This year, the US consumer industry has seen a significant reputation decline of 4.4-points year over year. While the decline has been on par with that of other industries on average, it poses the pressing question of what consumer companies can do to win back reputation and regain the trust and support of existing and potential consumers.
Defining the Consumer Industry
At Reputation Institute, we define the consumer industry as an industry comprised of companies producing consumer goods that are non-perishable and not industrial in nature. Consumer companies both manufacture their own products and sell them either direct to consumer or to other intermediaries – including retailers.
Key Reputation Insights for the US Consumer Industry
The Consumer Industry in the US must take calculated steps to repair its fractured reputation. Based on our research insights, we recommend the following 5 key strategies:
- Drive what matters. Figure 1 shows the relative weights of what we call seven dimensionsfor both customers and non-customers in the consumer industry. Dimensions highlighted in blue are the highest weights for the respective stakeholders. Delivering on Products, Governance, and Citizenship is a priority for consumer companies when creating a strong reputation foundation – especially among non-customers. In addition, Innovation and Performance also play an important role for customers.
- Assess and address content shortcomings. Figure 2 illustrates the dimension scores in 2018 for customers and non-customers and their decline. Among both customers and non-customers, declines are driven by perceptions of Corporate Social Responsibility (Workplace, Governance, and Citizenship), plus Innovation. However, drops in perceived performance are more severe for customers than non-customers. Consumer companies must focus on the most impactful reputation dimensions that have suffered the greatest losses year-over-year.
- Leverage brand strength and communication. Consumer industry reputation is driven by two components: 1.) content and 2.) corporate brand strength/communication strategies. As displayed in Figure 3, content accounts for 70% of the variation in reputation score, while brand strength/communication accounts for 30%. In the absence of brand strength and good communication, companies are leaving reputation equity on the table.
- Project the right corporate brand persona. Consumer companies that are perceived as exciting, creative, genuine, and intelligent benefit from an additional reputational lift. But consumer companies suffer from low association with those personas, as shown in Figure 4. Fostering association with these brand personas is especially critical among non-customers.
- Develop age appropriate reputational strategies. Figure 5 shows reputation score by age group for both customers and non-customers. Among both customers and non-customers, the youngest are the most critical of the consumer industry and the oldest ones are the least. To win over and retain 18-24-year-olds, consumer companies must prioritize Governance and Citizenship.
A Reputational Recovery for the Consumer Industry
While the consumer industry has lost support from its key stakeholders, there are signs of hope for a reputational recovery in 2019. As of July 2018, the consumer industry increased its reputation from 72.1 to 75.3, a 3.2-point increase since January 2018. For consumer companies to maintain their strong scores well into 2019, they must enact the key insights listed above. In other words, they cannot take their recent uptick for granted, or they will risk losing steam well into 2019.
Access the complete 2018 US Consumer RepTrak report to discover the most reputable Consumer Industry companies in the US.