Why Latin American consumers are demanding honesty – and leaving no hiding place for brands!
Thanks to their increasing ability to access (and distribute) information, Latin Americans expect to know everything about products, services, experiences and brand stories before they purchase.
Long disappointed by opaque and untruthful businesses (domestic and foreign) and corrupt institutions (local and national), consumers in South & Central America are naturally wary when interacting with brands – even those they've used for years.
So far, so familiar. What's next?
In 2015, these consumers will demand that brands proactively offer more. That means the truth on production and distribution. On brand heritage. On sustainability and ethics...
And no, one-way brand storytelling won't form a part of this picture. Instead, consumers will demand that brands start dialogues and make their messaging truly participatory.
A long history of bad brand behavior means the time for trust is long gone. Now, the only option for brands is a TRANSPARENCY TRIUMPH.
In 2013, 73% of Brazilian consumers said they want brands to be transparent about the origin and the production of goods. In 2014, this grew to 84%.EDELMAN TRUST BAROMETER, FEBRUARY 2014
Consumer/citizen confidence is low in Latin America...
Institutional corruption from and within public and private organizations has pushed citizens to breaking point.
Corruption in private and public institutions – think the recent Petrobras bribery scandal – and lack of government transparency over many issues (such as the water crisis in Brazil, the death of an Alberto Nisman in Buenos Aires, or the investigation into the disappearance of 43 students in Mexico) have eroded confidence among Latin Americans.
Only 29% of people in Peru recognize a political will from their president to fight corruption. 61% say they have no trust in the Peruvian government's health and transparency (GfK, December 2014).
Against this dire backdrop, brands need to embrace transparency wholeheartedly to earn back any confidence from consumers. Lies will be called out.
Lets face it, many companies lie. But increasingly, whether by regulatory bodies or consumers themselves, dishonesty and malpractice will be exposed:
The sales event 'Black Friday' was re-named 'Black Fraud' by Brazilian consumers as companies were spotted raising prices in advance so they could then bring them down on the day.
According to Merca 20, in Mexico between 2012 and 2015, the Comisión Federal para el Riesgo Sanitarios (Cofepris) and the Cámara Nacional de la Industria de Productos Cosméticos (Canipec) removed over 9,000 irregular or misleading ads.
In September 2014, consumers in Mexico filed a claim with Cofepris against Coca-Cola-owned Sidral Mundet after the high-in-sugar beverage was marketed as a 'healthy' choice.
"Relationships between brands and consumers are like marriages. If your husband or wife betrays you, the relationship will never be the same - even if you forgive them. Brands must understand that a relationship with a consumer is no longer just transactional, but a personal relationship too."Guilherme Minuzzi - Marketing Specialist Autonomist / Bento Gonçalves, Brazil
If you embellish your story consumers will find out.
Then they'll tell everyone who'll listen.
In the age of (mobile-first) social networks, scandals are shareable at lightning speed.
And as a media source, networks such as Twitter or Instagram feel reliable because they are composed of peers. Now, consumers in South & Central America are using these networks to expose untruthful brands.
Consumers trust information created by their friends and relatives (84%) on social networks more than information created by the companies they use (81%) or by a company CEO (59%) (Edelman Trust Barometer, February 2015).
It isn't just lies about pricing, health benefits or manufacturing that will infuriate consumers. They will sniff out dishonest brand stories too.
In November 2014, Brazil-based ice cream brand Diletto was busted by the regulatory body Conselho Nacional Autorregulamentação Publicitária (CONAR) for fabricating the story of Vittorio Scabin. Diletto claimed Scabin was the Italian grandfather of its founder, and the inspiration for the ice cream. In fact, he was entirely fictitious.
The same month, juice brand Do Bem was forced to clarify that, while they did buy fruit from small farmers like 'Francisco', who they named in their marketing, they purchased from large-scale farmers too.
Meanwhile, after being criticized on social media and BuzzFeed, processed food brand Seara was pressured to clarify that the Italian 'lasagne expert' chef featured in their commercial didn't actually serve the dish at his restaurant.
"A relationship with a brand is about trust. If a brand lied, it would made it hard for me to believe again in a brand in the same category. For example, if Hola Smoothie lied to me, it would make me distrust any bottled smoothie in the market."Juan Pablo Zapata - Consumer & Brand Insights / Mexico City, Mexico
71% Brazilians say they refuse to buy products from the companies they distrust.Edelman Trust Barometer, February 2015
"Diletto's controversy initiated a great buzz on social networks and got the attention of important business magazines. I'd rather buy from companies that have the courage to apologize for doing wrong, an open channel for critics, and strong beliefs that I also share and that stay true to them, no matter what."Filipe Alberto - Planning Director at Open & Partner / São Paulo, Brazil
There are 3 paths for TRANSPARENCY in 2015:
1. PROCESS, PRODUCT, PRICING & PEOPLE »
Brands are being transparent and honest across all aspects of their business.
2. OPEN FOR (BETTER) BUSINESS »
Brands and governments are inviting the participation of the crowd.
3. LIFTING THE VEIL »
Consumers are embracing services that lift the veil on opaque and corrupt organizations.
PROCESS, PRODUCT, PRICING & PEOPLE
Brands are being transparent and honest across all aspects of their business
Free factory visits show consumers how drinks are made
In September 2014, in response to rumors that Brazil-based customers had found dead rats in Coca-Cola bottles, the brand launched Fábrica da Felicidade ('Happiness Factory') and invited consumers (plus students and professionals) to schedule free visits where they could learn about the drink. The venue in Porto Alegre presents, in a playful manner, the entire production process of the beverage and the history of the soda.
Campaign provides access to tomato fields and farmers
November 2014 saw Unilever launch a ten-day campaign allowing Brazilian fans of Hellmann’s ketchup visit a farm to see how its tomatoes go from farm to fork and to help plant crops. Visitors of the campaign site could watch the farming process thanks to cameras embedded in the farmers’ hats, ask farmers questions, and crowdsource a Spotify playlist to be broadcast in the fields.
Chilean stationary brand is open about being robbed by its investor
In January 2015, the Chilean stationery brand Sheet was robbed by one of its own investors. The business shared the whole story with clients, including the amount of money that was taken, on the company's website. Sheet also created a new product line (an emergency kit) and asked customers to buy it to help them rebuild the business.
Furniture pop-up shows shoppers the profit earned on each product
In December 2014, the Brazilian furniture etailer Apartamento61 opened its first pop-up store at the Frida & Mina ice cream shop. Alongside the prices on the products was the profit the etailer would make on each sale. The profit is also visible on the online store. Apartamento61 explains: “with this attitude, we seek to create a transparent relationship with our customers and suppliers”.
E-commerce anniversary commercial features actual employee
To celebrate its 15th birthday, Netshoes created an advertising campaign for TV and social networks that included a real staff member. Marcio Chammas, Director of Logistics and one of the company's first employees (hired when Netshoes was still only operating in physical retail) featured in the commercial alongside regular actors.
Digital platform has 'gurus' demonstrate devices for visitors in real-time
In November 2014, Sony created Sony Guru: a digital platform for product testing smartphones and tablets. Site visitors can interact via voice or instant message with an expert from Sony. Shoppers can ask questions in real-time and view demonstrations that resolve doubts and show off the devices' features.
OPEN FOR (BETTER) BUSINESS
Brands and governments are inviting the participation of the crowd
Por Mi Barrio
Uruguayan app enables residents to report community's problems to government
Privately developed Uruguayan app Por Mi Barrio enables residents of Montevideo to report infrastructure problems in the community, such as potholes in the streets, lack of street lights or vandalism. All issues reported on the app are tagged on a map and sent straight to the city government.
Mexican bank makes transaction data open for a hackathon to improve services
In October 2014, during the second edition of InnovaChallenge,Mexican bank BBVA Bancomer provided access to anonymized user data with developers from all over the world, as part of a competition to develop innovative apps/services using the information.
"Transparency in a person is a valuable trait - and so it is with brands. We love to have relationships with people that are capable of showing themselves as they are, brands too. I buy products from a brand when I can have this same relationship."Claudia Fernandez - Director at Quiros Fernandez Design and Development Connection S.C. / León, Mexico
Colombian political party offers courses to turn citizens into political innovators
Alianza Verde (a Colombian political party) is working to change mindsets around public participation in politics. It created the Escuela de Innovación Política (School of Political Innovation), where citizens can learn how to become political innovators. A free online course uses Design Thinking's methodology to help students discover their community's needs and solve issues with political actions.
LIFTING THE VEIL
Consumers are embracing services that lift the veil on opaque and corrupt organizations
During elections in Brazil, website shows candidates who tried to censor the internet
Launched in September 2014, the website Eleição Transparente ('Transparent Election') let citizens in Brazil discover which political parties and candidates had submitted legal requests to have information removed from the internet or attempted to suppress data. Individuals and parties were ranked by the number of requests and presented in simplified infographics. Eleição Transparente was developed by the Associação Brasileira de Jornalismo Investigativo in partnership with Google.
Collaborative website checks all data the Argentine president references
Every March 1st, Argentina's president Christina Kirchner opens congress with a speech about the government's recent achievements and goals for the following year. In March 2015, crowdsourcing platform Chequeado was created to fact-check the president's interpretation of the data. Chequeado (accelerated by Hack Labs) invites volunteer journalists check every figure the president mentions in real time. The site's objective is to "raise the quality of the debate and avoid intellectual impunity".
Online platform spots conflicts of interest between politicians and businesses in Latin America
Poderopedia is a platform created in Chile to track 'who's who' in politics and business, and establish links between people in both sectors that might reveal conflict of interests. The platform has information on more than 3,500 people and 2,000 companies, and creates maps of relationships and sources. In Chile, Poderopedia has revealed patterns in data that, once shared, have made an impact on the media and public. In April 2014, the platform expanded to Venezuela and Colombia.
Venezuelan app allows citizens to report corruption
Available to download in Venezuela in March 2015, Dilo Aqui is an app developed by Transparencia Venezuela to help citizens anonymously flag government corruption. Consumers can register corruption cases, choosing among many categories (such as poor use of public resources and poor use of public assets) and can also upload images and videos. After registering a case, the user receives a registration number to track the enquiry, the Government sector involved is contacted, and the claim is processed by the Asistencia Legal Anticorrupcion (ALAC).