MILAN — At a time of political instability and societal polarization, trust issues are widespread — but brands are emerging as winners.
According to the “Brand Connection — the Age of Meaningful Brands” report by consultancy Deloitte published Tuesday and presented here, consumers are looking at their favorite — and increasingly also up-and-coming — brands as promoters of aspirational value systems.
Brands beat out governments and institutions, reclaiming a higher score in people’s trust ladder, just below relatives and social circles, corner shops and employers.
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This is not to be taken for granted.
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The survey was conducted on 7,000 respondents across seven key consumer countries, including Italy, France, the U.K., China, Japan, the U.S. and the United Arab Emirates.
Amid an iffy outlook for the fashion and luxury sectors, trustworthiness factors in across the brand spectrum, from mega to micro, especially as the research shows that almost 50 percent of respondents do not feel linked to any brand specifically, despite following many.
According to the Deloitte study, 51 percent of respondents trust small and indie brands, which are gaining steam and tailing bigger labels, trusted by 58.2 percent of respondents. Both figures have increased compared to five years ago.
As a result, consumers expect brands, big and small, to nurture direct relationships with them, promote authentic storytelling and stand by a crystal-clear identity.
In a nutshell, brands are required to foster proximity, authenticity and accountability, said Andrea Laurenza, consumer industry leader at Deloitte Central Mediterranean.
“Consumers expect brands to have a tailored relationship with them, remembering their tastes, expectations, purchasing histories — and this is poised to increase further in the upcoming years,” Laurenza offered.
Personalization is considered a determining factor for the fashion and luxury sector, with 57.9 percent of respondents influenced by the availability of tailored products, services and communication in building a long-term connection with brands.
“Consistency is key because we’re in an era where a fashion brand’s identity is defined more by consumers than by yourself,” said Lorenzo Bertelli, head of corporate social responsibility at Prada Group, in interviews with business leaders that followed the research’s keynote presentation. “That’s why it’s crucial to have a deep understanding of your own identity and history in order to constantly navigate that fine line.”
The interconnected and democratized access to information has led to generations of educated and demanding consumers. Brand equity and relevance need to be fed over time, as they are considered notions of quality and reliability by clients, informing their purchasing choices.
“Trustworthiness is the most important and at the same time fragile value across geographies,” Laurenza said. “In a nutshell, [consumers] expect brands to walk the talk. Trust is something you build over time but can lose overnight, especially at a time of increased transparency and disintermediation, when everything is visible and accessible.”
As brands are increasingly branching out in adjacent sectors — such as design, hospitality, food and beverage, as well as culture — they have the potential to pop up in one’s everyday life multiple times.
“The great thing about culture is that you can’t fake passion or genuine interest. Nowadays, many companies use culture [as a marketing lever],” Bertelli offered.
To be sure, 63.3 percent of Chinese consumers look at brands as flags of collective identity, while they are tools of entertainment for almost 70 percent of U.S.-based respondents and sources of emotional connection for 72.9 percent of UAE citizens.
A graduate in philosophy, Bertelli said his studies have come in handy when he joined the family company in a marketing leadership position, as the ability to understand different perspectives has helped him “understand the impact the brand has on different consumers. Each of them has their own truth, and you have to identify the one that is most relevant for you.”
In Europe, cutting-edge shopping services are crucial to gain customers’ trust, which relies more on concrete brand actions rather than storytelling, as overall pragmatism in purchasing habits prevail.
To some extent, this is true across geographies, the study shows. For example, products’ inherent quality is paramount globally, with 33.8 percent of respondents citing a quest for better quality as the reason for resorting to different brands than their traditionally loved ones over the past year. The figure topped the list of reasons for brand switching, which included other variables such as economic instability, enhanced communication, loss of trust, value misalignment and more.
Global consumers are guided by a new “value for money” paradigm, which takes into account quality, price, functionality and transparency, the study says. Digital capabilities are also part of the equation with the Far East more inclined toward full-fledged innovation, including Gen AI, and the Western world looking for digital-mediated simplification.
“Consumers can be very loyal, but you can’t take them for granted or treat them as cash cows,” said Marco De Benedetti, chairman of Italy at investment firm Carlyle. “That’s why you need to strengthen your brand’s credibility. Being just a great brand is no longer enough, especially if products come with a certain price tag.”
The Deloitte research showed that the overabundance of brand and product options has impacted consumer loyalty as it allows discerning clientele to easily switch among brands.
For example, recent scandals in the Italian supply chain of high-end brands — including Tod’s, Giorgio Armani, Valentino, Loro Piana and Dior — have impacted consumer confidence, especially among Gen Zers, the study says.
Hinting at the topic in relation to Dior and Loro Piana probes — both LVMH Moët Hennessy Louis Vuitton-owned brands that have been placed into judicial administration for failing to properly audit their subsuppliers — Toni Belloni, president of LVMH Italy and strategic adviser to the LVMH Group chief executive officer, said the luxury conglomerate has “empowered our people to do better, tripled our oversight measures, and we believe there is always room for improvement, especially with the support of institutions.”
The executive sounded moderately optimistic about the fashion and luxury sectors’ outlook.
“In my almost 25 years of experience [at LVMH], I’ve seen luxury grow significantly, albeit at a nonlinear pace, reaching a compounded growth rate of 6 percent, which exceeds the increase of global GDP,” Belloni said. “Customers have contributed to the post-COVID euphoric wave, which brands have ridden, but perhaps there has been a lack of innovation in the offering.”
That explains the number of creative changes at storied maisons over the past year, he offered.
“It’s about infusing new creative energy…to gain back relevancy and value,” Belloni said.