share their content and tell their stories.
This transfer of trust is not free – in the past a veneer of trust and professionalism was bought by amazing in-store customer service. But today, consumers demand more for their trust – they expect that the product does not damage the environment or society but enhance it, and they expect empathy not just offline but through the screen. In other words, when a consumer trusts a brand, it is not a compliment that should be taken lightly.
To further investigate the connection between consumers and luxury brands on Luxury Society, we invite your to explore the related materials as follows: