Branding and Customer Trust

I was recently asked to write a paper for my doctoral program on a brand that would benefit from an increase in brand trust. After thinking about the topic and Tweeting my followers asking if there was a brand they absolutely did not trust, I ended up thinking of my own personal beliefs and attitudes about brands.

Wal-Mart is notorious for low prices and an atmosphere that exudes ‘discount store’. Customers expect to find products priced lower than other retailers and accept the lack of cleanliness, poor customer service, and long lines. Wal-Mart’s name implies competitive pricing. However, Wal-Mart is also becoming known for its questionable practices in relation to labor, importing, and its impact on communities. Consumers have many brands to consider in today’s market and price is a very strong determinant of where a shopper chooses to spend their money. Wal-Mart has branded itself as tough competitor in the discount retailer sector.

How to compete with Wal-Mart
To compete with retailers like Wal-Mart, other brands must create and nurture relationships with customers in order to maintain and build loyalty. One of the best ways to create a relationship, and more-over a relationship of trust, is by offering consumers marketing that provides value beyond selling a product. For example
*sharing information that is relevant to the consumer
*providing transparency
*educating and helping consumers solve a problem
The above can all be ways of adding value to a brand while increasing the trust a consumer has for the brand. Consumers require their basic needs to be satisfied by a product but also have higher emotional needs that can be met through effective branding. Wal-Mart may have an advantage over some small businesses with their lower prices, but by creating and nurturing trusting relationships, these smaller businesses have a fighting chance.

One big SNAFU in my Opinion
Wal-Mart has had several issues make the news in recent years including employees working off the clock, gender discrimination of employees, using undocumented workers, being the largest importer of foreign goods in the United States, over seas labor issues, difficult vendor relations, and the negative impact the stores have had on communities by alienating small businesses. Each of these factors plays a role in how the brand is perceived by the public. Wal-Mart maintains the image if a discount store, but the recent controversies surrounding questionable business practices attack the very core of the business leading to an overall untrustworthy image.

Trust Issue #1: Wage issues and gender discrimination
The retail giant has been found to have employees work off the clock, males earning more than females with the same qualifications, and wages being at poverty levels. Many of these issues could be related to the management staff in a particular Wal-Mart and subsequent district supervisors. With an internal branding initiative, focus should be on how to improve employee morale, retention, and upward mobility. Happy employees can do so much for a brand, because they are the brand. Wal-Mart is judged based on their current employees who represent the face of the brand. Changing how society perceives the Wal-Mart brand and its brand equity needs to start with the employees.

Trust Issue #2:Wal-Mart is the largest importer of foreign goods
In the quest for providing the lowest prices, Wal-Mart purchases many of its products over seas. Many manufacturing jobs in the United States have moved overseas due to cheaper labor and other business related costs in order to meet the demands of Wal-Mart. Short of buying only from American manufacturers, Wal-Mart has little to remedy this situation.

Trust Issue #3: Local communities are being negatively impacted by Wal-Mart
Several small communities have blamed Wal-Mart for their economic woes, claiming the retailer forces out competition, creates traffic congestion, and depletes downtown vibrancy. Similarly, many locations have a majority of employees making just over minimum wage, which forces them to rely on public assistance programs. This affects all taxpayers. On the other hand, Wal-Mart does bring money savings to low income shoppers and has been praised for providing four-dollar prescriptions. With all of the controversies surrounding Wal-Mart and their close ties to what appears to be standard operating procedures, Wal-Mart should consider the possibility of re-branding internally. Many of the issues contributing to the distrust of Wal-Mart, could be improved by illustrating the importance of brand identity, and then empowering Wal-Mart employees (from top to bottom) to embrace it.

My Angle
The recent ‘rebranding’ of Wal-Mart (in my opinion) did little to actually re-brand the retailer. Altering the name from Wal-Mart to Walmart, stocking more healthy options, changing the logo, and changing the slogan to “Save money. Live better” were nothing more than a graphic representation of what they hoped they could convey: social responsibility. Rather than relying on a new logo and slogan, Wal-Mart should have taken the steps to rebrand internally. Efforts should have been focused on actively being socially responsible by addressing employee pay, gender discrimination, lack of American made products, and community issues.

Relationship and Trust Building
Building trust tends to be more difficult than a sale but it also much easier to lose. Relationship and trust building should be a part of a marketing campaign for any brand hoping to stay in business in the long term. The issues Wal-Mart is having with consumer mistrust have come directly from their own business practices derived from a low price strategy. Taken at face value, offering products at a price consumer’s want could potentially maintain a somewhat long-term relationship. Wal-Mart can continue to be a leader in the industry without addressing all of its recent debacles because they are such a dominant corporation. However, the likelihood of communities accepting Wal-Mart with open arms is slim unless the overall image of Wal-Mart changes to include a truly dedicated socially responsible entity. Wal-Mart’s operational issues have caused consumers to no longer trust the brand as they once did which stops a relationship from reaching its true potential.

When was the last time you shopped Wal-Mart? Me: Summer 2011.

** Update, I re-assessed the WalMart situation 6/2014 – Yup, still not a fan. Here’s to another 3 years without WalMart! Prices on the store brand items ( ex: lunch meat, drink enhancers) were higher than Target and home goods lacked the quality that Target has. It was a terrible trip and I really empathize with folks who have no other alternative place to spend their hard earned money.

photo credit: Walmart Stores via photo pin cc
photo credit: nathangibbs via photo pin cc
photo credit: Brave New Films via photo pin cc