Consumer trust in the US is at one of its lowest points in the last decade, according to new data from Qualtrics XM Institute. Setting aside the pandemic crash in 2020, consumer trust is at its lowest point since 2016. Historically, 52% of consumers trust organizations to meet their expectations. Outside factors, such as societal and cultural factors and the economic climate, pushes trust higher or lower.
For the past 12 years, the XM Institute has asked 10,000 US consumers about their interactions with businesses across several industries such as retail and airlines to understand how consumers feel about the businesses and organizations they shop, bank, travel or otherwise do business with. As organizations incorporate AI into customer interactions, trust will be more important than ever and a significant factor in how consumers feel about interacting with AI.
In 2020, trust saw its biggest single-year drop, falling nine points to 45% as businesses and consumers alike were forced to adjust to a sudden and dramatic shift in the way they live and work. Since hitting its lowest level in 2020, trust has not recovered to pre-pandemic levels, and has even lost a little of the rebound it experienced in 2021.
“Consumers are still reeling from the past few years of rapid change and uncertainty,” said Bruce Temkin, head of Qualtrics XM Institute. “As AI becomes more prevalent in consumer interactions, trust will be more important than ever. By communicating clearly and providing exceptional service, companies can earn trust with people who will be more likely to become a repeat consumer and actively promote the business to their friends and family.”
Members of Gen Z Are Less Likely to Trust
Gen Z consumers are the generation least likely to trust that the companies they interact with will meet their needs, even after gaining trust in the past year. Just 28% have confidence in the organizations they do business with, compared with 57% of Baby Boomers. Gen Z’s purchasing power is growing, and their expectations are different from previous generations, suggesting that companies may need to adjust their strategies to earn trust among this important audience.
The trust gap between generations is especially notable when comparing how much people trust investment firms or utility companies; the gap between the oldest and youngest generations is more than 40 points.
|Gen Z (18-24 years old)
|Baby Boomers (65+ years old)
Financial Industries Gained Trust, but Hotels Haven’t Recovered from the Pandemic
While consumer trust overall is nearly at its lowest level since 2016, some industries have actually increased trust in recent years. Trust is higher now for consumer payment companies as new technology and tools like Venmo and Square became more common and widely used. Banks also gained consumer trust, likely in response to the economic expansion and pandemic recovery.
Meanwhile, consumer trust declined significantly for hotels as COVID upended travel in 2020. In 2019, consumers trusted hotels more than the average across all industries, but this trust plummeted in 2020. It has since recovered somewhat but consumer trust remains lower than it was before the pandemic.
“Companies need to explicitly and intentionally focus on trust in 2024, but focusing on both its rational and emotional elements,” said Temkin. “Act consistently, avoid over-promising, be transparent about what your consumers care about most, and accept responsibility when something goes wrong.”