Selling Transparency

O urs is a transparent world in which everyone seems to know everything about everybody. That’s partially because people tend to share more today than ever before — using social media vehicles like Facebook and Twitter to chronicle every moment of their lives.

This transparency is rooted in technology. The Internet, smartphones and always-on connections have given consumers access to more information than anyone could have imagined even five years ago. This same transparency is rewriting the retail textbook, whether the chapter is on pricing, marketing or product development.

Pricing transparency is probably the most obvious game changer. Consumers research best deals before leaving home — and often again once they’re standing in the aisle. Variations in price that once existed in different regions or channels are gone; still, pricing transparency is among the most difficult challenges retailers will face as we head into the holiday season beset by less-than-encouraging economic indicators. While businesses struggle to avoid competing on price, there’s little question that the price sensitivity bar is about to be raised.

Marketers are on notice, too. You may recall the move by the U.K.’s Advertising Standards Authority (ASA) a few months back to ban a L’Oreal magazine ad featuring actress Julia Roberts. The watchdog agency believed she looked good in the ads from airbrushing, not the product being advertised; in other words, the ASA alleged that it amounted to false advertising. The move sent a strong message to marketers: Integrity matters, and it needs to be reflected in their practices. And experience has taught us more generally that consumers won’t fall for campaigns that over-promise and under-deliver.

Product transparency is another enormous issue, particularly as it relates to food. If foods contain GMOs (genetically modified organisms), there are a whole lot of people who want to know about it. The same goes for high-fructose corn syrup, calorie counts and organic claims.

With endless product commentaries in the form of online reviews and social media postings, brands are under more stress than ever to deliver on their promise — or be called out by shoppers who refuse to accept mediocrity. Accurate labeling is a must when consumers are in control — and make no mistake, consumers are in control. It comes down to honesty, and compromising shoppers’ trust is risky business.

For retail CEOs, the transparency challenge is daunting but the broad lesson is simple. Consumers know as much as, if not more than, retailers about products, pricing and the accuracy of sales pitches, “green” claims and on and on. Transparency has changed the relationship between brands and consumers, and there’s no changing it back. It’s time to embrace the dialogue.