Why Transparency Matters More Than Ever

The acceleration of online grocery shopping during the pandemic presents a unique opportunity for food retailers to increase transparency efforts that build shopper trust.

According to a new report from the Food Industry Association (FMI) and Label Insight called “Transparency Trends: Omnichannel Grocery Shopping from the Consumer Perspective,” 81% of shoppers say transparency is important or extremely important to them now more than ever before.

“It’s one thing to know consumers want transparency, it’s another thing to act on it. We’re seeing more and more that providing detailed product information is key to building trust and loyalty with consumers,” said Tim Whiting, VP of marketing at Label Insight. “Moving forward, brands will need to continue to listen better to their customers, continuously update their online and in-store content to keep pace with changing consumer preferences and be an open book when it comes to their products so that they can maintain and grow market share.”

Transparency is increasingly important in omnichannel shopper buying decisions, the report shows, but it plays out somewhat differently depending on the shopping platform used. 

Shoppers told FMI and Label Insight that the most important areas for transparency include ingredients, certifications and in-depth information about nutrition of products. Product claims and allergen information are also important to many omnichannel shoppers. Shoppers say a brand or manufacturer is transparent if they provide a complete list of ingredients (62%), the description of ingredients is in plain English (53%), provide certifications, such as USDA organic (48%), and provide in-depth nutritional information (47%).

Shoppers are also placing a lot of responsibility for transparency on manufacturers, brands and government institutions, but they often don’t trust the information provided, the data show. Responsibility for transparency is met with distrust. Sixty-one percent of omnichannel shoppers believe manufacturers, brands or government institutions are completely responsible for providing detailed product information; however, less than one-half of shoppers completely trust product information from manufacturers and brands (41%) or from government institutions (46%).

Shoppers have higher transparency expectations of online grocers compared to bricks-and-mortar stores, according to the report. In fact, there’s a greater desire for information about products when shopping online versus in-store. Some shoppers, for example, are seeking information about allergens, and use online filters for this purpose. Shopping based on a specific allergy is an example of an activity many shoppers find easier or just as easy to do online versus in store. 

“Pre-pandemic, online shoppers expressed a desire for expanded features that would enable search capabilities, exploration and better ways to compare products. The analysis helps food retailers prioritize how consumers want to engage with them and their brands in an authentic way,” FMI Vice President, Industry Relations, Doug Baker said.

Online experiences could be improved through better product selection, more and better product information, and more accurate search functionality, the report shows. Online expectations for transparency are higher than for brick-and-mortar. Forty-two percent of shoppers believe online grocery retailers should be responsible for providing detailed product information, compared to brick-and-mortar grocers (35%).

Shoppers are highly focused on buying products for diets, and this leads to a lot of online searches for  more  information, especially as  part of e-commerce activities. Despite this, shoppers find it harder to obtain this type of information during online shopping as compared to in-store, according to the report. More shoppers are sticking to a diet or health related eating program in 2020 (64%) than in 2018 (49%); and their shopping behaviors are impacted even more by food allergies, intolerances or sensitivities than two years ago with 44% indicating this in 2018, and 55% in 2020.

Some information gathering is easier during online shopping than in-store. This is especially true for new product discovery and learning stories about products. Consumers go online to get more information. When met with a need to get more detailed product information or clarify questions, shoppers turn to the internet. Forty-seven percent of shoppers will choose to research ingredients online in the face of confusion and 89% of would be more likely to seek details on a product if it had more online information.

Shoppers like the expanded features retailers are adding to online shopping platforms — especially for search, exploring packages and digital coupons and promotions. However, the online experiences could be further improved through better product selection, more and better product information, and more accurate search functionality, FMI says.

As for how retailers can leverage all of these trends into higher sales, the report offers ideas for next steps on transparency efforts. Here are six key recommendations:

Accelerate Transparency: Manufacturers and brands have opportunities to further enhance transparency in ways that boost trust for omnichannel shoppers. This is especially important given that shoppers consider these stakeholders largely responsible for transparency but don’t always trust information they provide.

Prioritize Online: It’s an especially good time to advance transparency in online shopping, especially in the wake of the pandemic, as e-commerce grows in usage. This is particularly important because transparency expectations are higher for e-commerce than in-store.

Emphasize User Experience: Focus on online user experience as an opportunity to cement consumer loyalty and gain new shoppers spanning different channels.

Boost Health and Wellness-Related Details: This report points to shoppers’ interest in finding information about allergies and intolerances. At a time when shoppers are heavily focused on diets and health, enhancing transparency that supports these needs represents a huge opportunity to cater to consumers.

Advance Product Information: Other transparency opportunities to improve the online shopping experience include better product selection, more and better product information, and more accurate search functionality.

Enable Item Comparisons: Product comparisons should be a particular focus  of online grocery in boosting transparency. Retailers need to make it easier to accomplish this.

The FMI report is based on data collected between March 5-18, 2020, from 1,000 U.S, omnichannel grocery shoppers who shopped online for groceries in the previous month — in addition to shopping in-store. The report is a follow up to “The Transparency Imperative: Product Labeling from the Consumer Perspective” study conducted in 2018 which examined the growing importance of transparency. This year’s research builds on the 2018 study, diving deeper into shoppers’ behaviors and expectations for transparency with in-store and online shopping.

To view the full report, click here.