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Radical Transparency: The Key to Retail Success?

The age-old adage “put your best foot forward” is an antiquated idea for many retailers. Spurred by the increased influence of social media, many companies have decided that sharing the good, bad, and ugly aspects of business is the most tactical marketing route to take. This approach, also known as “radical transparency,” is a commitment to openly discuss company flaws, missteps, and organizational processes with existing and potential customers.

Online clothing retailer Everlane has put this approach into full effect. Radical transparency is at the very core of their business model. They believe it is important for customers to know exactly where their clothes are coming from and the price at which they are manufactured.

Also in on the radical transparency trend is the iconic brand McDonalds. The quick serve restaurant chain has long been criticized for using questionable substances in their food. Thus, McDonalds began a transparency campaign called “Our Food. Your Questions,”  which is an online Q&A forum that answers customer’s questions – even questions regarding the use of a “pink slime” filler in their beef. McDonald’s admitted to using said slime for a brief period of time, but pledged that they were now committed to only using 100% beef. Talk about transparency.

As many retailers and restaurants are finding out, lack of transparency can be costly. Fast-casual restaurant giant Chipotle has recently come under fire for allegedly covering up outbreaks of norovirus in their food. This break in consumer trust is going to make the climb to win back customers’ approval all the more steep.

The gain of radical transparency can be quite significant. When customers feel that they know a company, that develops trust, and trust often leads to brand loyalty. But, there are downsides to transparency as well. When a company chooses to be radically transparent, retreating back to opaque marketing tactics is no longer an option. Additionally, some customers may choose to part ways once they have a broader understanding of a company’s processes. Though trust is gained with radical transparency, customers may still be lost. The decision to be open with policies, practices, and problems will create additional pressure and obstacles for companies, but the return of investment in brand loyalty may prove to outweigh these potential hurdles.

The Bottom Line

How do you decide if radical transparency is a good marketing tool for your company? It all goes back to knowing who your customers are. For example, if you cater to a primarily millennial crowd, transparency would likely be beneficial. Savvy retailers use analytics to know their customers because it gives them a better understanding of the pain points that will resonate with those whom they are marketing to.

Do you know who your customers are? Maybe it’s time to utilize analytics to optimize strategies for success.

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