Six Imperatives To Build Consumer Trust: AI Is One Of Them Businesses that prioritize customer behavior analysis are better at retaining their consumers and building trust

Knowing your customers' behavior is crucial for forming strategic marketing plans to fulfill consumers' needs. It also helps in tapping into new markets and customer bases. This becomes crucial when the market is dealing with many competitors in every industry and sector. In the last decade, the market has witnessed significant changes in consumer behavior due to climate change, information technology, increasing global market accessibility, technological advancements including Artificial Intelligence (AI) and Generative Artificial Intelligence (GenAI), increasing consumer spending, and the rise of more middle-class households in India.

Additionally, in recent years, several Indian startups and well-established companies have started tapping into Tier 2 and Tier 3 markets. Hence, all these changes have led to modern solution approaches and data-driven marketing strategies. Businesses that prioritize customer behavior analysis are better at retaining their consumers and building trust. Recently, PwC released its survey on the 'Voice of the Consumer (2024), Indian perspective,' in which it highlighted six imperatives that can help building consumer trust.

Safeguarding Personal Data

Consumers are now aware of data privacy and how and where their data is being used. Industries that aim to build solid trust among its consumers must provide robust data protection mechanisms while leveraging data to enhance personalized services and customer experiences. Although a big majority, 66 per cent consumers are willing to share their data to get more personalized services, and 74 per cent are happy for their data to be used to deliver useful features and services. Meanwhile, 83 per cent of consumers prioritize knowing their devices are keeping their information private. The top factors that influence trust among consumers are—protecting customer data (82 per cent), offering high-quality products and services (80 per cent), and clear communication (77 per cent). Additionally, data showed that consumers trust technology and healthcare companies with trust scores of 7.55 and 7.42, respectively, while social media companies are the least trusted.

Promoting Health and Well-being

The emphasis on wellness and sustainability is growing at an unprecedented pace, which is a positive development. Keeping the current requirements of consumers in mind, companies should create product portfolios that cater to consumers' health and nutrition needs, as well as sustainable food production. A survey indicates that 69 per cent of consumers expect to increase their consumption of fresh fruits and vegetables in the next six months, and 75 per cent of consumers proactively seek out information on the sustainability of food products. Additionally, 38 per cent of consumers are most likely to rely on health and fitness experts for advice on health and well-being. According to the data, 78 per cent of millennials prefer an independent sustainability score on food labeling, compared to 66 per cent of GenZ.

Balancing Social Media Use

Modern marketing cannot be completed without mentioning social media. For brand engagement and sales, social media marketing plays a pivotal role. However, it also raises credibility concerns among consumers. As per data, 81 per cent of consumers use social media to seek reviews and validate a company before purchasing a product. This indicates that consumers are heavily influenced by advertisements on social media channels. Additionally, 77 per cent of consumers discover new brands through social media, but 76 per cent are concerned about their privacy and data sharing on these platforms. Despite these concerns, 58 per cent of consumers have purchased products directly through social media, even though it is ranked as the least trusted industry.

Enhancing the Purchase Journey

To meet consumer expectations of value and satisfaction, companies should focus on providing a seamless shopping experience across all touchpoints. According to the data, 56 per cent of consumers in India frequently purchase from physical stores, compared to 34 per cent globally. Additionally, 62 per cent of consumers engage with sales people for product discovery, while 53 per cent turn to online browsing. Affordability remains a top priority for 37 per cent of consumers, and it also leads to brand switching. Furthermore, 41 per cent of consumers indicate that the availability of mobile or contactless payment solutions would encourage them to shop in-store, especially young millennials, who rank mobile payment/contactless payment solutions slightly higher at 45 per cent compared to 41 per cent for the rest of Indian consumers. Companies should integrate technologies such as Augmented Reality and Virtual Reality for product visualization, contactless payment solutions, personalized offers through apps, and smart kiosks for information.

Connecting with Eco-conscious Consumers

Now that consumers are aware of the current condition of the environment, they are looking for brands that demonstrate a commitment to positive environmental impacts. Survey data shows that 93 per cent of consumers have noticed climate-related disruptions in their day-to-day lives, and 60 per cent of consumers are changing their purchasing habits by buying more sustainable products. Additionally, consumers are willing to pay 13.1 per cent above the average price for sustainably produced or sourced goods. In India, 46 per cent of consumers perceive climate change as the greatest threat over the next 12 months. Furthermore, 43 per cent of consumers said they are more likely to buy from brands that actively conserve water in their operations, 41 per cent prefer brands that use environmentally friendly packaging, and 36 per cent are motivated to purchase more from brands that reduce waste and prioritize recycling in their processes.

Companies should start integrating modern technology to build more sustainable and efficient supply chains, minimizing environmental impact while maintaining operational efficiency.

Incorporating AI Responsibly

Several traditional Indian companies have started integrating Artificial Intelligence (AI) into their operations. However, achieving full capacity will take time. AI offers opportunities for operational efficiency and enhanced customer interactions. Nonetheless, it is crucial to maintain a human touch, particularly in complex and personal services. Data shows that 57 per cent of consumers would trust AI to support them with low-risk activities, such as getting product information ahead of a purchase or providing product recommendations. Still, they prefer human interaction for more complex services. Additionally, consumers are concerned about AI's potential risks, including cyber threats and data privacy breaches, with 86 per cent of consumers expressing concerns about the future developments of generative AI (GenAI).

Survey data suggest that while adopting AI for internal improvements and consumer-facing tasks, companies should prioritize human oversight to address complex or unresolved issues and develop strategies for responsible Artificial Intelligence.