Transparent labeling could boost sales, consumer loyalty, Label Insight survey finds

By Elizabeth Crawford

- Last updated on GMT

Source: iStock
Source: iStock

Related tags Label Consumer protection

Providing transparent, accurate information about products that go beyond what is legally required can boost sales, market share and consumer loyalty, suggests new research by Label Insight.

The only catch is, to provide consumers sufficient information to count companies might need to go beyond their package labels, the data refinery firm explained during a recent presentation.

“Consumers really want to have improved relationships with their branded products. They want those relationships to be defined by honest sharing of information and when they find that honest sharing of information from brands, they are willing to buy those brands over and over again,”​ said Patrick Moorhead, Label Insight’s chief marketing officer.

For support, he pointed to findings from the company’s recently released Transparency ROI study, which analyzed 2,021 consumers’ preferences for transparency and how it affects their trust and loyalty toward brands.

“The big finding”​ from the survey is that the value of transparency centers on loyalty, he said.

“Ninety-four percent of consumers that we surveyed indicated that they are likely to be loyal to brands that offer complete transparency. And half of those people said they were likely to remain loyal to a brand for life if it offered complete transparency,”​ he said. “So, the stakes are pretty high.”

Indeed, the survey also found 40% of consumers said they would switch from buying their current brand to one that offered more transparency, and once they do so, 81% said they were highly likely to consider other products from that brand.

In addition, 73% of the consumers said they would even pay more for products that offer complete transparency, the survey found.

“That is, more than anything, the real indicator of just how valuable consumers believe this information about the product is,”​ Moorhead said.

How consumers define transparency

But what information exactly are consumers looking for when they say they want more transparency?

“Consumers consider a wide range of factors when it comes to defining transparency, but the number one factor that defines transparency for them is a complete list of ingredients,”​ which 77% of respondents told Label Insight they use to determine whether a manufacturer is transparent about its products, Moorhead said.

Close behind that at 54% is in-depth nutritional information, followed by certifications and claims at 51%, a comprehensive list of known allergens at 47%, information about how products are produced and sourced at 40% and 35% and how they are handled at 31%, according to the survey.

Easy access to many of these factors also contributes to whether consumers trust a brand, the survey revealed.

Notably, 56% of consumers said they’d trust products more if they provide information on how they are produced, handled and secured, which Moorhead points out “is ironically the information that is very difficult for brands to include on their packaging, mainly because there is so much of that type of information about any one given product that it is impossible to squeeze in the physical constraints of the label.”

But, simply skipping this information because of limited space on the label isn’t a viable option given that 48% of consumers say that if they can’t find this information they are skeptical of the product, according to the survey.

SmartLabel could provide necessary space

Moorhead suggests as a solution the much-debated Smart Label digital product initiative, in which Label Insight helps clients participate.

The program is still in the early adopter phase, but some in the industry are skeptical that it won't be the panacea to labeling problems that some hold it up to be. They question whether consumers actually would use Smart Label or if they would prefer the data at the shelf.

Moorhead counters by pointing to additional survey results that found 50% of consumers would prefer to access a complete list of product attributes beyond the package on the brand’s website. And only 12% said they would not access the data if it were available.

In addition, 79% of consumers said they would be somewhat to very likely to use Smart Label, 55% would be more willing to buy brands that participate in the initiative and 44% would trust participating Smart Label brands more, the survey found.

Label Insight seeks to make the transition to Smart Label as easy as possible for brands  by managing brands’ Smart Label landing pages and providing guidance on how to maximize those pages with QR codes, SMS Text Messaging and other tools.

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