The Brand Value of Transparency
July 2022
The Context
Transparency has become a central issue for brands. Consumers today expect to know exactly what is in their products, where they come from and how they are made. Amid growing concerns around how data is collected and used, this trend has forced brands to carefully consider how they interact with their audience and how much information they choose to share.
Key Insights
- Transparency about your product, manufacturing processes and journey to the consumer inspires trust in your company, its values and its offering.
- Transparency takes many forms, including pricing, process, packaging and data use.
- Brands must evaluate transparency through the lens of their purpose and core values.
- Transparency is not just a marketing technique to tell your brand’s story—it is the story.
How Generation Z Is Leading the Charge on Brand Transparency
Generation Z now makes up around 40% of U.S. consumers and wields significant purchasing power (some studies estimate as much as $143 billion annually). Social responsibility and brand transparency drive purchasing behavior for these consumers. Like millennials before them, Gen Z is more likely to buy a product from a company they perceive to be taking positive action in the world rather than a cheaper alternative.
Consequently, Gen Z prefers straightforward, traditional forms of advertising over opaque marketing efforts disguised as other types of content. Brands have to work harder to secure the loyalty of this new generation of consumers, who are highly proficient at gathering and sharing information—and generally less trusting of large institutions. Carefully reasoned brand strategy and data-driven insights into each specific segment of your audience are essential to navigating the evolving conversation around brand transparency.
Patagonia and Social Value Transparency
Outdoor clothing company Patagonia has visibly embraced transparency and social justice as part of its overall brand. By clearly communicating their material sourcing and manufacturing processes to consumers, they build trust in the quality of their products. The information is readily available on the Patagonia website, as are their commitments to environmental causes. And because millennials and Gen Z are more likely to pay more for a product from a company whose values align with their own, Patagonia's higher costs are justified by their transparent social values and high product quality.
*Images are copyright of the respective brand.
Transparency in Pricing
Being transparent about the reasoning behind the price of a product can help build trust between a company and a potential customer. Consumers want to know what their money is going towards, but this doesn't mean they need a full breakdown of your company’s operating costs. If your price is higher because you are operating in a socially conscious or sustainable way, consumers may be willing to accept a higher price tag. Obscuring your pricing—or supplementing it through hidden fees—can quickly strip away trust and build resentment from a potential customer. Carefully consider the wants and needs of your target audience to help determine what pricing information will be most valuable to them.
Southwest Airlines and Pricing Transparency
Southwest Airlines employs strategic price transparency that builds rapport with passengers without inundating them with unnecessary information. Customers are provided with a simple breakdown of their ticket cost that itemizes everything from airfare to booking. They are upfront about what is included in the base ticket price and what costs extra, so customers are not surprised by baggage fees at the airport.
*Images are copyright of the respective brand.
Product Content Transparency and Clean Labeling
Over 90% of consumers check information on the product label or packaging before making a purchase. An easy-to-read, clear and decipherable label shows that your brand cares about what is going into its product and how that affects the consumer. Regulatory requirements necessitate some transparency; however, offering product information voluntarily to consumers can help build trust. As with all kinds of brand transparency, you must carefully consider what information will be helpful to the consumer, as too much information—or information that is hard to understand—can do more harm than good.
Johnson & Johnson and Clean Labeling
A major player in the baby care market, Johnson & Johnson announced in 2018 that it would begin disclosing more information about the makeup of its products. While the industry had long resisted calls for greater disclosure, J&J signaled its commitment to address the concerns of the market. The move provided a critical opportunity for the company to showcase high-quality ingredients that many consumers look for when shopping for baby care products, thus strengthening its bond with parents.
*Images are copyright of the respective brand.
Process Transparency
From material sourcing and manufacturing to distribution and delivery, consumers want to know that the products they buy are created in a socially conscious way with minimal impact on the environment. To meet this demand, organizations may consider using scannable Q.R. codes on packaging to direct consumers to view more details about how the product was made or where the materials were sourced.
Five Guys and Sourcing Transparency
Hanging on the wall of every Five Guys restaurant is a chalkboard that displays the name and location of the potato farm that supplied the day’s fresh-cooked fries. Being upfront (and proud) of this process enables Five Guys customers to learn more about the product they are consuming and speaks to the company’s commitment to supporting domestic agriculture and production. By noting that the farm changes daily, Five Guys also demonstrates to customers that they are receiving a farm-fresh product.
*Images are copyright of the respective brand.
Data Transparency
Amid growing concerns about data security on the web, companies need to be transparent about what data they collect from their customers, why they collect it and how they use it. Being transparent about how data sharing helps the customer and clarifying how data is collected and used can help build trust with customers and encourage them to share information about themselves.
Combating misinformation is another critical aspect of data transparency. Customers will sometimes access inaccurate information online and make decisions based on that information. Brands need to be aware of what is being said about their products to become a trusted source of information for consumers.
Conclusion
Transparency is not just a marketing technique used to tell a brand’s story—it is the story itself. It is an opportunity to communicate your values to your audience and demonstrate the concrete actions you’ve taken to support them. Your brand must approach any transparency initiative through the lens of its purpose and core values to ensure you engage your audience in an authentic, relevant and meaningful way. Executed effectively, transparency highlights those values in action, cementing a relationship with consumers that is built on trust.
Selected Sources
- https://morningconsult.com/form/gen-z-worldview-tracker/
- https://www.forbes.com/sites/jefffromm/2021/01/07/on-youtube-tiktok-and-ben--jerrys-five-undeniable-truths-about-marketing-to-gen-z/?sh=5ab7effcb972
- https://www.forbes.com/sites/jefffromm/2018/01/10/what-you-need-to-know-about-the-financial-impact-of-gen-z-influence/?sh=373067c956fc
- https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2020/03/20/a-simple-secret-to-satisfying-gen-z-listen/?sh=12bb07ea4d9a
- https://www.thinkwithgoogle.com/marketing-strategies/video/creating-youtube-ads-that-break-through-in-a-skippable-world/
- https://www.tastetomorrow.com/inspiration/5-clean-label-brands-to-keep-an-eye-on/486/
- https://www.bevsource.com/news/clean-label-movement-how-whole-foods-setting-tone
- https://business.edf.org/insights/consumer-concern-about-chemicals-in-food-continues-to-grow/
To learn more about this topic or to discuss an issue impacting your business, contact Bailey’s Vice President of Client Services, Jamie Gailewicz, at 610-818-3103 or email us at [email protected].
