Consumer trust as a competitive advantage in the retail sector

Abstract

The issue of consumer trust is a very popular topic in the literature, but its approach from the perspective of competitive advantage is rare. Having a competitive advantage is important because it plays a key role in the long-term success of a company and in strengthening its market position. Competitive advantage models traditionally focus on costs and brand awareness and neglect soft factors. Yet both virtual and physical stores can rely on consumer trust in them. Barney's VRIO analysis explores the relationship between VRIO and competitive advantage. The basic premise of the model is that resources that are valuable, scarce, difficult to replicate and embedded in the organisation are closely linked to a company's competitive advantage. In our study, we use qualitative methodology and VRIO analysis to show how consumer trust can help small retail firms to operate. We find that high consumer trust contributes to strengthen a business in an almost invisible way. After all, the right level of consumer trust can give any organisation a significant competitive advantage and boost its results.