Consumers seek transparency online and in-store: FMI and Label Insight study

By Mary Ellen Shoup

- Last updated on GMT

©GettyImages / Ridofranz
©GettyImages / Ridofranz

Related tags Label Insight Transparency FMI Ingredients

A majority (81%) of consumers say transparency is ‘important’ or ‘extremely important’ to them when shopping online and in-store, according to a new report by The Food Marketing Institute (FMI) and Chicago-based Label Insight.

The report​ is a follow-up to research conducted in 2018, and the updated findings are based on a quantitative survey of a random sample of 1,000 US shoppers (from March 5 to March 18, 2020) who had shopped online for groceries in the previous month in addition to shopping in-store.

While the bulk of the research occurred before COVID-19 took a sweeping effect on much of the US population, its findings are still timely and relevant, said FMI and Label Insight, who noted:

“The research was conducted in the period just before the COVID-19 pandemic, which means that responses were generally free of the emergency mentality that arose during the crisis. That timing is a positive factor for the purposes of this report, because it means the insights will be more widely applicable.”

"Pre-pandemic, online shoppers expressed a desire for expanded features that would enable search capabilities, exploration and better ways to compare products. The analysis helps food retailers prioritize how consumers want to engage with them and their brands in an authentic way," ​commented FMI vice president, industry relations, Doug Baker.

How do consumers define ‘transparency’?

Shoppers said the most important areas for transparency when it comes to shopping in-store or online are around ingredients, certifications, and in-depth information about the nutrition of products. Product claim and allergen information are also important to many omnichannel shoppers, according to the research.

Shoppers place a lot of responsibility for transparency on manufacturers, brands, and government institutions, but they often don’t trust the information provided, according to the report.

Approximately 61% of omnichannel shoppers believe manufacturers, brands, or government institutions are completely responsible for providing detailed product information. However, less than one-half of shoppers completely trust product information from manufacturers and brands (41%) or from government institutions (46%), the report found.

Shoppers say a brand or manufacturer meets their definition of transparent if they provide a complete list of ingredients (62%), the description of ingredients is in ‘plain English’ (53%), provide certifications, such as USDA organic (48%), and provide in-depth nutritional information (47%).

Transparency responsibility of online retailers

Shoppers have higher product transparency expectations for online grocers compared to brick-and-mortar stores, the report noted.

In fact, according to the report, there’s a greater desire for information about products when shopping online versus in-store – 42% of shoppers believe online grocery retailers should be responsible for providing detailed product information compared to brick-and-mortar grocers (35%).

When deciding which products to buy online, more than one-half of shoppers say where (54%) or how (53%) a product is manufactured or grown is important or extremely important.

In addition, 47% of shoppers will choose to research ingredients online when seeking more information or clarification, and 89% of consumers would be more likely to seek details on a product if it had more online information.

Higher incomes shoppers ($100,000+ household income) and shoppers with kids are also more likely to research ingredients online.

On the other hand, when faced with confusion over ingredients 27% of shoppers surveyed said they would not buy the product and switch to another product instead, and 23% of shoppers said that they would accept that they do not understand the ingredients and just buy the product.

According to Label Insight, manufacturers and retailers who are proactive in providing detailed and easy-to-understand product information will continue win over consumers in the long run.

"It's one thing to know consumers want transparency, it's another thing to act on it. We're seeing more and more that providing detailed product information is key to building trust and loyalty with consumers,"​ said Tim Whiting, VP of Marketing at Label Insight.

"Moving forward, brands will need to continue to listen better to their customers, continuously update their online and in-store content to keep pace with changing consumer preferences and be an open book when it comes to their products so that they can maintain and grow market share."

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