Progressive Grocer Independent

OCT 2014

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Mark Batenic is president and CEO of Chicago-based IGA, the world's largest alliance of independent grocery retailers. For more information about IGA, or to sign up for its daily e-newsletter, The Independent View, visit www.iga.com. Independent Insights By Mark Batenic 30 | Progressive Grocer Independent | October 2014 Mark Batenic is president and CEO of Chicago-based IGA, the world's largest alliance of independent grocery retailers. For more information about IGA, or to sign up for its daily e-newsletter, The Independent View, visit www.iga.com. B rands are everywhere. From the logos on our tech gadgets and the banner ads on our comput- ers, to the emblems on our clothes, to the boxes, cans and bottles in our pantries and refrigerators, we're inundated with brands at every turn. So how does a consumer choose one brand over another? It all goes back to trust. IGA Chairman Dr. Tom Hag- gai says we have a responsibility to create a "covenant with our customers." What he means is that we have a respon- sibility to provide services and oferings that our shoppers can trust, and when we do so, that trust flters down to instill trust in the brand itself. Bonding With Customers With the retail world changing rapidly, that bond of trust is becoming harder to create. In Harris Interactive's latest pub- lic opinion poll of 18,000 people gauging the most trusted brands in the country, only two brick-and-mortar retail outlets made the top 10 this year: Whole Foods Market (8) and Costco (6). On the one hand, it's not surprising that Whole Foods makes an appearance on the list, given it's the nation's leading natural and organic food retail outlet. Addition- ally, consumers love what it stands for, team members repeatedly cite a commitment to health and professional growth opportunities as reasons for Whole Foods being a great place to work, and the company was one of the frst in the industry to have a proven commitment to sustain- ability. It will, however, be interesting to see if fallout from this year's class actions related to understating the amount of sugar in its store-brand yogurt, natural and organic labeling, and allegations of weight infation in pre- packaged foods will afect next year's rankings. As for Costco, it's not hard to fgure out why people trust this brand: Tey like to save money. Of course, that's not the only reason. Costco allows returns without ques- tion on most items, and ofers customers a refund when products don't meet its standards. Te retailer also pays its employees well and provides company-sponsored health Build Trustworthy Brands Tap into consumers' emotions to create loyalty to your store. insurance. Also, it has no public relations staf; the CEO does all interviews alone — a rarity — and the company has so far avoided testy relationships with the media by conducting its business ethically and responsibly. Amazon on Top While it's not a brick-and-mortar retailer, who can overlook the list's frst-place company, Amazon, the retail elephant in the room? Tose of us who still crave the stabil- ity of a good, old-fashioned store may scof, but consumers do trust Amazon. Tey can fnd almost everything they want and have it shipped right to their doors the next day. Couple that with great prices, a reputation for security, and the fact that Amazon knows its customers extremely well, and it's obvious that Amazon is a trustworthy force to be reckoned with. Yet Amazon struggles with an important component of trust: emotion. Whereas people are often highly emotional about Apple (3) or Sony (10) brands and products, Amazon hasn't solidifed that emotional connection to its brand. Clearly, that hasn't hurt it overall, since it's still topping the list, but the lack of an emotional connection does make a diference when it comes down to a choice between buy- ing groceries online via Amazon or at a local independent retailer, especially if that retailer has built an emotional bond with its customers and community. How can retailers build such a bond that beats out not just Amazon, but also every other competing brand? IGA is all about personalized service, giving back to the community, and providing products that our customers have known and trusted for more than 80 years. If we create a true covenant with our customers to treat them with the integrity and respect they deserve, there's no brand that can beat us. What are you going to do to build that trust? PGI We have a responsibility to provide services and offerings that our shoppers can trust, and when we do so, that trust filters down to instill trust in the brand itself.

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