The report reveals challenges remain for retailers to unlock the full Trust Premium
Forter, the Trust Platform for digital commerce, published the 2024 Trust Premium Report which explores the evolving relationship between consumer shopping habits and brand trust. For the second year in a row, the report found consumers still place a significant premium on trust – on average, spending 51% more with trusted retailers – based on 2,000 survey respondents in the U.S. and U.K.
Despite the impressive “Trust Premium” uplift, consumers surveyed in the U.S. and U.K. ranked their overall trust in online brands a 7/10 – down slightly from 8/10 in Forter’s 2023 Consumer Trust Premium Report. Trust is critical for consumers and, while many factors influence trust, online experience is a crucial component – from account creation and authentication to shipping and returns, loyalty programs and more.
“The digital experience impacts trust more than retailers may think, whether with complicated check-outs, unfriendly policies, or other shopper friction,” said Michael Reitblat, CEO and co-founder, Forter. “By treating their shoppers like people – instead of bots or bad actors – retailers can secure higher average order values and stronger customer lifetime value.”
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Friction has a Hidden Cost
Many retailers use friction to validate good shoppers – and keep fraudsters at bay. But the report found that friction continues to cost retailers money at alarming rates. Seventy-eight percent of consumers surveyed admit they will likely abandon their online shopping carts if the process is too difficult or time-consuming.
Friction-filled experiences, particularly with complicated shipping and return policies, can erode trust in brands, driving customers away. Ninety-five percent of consumers surveyed said that shipping policies are important in deciding where to shop, with 53% abandoning their purchase in the last three months due to restrictive shipping policies. The same goes for returns: 89% said that return policies are important, with 22% admitting they’ve abandoned a purchase due to restrictive policies.
Loyal to Loyalty Programs
The report also found that, despite consumers seeking loyalty programs from their favorite brands, their trust is eroded by security issues with these perks. Seventy-two percent of consumers surveyed agreed that loyalty programs influence where they shop, yet just under 1 in every 5 has been the victim of loyalty abuse – having their online points/rewards stolen – in the last three months.
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Retailers attempting to drive customer lifetime value through their loyalty programs must invest in securing and protecting customer accounts to ensure bad actors aren’t taking advantage.
Holiday Shopping Stress Test
The holiday shopping season will be a stress test for retailers – those able to maintain trust with consumers will secure more wallet share. According to the report, nearly half (48%) of consumers surveyed will spend the same or more on online holiday shopping in 2024, with 48% planning to use buy now, pay later (BNPL) for their purchases. The question isn’t whether consumers will shop this holiday season, but where and how they will choose to spend their money.
“Brands are future-proofing their businesses to thrive in an uncertain economic environment with unpredictable consumer behavior,” said Reitblat. “One of the biggest changes they can make is to invest in knowing who their good customers are so that they can deliver tailored experiences and build lifetime value through mutual trust.”