Interviews, insight & analysis on digital media & marketing

How can online retailers bridge the ‘Retail Trust Gap’?

By Angel Maldonado, Founder,

Online retailers are facing an increasingly challenging set of circumstances. The BRC has shown online retail sales figures falling year on year as consumers move back to pre-pandemic behaviours and the cost of living crisis continues to put consumers under intense financial pressure. At all times, but certainly within the current climate, forming  strong and long lasting relationships with consumers is absolutely essential.

However, far too many in the ecommerce sphere are failing to do so, prioritising clicks and impulse purchases above long term and sustainable growth.

The current models employed by the ecommerce industry have been reliant on a captive audience willing to be enticed by advertisement into impulse purchases and on the pervasive use and collection of customer data. The previous conditions that underpinned this model are falling away, meaning that consumers are not only more financially discerning but are actively looking to avoid retailers that fail to respect and protect their privacy.

The Retail Trust Index from revealed that over 60% of consumers are shopping in-store to avoid online tracking practices and over two-thirds feel their data is more secure when shopping in-store. This clear difference between consumer perception of in store versus online shopping is a significant challenge for online retailers to overcome and  if they are to bridge this gap, a complete change in approach is required.

The erosion of consumer trust

Online retailers have become hooked on the collection and use of customer data. The extent of this can be clearly seen when analysing the use of cookies and trackers in the industry. On average a consumer will have 10 separate trackers monitoring their online behaviour when visiting the site of a top UK retail brand and this could rise to as much as 40 when visiting certain retailers online.

The prevailing argument across the industry has been that this practice is an equitable transaction, where consumers give over their data for access to a digital service such as online shopping. However, with over 50% consumers feeling that online retailers are not doing enough to protect their data and 70% viewing online tracking as intrusive demonstrates why the sector cannot continue down this path.

Online retailers have also relied on a certain level of tacit acceptance or even a lack of understanding from consumers as to how their data is collected. What is becoming clearer as consumers become increasingly tech savvy is that their tolerance of such practices are lowered, with younger generations in particular more likely to avoid tracking from brands when online. Online retail has reached a tipping point, where it can either change tact or risk irrevocably damaging consumer trust beyond repair.

Bridging the gap

Restoring trust amongst consumers is no easy feat for online retailers, and will require clear and affirmative action. As current models are so reliant on the capture of data, the sector has to embrace a complete change in ethos and move beyond viewing their customers as a set of data or a demographic to be targeted.

This approach has led too many retailers to view their customers in a simplistic and one dimensional manner, failing to gain a real and genuine understanding of their customer base. This not only highlights how a data centric approach can damage consumer trust but also inhibit retailers’ ability to cultivate brand loyalty and repeat custom.

In order to bridge the gap between in-store and online shopping, ecommerce needs to return to basic retailing principles that look to create an enjoyable experience rather than maximising the amount of data they can collect.

Online retailers must also begin to embrace a transparent approach to data privacy practices and place power back in the hands of the consumer. For too long retail has only looked to do the bare minimum. Whilst many in the sector would point to their adherence to GDPR as evidence of improved practices, in reality they didn’t use the opportunity it presented to clearly communicate their data practices.

There has been a clear inequity of power  between retailer and consumer when it comes to data. Building a relationship with the consumer that is based on transparency and trust will cultivate a customer loyalty that can withstand the economic challenges that lay ahead. Without it, online retailers face being the first port of call for consumers looking to cut down on spending.

Bridging the ‘Retail Trust Gap’ and establishing ‘Digital Trust’ is a vital challenge for online retailers. According to a new survey from McKinsey & Company, businesses that prioritise ‘Digital Trust’ are 1.6 times more likely to boost revenue and EBIT growth rates by 10% or more. As latest economic forecasts predict recession for the UK economy, the value of ‘Digital Trust’ will only increase. The online retailers that successfully cultivate this will be best placed to navigate the challenges ahead.