Why is ‘trust’ your next biggest asset?

Executive Grapevine’s Editor Dan Cave interviewed Nina Glass, Consumer Specialist, Eric Salmon & Partners (published 12 October)

A little more than a week ago, 28 September, GfK published the September’s Consumer Confidence Index for the UK, with measures indicating a less-than-bullish position – to put it mildly.

Negative figures are never encouraging to see for those in consumer-facing sectors, and figures as marked as -27 for sentiment about the general economy over the next 12 months, as Nina Glass, Consultant at Eric Salmon & Partners says, “hit one squarely in the face.”

Luckily, Executive Grapevine got to sit down with Glass to find out what this means exactly – with confusion and uncertainty being the first points that she sees.

She said: “Interestingly, shopper sentiment about personal finances over the last 12 months and year ahead were still within positive ranges, down three points, but still at +1 and +5 respectively.

“These figures reflect confusion or, in Bank of England speak, the uncertainty in the UK economy. Indeed, it is only another seven months until the UK is expected to take the leap and depart the EU. Brexit is now well and truly looming on the horizon.”

Nina adds that with so much uncertainty, trust is set to become its own currency as consumers try and parse what’s good and what’s not on a shaky consumer landscape. With Millennials set to become the biggest spenders, it’s a group that well-known brands, businesses and start-ups will have to appeal to.

Nina explains: “Millennial spending power is set to overtake Generation X in 2020. They are a critical economic base – 1.8 billion people worldwide and 13.8 billion in the UK. And what do we know about Millennials? We know they have grown up in a world which to them is unlike that of the post-war, “anything is possible” Baby Boomer Generation where life was rosy and somehow ‘easy’

“There is an intrinsic pessimism exuded by this generation – a sense that one cannot change certain things – and, with it, a marked downturn in that important attribute of trust.”

In a study reported recently in the Financial Times, it was found that only 19% of Millennials believed others could be trusted compared with 40% of Baby Boomers and 31% of X-Gens.

Nina added: “It’s a big part of the reason why Influencers have become so much a norm ‘go-to’ for Millennials. The Telegraph recently published an article highlighting a few of the world’s leading lights in the ‘influencer” category, including Niomi Smart whose “fanbase is as large as the population of Ireland, with 1.5 million Twitter, 1.6 million Instagram, and [1.6 million] on YouTube.” The Influencer is perceived as ‘real,’ ‘authentic,’ someone who purports to be a person to believe in and trust.

“So too, brands with a strong social responsibility, healthy lifestyle, and attention to the environment stand out from the crowd for Millennials. This doesn’t mean expensive products and services: indeed, the shared economy, built largely by Millennials, is based on the lower rather than more expensive. And it doesn’t mean big. Millennials feel affinity with little brands, local brands, brands that care.”

“What is also clear is that it is a consummate time for businesses to reinforce their authenticity, create a belief, engender a sense of belonging to the community. We see it with local butchers and bakeries popping up in some of the UK’s village high streets. There’s no reason that companies shouldn’t do more on a wider scale to tap into these consumer needs.”

They are the brands that this soon-to-be-all-powerful consumer demographic will spend their money with – because they’re trusted.

There’s a lesson in here from which all businesses could learn.

Email:                   nglass@ericsalmon.com

Switchboard :    +44 207 529 1200

Direct Dial:         +44 207 529 1206