How These 3 Businesses Are Changing Their Industries Through the Transparency That Leads to Trust

Whole Foods and Patagonia are big brands that have done it. How about yours?

5 min read

Opinions expressed by Entrepreneur contributors are their own.

Trust is the cornerstone of a company’s brand, but it must be earned. Today’s consumers are smarter, more demanding and able to access more information about a product or service. In fact, Search Engine Land found that 88 percent of consumers surveyed said they trusted online reviews as much as personal recommendations.

Related: Let’s Be Real: Why Transparency in Business Should Be the Norm

That’s why, to meet buyer expectations, more and more businesses are working to establish a foundation of trust by increasing transparency.

Transparency as a means to trust

Transparency requires entrepreneurs to be open about key aspects of their business, including their operations, supply chains and performance. According to a 2016 study by Label Insight, 94 percent of respondents agreed that it was important to them that the brands and manufacturers they buy from be transparent about what is in their food and how it is made.

While this study was specific to the food industry, the demand for product transparency that it documented might be applied to all industries. The study also found that transparent companies were rewarded, with 37 percent of the consumers surveys saying that they would switch brands to those offering this degree of openness.

Related: How Transparency Became a Top Priority for Businesses, and Why You Should Care

Transparency equals trust, the survey implied; and brands that earn this trust attracted customer loyalty, in return.

Whole Foods’ Lesson

Whole Foods Market is known for its healthy offerings of fresh, prepared and processed food. However, the brand took a hit when a class action lawsuit accused the company of mislabeling products as not being genetically engineered (“non-GMO”), when in fact they were.

Whole Foods responded with the commitment that all products in its U.S. and Canadian stores would be labeled by this year, 2018, as to whether they contain genetically modified organisms (GMOs). The company thus became the first national grocery chain to set a deadline for full GMO transparency.

The positive consumer response to Whole Foods Market’s GMO transparency has pushed other stores to some level of commitment to non-GMO products, too. Kroger and Safeway announced that they would no longer sell genetically modified salmon. Dannon Corporation recently made a non-GMO ingredient option and clear-labels commitment to its consumers.

What started as a pledge by Whole Foods to better label its products has expanded into a National Mandatory Bioengineered (BE) Food Disclosure Standard. The U.S. Department of Agriculture is currently soliciting comments toward the final rules.  

Patagonia’s supply chain

A company’s supply chain ensures that it has the needed materials to produce a product, but today’s consumers are questioning the environmental and social costs of those materials.

As a result, there is a growing movement toward supply chain transparency, and Patagonia is leading the way. The company brings new partners into its supply chain using the “4-Fold” approach, which evaluates sourcing, quality, social and environmental factors. The company’s commitment to transparency is found in its Footprint Chronicles, published factory lists and Cleanest Line blog.

Patagonia has transformed its supply chain into one of its biggest brand elements through transparency and trust.

Meanwhile, other industries are making moves along the same lines:

  • The Estée Lauder Company recently committed to a transparent supply chain with regard to child labor.
  • A recent study by Human Rights Watch documented the need to incorporate human rights into clothing and footwear supply chains.
  • The food industry is facing both internal and external pressures to develop transparent supply chains due to food product recalls

ClearAid’s charitable giving

There is a real need for charitable giving across every topic from childhood cancer to environmental protections, but the trust in many nonprofit organizations may be waning. When charities like the Red Cross, the Wounded Warrior Project and the Cancer Fund of America are cited for lost or misappropriated funds, the honor of all charities is questioned. A recent MissionBox survey found that nearly 60 percent of respondents would give less to charities than they had in the past as a direct result of nonprofit and charity scandals.

ClearAid seeks to restore public trust and increase charitable giving to nonprofit organizations through transparency in how monies are spent and crowdfunding is controlled. It uses a blockchain system that records and stores donations made and combines this technology with smart contracts that can result in refunds to donors if specific charity goals are not met.

Related: 7 Trust-Building Tips To Use In Your Business

Together, these systems allow potential donors to trust that their gifts are being spent exactly as they’d intended. ClearAid’s ultimate goal is to create crowd-based governance of charities that would approve or decline projects, manage transactions and oversee charitable operations.

In the nonprofit world as well as the commercial one, transparency equals trust, which ensures that charities that are honorable can continue to make a difference in our world.

Bottom line

Businesses from grocery store chains to manufacturers rely on transparency to increase the trust quotient of their brand. As consumers appreciate the value this adds to their purchasing and giving decisions, they will demand this level of transparency from more businesses and charities.

Whatever your own business, integrate transparency into your marketing and business model: Then use it to build trust to increase customer loyalty and gain a competitive edge.


Leave a Reply

Your email address will not be published. Required fields are marked *