We fish them out of our mailbox week in, week out: stacks of special offers, inches high. From cheap yoghurt and fitness devices to super discount prices, everything is there. Regardless of whether it is a discount store, drug store or a large supermarket: these are all designed to tempt as many consumers as possible into a store. However, these price wars do not only place retailers under pressure, but it is also occasionally tricky for consumers to maintain an overview of the situation. In addition, not everyone wants or is even able to only focus on special offers when shopping. A retailer can only be successful in the long term when customers have trust in them. What is the state of play in Germany with regard to trust in grocery and drug stores? Where do consumers feel at home when it comes to FMCGs? Who do they trust more than others? The drugstore “dm” leaves all other trailing in its wake in the trust rankings.
For the third time since 2010, GfK Verein surveyed around 2,000 consumers, as representative of the German population, and asked about their trust in various retailers. They were asked to assess three different retailers, each of which were allocated randomly. The only condition was that the respondents shop at these places at least occasionally in order to be able to realistically evaluate the retailers. Overall, the top ten retailers in terms of sales of FMCGs were assessed on the basis of trust. Are retailers doing everything to make me happy? Do I trust them completely? Do I perhaps trust this retailer more than another? These questions on competence and intention, trust and having an edge over competitors in terms of trust formed the basis for the evaluation of retailer trust in this GfK study.
Overall, the companies assessed can be pretty satisfied with their reputation among Germans. On a scale from 1 to 7 (strong disagreement to strong agreement on positive statements of trustworthiness), half of Germans awarded the companies a rating of 6 or 7, which places them at the top end of the scale. However, three retailers significantly exceed this value. In first place is the drugstore dm: its overall trust value is 63%. Rossmann, a competitor, was unable to fully keep pace in registering a score of 51%, placing it fifth overall in the rankings. Supermarkets Edeka and Rewe find themselves in second and third place with trust values of 58% and 56% respectively. Kaufland, another large supermarket chain, follows in fourth place, at 52%. Of the discount stores assessed, Aldi performed best with 48%, securing sixth place in the process. However, its lead over its main competitor Lidl is wafer thin at just one percentage point. Lidl shares seventh place with the large supermarket chain real, which unlike others in its category, was unable to reach the top half of the rankings. In ninth and tenth place are Netto and Penny, which each scored just under 40%.
A glance at the individual factors which make up consumer trust reveals in which areas companies are performing well overall and where there is room for improvement. Just over half of respondents agree that the retailers assessed do everything in their power to make their customers happy. Rewe performs particularly well when it comes to the individual values for competence and good intentions: the large supermarket chain achieved 61% in this regard, even better than Edeka. An even greater proportion of respondents award good marks in terms of the basic level of trust: 55% of respondents agree with the statement “I completely trust [insert respective retailer here]” Looking at the companies on an individual level shows that nearly all attain top marks in this category. dm is top of the pile: 68% of respondents are certain that they can completely trust the drugstore. In contrast, it is evidently harder for the companies to eke out a competitive edge over their competitors in terms of image: Just 43% of respondents claim to find a certain retailer more trustworthy than another.
“It takes 20 years to build a reputation and five minutes to ruin it,” is a quote attributed to U.S. entrepreneur and investor, Warren Buffett. Retailers also face the challenge of maintaining or, if possible, increasing the trust placed in them by customers from one day to the next. A comparison over time reveals how consumer trust has developed since 2010, which retailers have improved, which are stuck in a downward spiral and which have remained stable.
The highest gain in trust was recorded by Rewe: in 2010, just under one in every two respondents agreed with positive statements relating to the retailer. Today, the corresponding value is 56%, which is not only significantly higher but also places the retailer in the top three overall. Furthermore, while supermarket real may well be a fair way off this ranking, it can still be satisfied with an increase in trust equivalent to three percentage points.
Among the discount stores there was a clear winner: Lidl managed to increase overall trust from 40% in 2010 to 47% today. Aldi bosses should take note of this as their credibility has repeatedly taken a hit over the past few years: its overall trust value has fallen continuously from 55% to a current level of just 48%.
Three companies, namely dm, Edeka and Kaufland, have not suffered any loss in trust at the present moment. These companies have managed to maintain relatively stable and, at the same time, high levels of trust. Netto and Penny have similarly been able to record pretty stable results, albeit at a much lower overall level. The picture is a different for Rossmann: after the drugstore was seemingly able to profit from the collapse of Schlecker in 2012 and improve their reputation, Rossmann bosses must now confront a decline in the company’s public image. Today, 51% of customers express very high trust in Rossmann, yet three years ago this value was 55%.
A look at socio-demographic factors of the four largest retailers in terms of scope (Edeka, Rewe, Aldi and Lidl) reveals that age and gender play a significant role in how credible and trustworthy respondents deem a particular retailer. In general, women tend to be slightly more positive in their assessments of the various companies: they are more likely than their male counterparts to give higher marks to all retailers included in the survey, particularly discount stores. Breaking down the results by age group reveals only minimal differences: Edeka performs particularly well among the oldest generation, while Rewe is popular among 35-49 year-olds. Among the discount stores, Aldi enjoys a high level of trust above all from the 50-64 age group.
So, how will consumer trust in the retail sector develop in future? Which strategies can increase trust and how might retailers find themselves sidelined? One thing that is for sure is that the pressure to which companies are subjected will not subside in the future. Retailers will be competing for ever fewer customers on account of demographic change. And these customers are becoming increasingly better informed: online media users are just a click away from current news, price information and alternative offers. In this sense, digitization will therefore create new competition, while also opening up new opportunities for retailers to reach out to customers. The situation remains exciting if a little tense for retailers. Perhaps this old pearl of wisdom from the banker and philanthropist Charles Lazarus Hallgarten may help retailers in selecting a suitable strategy: “My best ideas come to me when I imagine that I am my own customer.”
Data source: GfK Verein; Study „Händlervertrauen 2016“, (Januar 2016)
Responsible for the article and contact person for queries about Compact: Claudia Gaspar (e-mail to firstname.lastname@example.org).