- Consumer trust has deteriorated to levels last seen in 2016, according to data from Qualtrics XM Institute released Wednesday. The survey of 10,000 U.S. consumers across several industries found that only 50% of consumers had confidence in the brands they do business with in 2023.
- Trust is lowest among Gen Z consumers, among whom only 28% trust the brands they do business with. It's highest among baby boomers, 57% of which trust the brands they do business with.
- “Consumers are still reeling from the past few years of rapid change and uncertainty,” Bruce Temkin, head of Qualtrics XM Institute, said in a prepared statement. “By communicating clearly and providing exceptional service, companies can earn trust with people who will be more likely to become a repeat consumer and actively promote the business to their friends and family.”
Uncertainty brought on by the pandemic as well as the lack of trust among Gen Z consumers is behind the decline in trust, Qualtrics XM Institute found.
After dipping to a low of 45% in 2020, consumer trust has yet to recover to pre-pandemic levels and has sat at 50% for the past two years.
Gen Z, with its growing purchasing power, has different expectations for the companies they do business with. Qualtrics XM Institute notes that Gen Z cares more about brands’ values resonating with them and are more likely to switch brands if they don’t believe the company has lived up to its customer experience promises.
The gap between baby boomers and Gen Z trust is greatest when it comes to investment firms and utilities, with more than a 40 percentage point gap in trust in both industries.
Brands also need to consider the effect of AI on trust, Temkin said.
A forthcoming study from Deloitte shows that consumer trust in a brand drops 144% when a customer believes a company is using AI, according to Amelia Dunlop, chief experience officer at Deloitte Digital.
Temkin offered some advice to companies focusing on improving consumers' trust in them: “Act consistently, avoid over-promising, be transparent about what your consumers care about most, and accept responsibility when something goes wrong.”