Increasing connectivity looms as a threat to consumer trust in Latin America

In a consumer trust survey covering six key sectors and conducted by Llorente y Cuenca in nine Latin American markets, the food & drinks sector has come out on top ahead of pharmaceuticals and retail, with consumers in the north of the continent generally more trusting than those in the south. Connectivity, however, may be having an impact.

Taking in the views of nearly 4,000 consumers across Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Peru and the Dominican Republic, and exploring the consumer trust relationship with the key sectors of food & drink, automotive, pharmaceutical, financial services, retail and telecommunications, the survey by communication and public affairs consultancy Llorente y Cuenca has found that food & drinks businesses are on average the most trusted in Latin America.

Overall, the pharmaceutical and retail sectors were considered the equal second-most trustworthy (with a tally of 7.2 out of ten) following the food & drinks sector (7.5), while the telecommunications (6.8) and financial services (6.6) sectors received the lowest trust ratings in the region. The automotive sector meanwhile earned a trust grade of 7.1, which along with retail was above average when compared to other regions.

The results, however, highlighted some distinct divides between the countries surveyed per sector, with the more northern consumers in Mexico, Panama and the Dominican Republic expressing overall greater faith in big business than their more cynical southern counterparts in Argentina, Peru and Chile – the latter of which registered the lowest levels of trust across the region despite being considered the best location for business.

Chilean consumers, for example, assessed the food & drinks sector as a 6.6 for trustworthiness, compared to a 7.9 rating in Mexico, while consumers in Panama felt that financial service providers were worth a 7.3 on the trust scale against a 5.7 score in Argentina – although this may not be surprising given the contribution of financial services to Panama’s GDP and the dire state of an Argentinian economy riddled by foreign debt and fiscal mismanagement, which continues to hamper the country’s overall business climate.

Still, despite the variances, consumers in Latin America are on the whole more trusting than those in Spain (the home market of Llorente y Cuenca), and by a fair margin – with the corresponding survey in Spain producing an average result of 5.8 and none of the sectors earning a score higher than 6.3, compared to the consolidated score of 7.1 across sectors in Latin America and a lowest score of 6.6 (although financial services wasn’t assessed in the Spanish survey).

In contemplating the differences between regions, the consulting firm forwards the idea that the internet may be playing a part; “when contact intensity (connectivity, e-commerce, transactions) is greater, there are more ‘moments of truth’ when more frustrating and also more satisfactory situations are or may be generated.” While the Latin American region as a whole has reached an internet penetration rate of 61 percent, some sources give the figure in Spain as having pushed above 90 percent, with the country one of absolute world leaders for mobile connectivity.

Interestingly, Chile, which is the least trusting of those surveyed, also leads Latin America for internet connectivity – last year ranked 25th worldwide in an index compiled by Chinese telecommunications giant Huawei. Chilean consumers also consistently ranked higher across each sector in the Llorente y Cuenca survey for the value they placed on communications (transparency) in assessing business trustworthiness, privileging this criterion as a ratio above business practices (integrity) and product/service (credibility) as compared to other countries.

According to Llorente y Cuenca, the growing online engagement trends in Latin America are granting consumers more power in their relations with businesses, and presenting greater potential for the erosion of trust; “Inevitably, the increased connectivity and boom of social networks have converted the relationship between brands and consumers into a glass box, which requires a more direct, transparent approach. The challenge of meeting expectations in an era of Fake News is not to be infallible, but to be honest when one makes a mistake.”