The business of authenticity

Consumers will no longer buy unless they feel the brands they shop with are authentic. Brands that understand the unique challenges to building authenticity in all their markets will see the results in sales and customer loyalty, says Jonathan Sheard, Vice President, Sales at ESW.

The word authenticity jumped into mainstream consciousness in 2019. Brands such as Nike attracted record audiences at the NRF retail show in New York that year. Research budgets were diverted towards understanding how consumers, particularly Millennials, felt about the importance of authenticity in their brands choices. And, the word appeared in almost every key word search manual for brands large and small.

Forward nearly five years and the word has gained a new urgency in the era of post truth, falling trust in many institutions and now artificial intelligence, which has narrowed the gap between the real and the fantastic.

Brands trading in multiple territories will be interested to see just how important authenticity is, but also how big the gap is between those who care deeply and those who care less. According to ESW’s latest Global Voices Survey, of more than 18, 000 consumers in 18 countries, shoppers around the globe want the brands they shop with to be authentic.

59% of respondents said that when choosing a brand to shop with they look for evidence that the brand is true to its core values. And in terms of authenticity, overall, 70% agreed that they will only exclusively shop with brands and retailers who they believe are authentic. However, there were wide regional variances; in India the figure was 89% and 88% in the UAE, falling to 58% for South Korea and 57% in Switzerland.

The research goes on to demonstrate the benefits of being authentic; 64% of shoppers say they spend more with authentic brands, while 51% say that they will continue to shop with these brands even if prices rise. The research also exposed the cost of not being authentic; 64% of respondents said they would shop a brand’s competitor if the brand was not authentic.

Brands are responding. The Business of Fashion/ McKinsey 2024 ‘The State of Fashion’ report says, “After years of relying on performance marketing, brand marketing may increasingly take centre stage in the year ahead, with 71% of executives planning to spend more on brand marketing than the in 2023 in a bid to cultivate emotional connections with customers.”

This emotional connection has a commercial imperative; in research by Sprout Social, 76% of respondents said they would buy from a brand they feel connected to over a competitor, and 57% said they are more likely to increase how much they spend with a brand when they feel connected.

The key learning here is, being authentic is as much about concrete characteristics such as being able to demonstrate sustainability across the supply chain, as it is a part of the emotional connection based on trust, a belief that the brand takes a responsible approach to protecting the Earth’s resources, to treating its staff with respect, and dealing with partners and suppliers fairly and openly.

55% of respondents said brand-operated channels deliver more authentic brand experiences online - proof that brands that prioritise authenticity have a competitive advantage and stand out in crowded markets. Key to being and being seen to be authentic depends on an ability to localise through messaging and brand presence in each market.

1. Brands need a deep understanding of the local culture, customs and values in each market. They should conduct thorough research and engage with local experts to ensure brand messaging and actions are culturally appropriate and resonate with the target audience.

2. Brands must adapt brand messaging, content and marketing strategies to suit the specific cultural and linguistic nuances of each market. This includes translating and localising the website, social media content, advertisements and product packaging to align with local preferences and sensitivities.

3. Merchants should develop marketing campaigns that are relevant and relatable to the local audience in each market. They should consider local trends, holidays and traditions when crafting campaigns. In addition, personalised messaging addresses the unique needs and aspirations of the local consumers.

4. Customer feedback lets brands understand customers’ specific needs, preferences and challenges. Brands should use this feedback to refine products, services and overall brand experience to better cater to the local market.

5. Brands and retailers must establish local teams and hire local representatives who understand the market and can provide insights and perspectives from within. Local employees can help bridge cultural gaps, offer local expertise and ensure that your brand is authentically represented.

Brands that embrace authenticity will differentiate themselves from competitors. The journey must start with localisation, a process that depends on working with a partner that has experience in helping brands to reach new global customers with exceptional, domestic-equivalent experiences.