handshake of businessmen. the concept of successful negotiations.


By Manish Bahl, senior director, Centre for the Future of Work, Cognizant

Retailers across Australia are competing in the race to omnichannel and personalised shopping experiences, each one of them using the latest and smartest technology platforms available to make the most of the myriad of personal data collected from customers.

Most retailers know that in today’s digital era, data privacy and data theft are growing concerns for consumers and a factor likely to alter their trust in a brand. Despite this, many retailers don’t consider the loss of trust as a significant business risk, and suffice with adding a data security policy page on their website. But understanding such policies is almost impossible from a consumer’s standpoint.

Reality check: Overlooking customers’ data privacy concerns is dangerous 

Retailers need to recognise that misusing or leaking customer data, even unintentionally, can break trust forever. A considered trust strategy will help maintain customer loyalty and continue business growth. In a recent Cognizant study of 2,400 consumers in the Asia-Pacific region, we found retail is one of the three industries least trusted by consumers.

Tarnished reputations and declining profits are only a few of the many subsequent losses that can occur if businesses somehow break this silent ‘trust contract’.

Broken trust breaks business, brand and loyalty

Consumers may forgive companies for their mistakes, but not for dishonesty. Inappropriate use of data or a lack of data security is often the largest ingredient in a recipe for disaster. Brand loyalty is the result of trust cultivated over many years, but it can be destroyed in an instant. For instance, an Australian chain of discount stores was criticised on social media recently when customers complained the company provided limited information and guidance following an online security breach.

This is just one of many examples showing how data security and trust are the new KPIs for building strong business growth, brand image and customer loyalty.

The trust equation

With trust also come intangible values. These need to be communicated to the consumer and can’t be manufactured by complex algorithms.

There are many ways to represent the hidden mechanism of trust, but we’ve found the following equation to be useful for turning this nebulous concept into something more quantifiable and actionable: TRUST = (R*C*I)/SO

In this equation, R stands for ‘Reliability’, C for ‘Credibility’, I for ‘Intimacy’, and SO for ‘Self-Orientation’. The first three elements directly correlate with trust, and have a multiplier effect. Conversely, self-orientation undermines trust.

Put simply, overt selfishness erodes trust.

There’s a new job opening: Chief Trust Officer

If it isn’t already, trust should be a major concern and business priority for companies, especially those in the retail space dealing with streams of personal data and using data analytics platforms to create their sales and marketing strategies.

Trust is not a compliance or technology issue, but a brand-level risk/opportunity and should be taken care of by a trust expert, that is, a Chief Trust Officer. This role should be able to include all aspects of the trust value chain into the equation, and collaborate with every department of the organisation to ensure trust is built and maintained at all levels of the company, internally and externally.

Customers will continue to demand unique and personalised shopping experiences and that requires more data to be used more strategically to drive the best possible decisions. Businesses need to understand that customers’ privacy fears are of paramount concern and addressing them early has the added benefit of strengthening relationships with customers and bolstering brand perception. The most successful businesses will be the ones that maintain their customers’ trust and subsequent loyalty by making sure data security and data ethics are integrated into their retail strategy.