In February 2019, e-commerce surpassed traditional brick-and-mortar stores in sales. Since then, the industry has continued to grow year after year, a trend that is set to continue. This growth is accompanied by increased calls for transparency — a move that has not only made businesses more ethical but also more profitable.

Transparency has given consumers a clearer insight into costs, fees, and clauses. However, businesses have been able to use this transparency to their own advantage.

This article looks at how the commerce sector is leaning into transparency and the benefits it brings the consumer.

The Trust Crisis in Digital Platforms

Transparency and trust have long been issues among digital platforms. A 2023 report found that 45% of entertainment companies carried a mandatory “drip fee.” Across all commerce sectors, these hidden fees cost consumers approximately $3 billion per year and make them wary of digital platforms.

This distrust also came at a significant cost to the industry. Businesses were forced to make sacrifices to complete deals, such as cutting costs and reducing profits. Repeat business and client loyalty also dropped. People felt no obligation to be loyal to brands that charged them hidden costs, especially when the costs were never explained to the consumer.

This breakdown of the supplier-client relationship ultimately led to a call for increased clarity, which changed the e-commerce landscape for the better.

What True Transparency Looks Like

True transparency goes beyond simply adopting an all-inclusive pricing structure. Yes, it’s essential to show people the breakdown of what they are paying for. Transparency is about establishing clear processes and fostering meaningful relationships. Customers want to feel valued, not treated like profit margins. 

Product descriptions that accurately cover the item being sold ensure that the right people see the products they need. Most sites now include customer reviews, which give the end user the chance to provide their genuine and honest feedback on a product. Feedback is there for all to see, good or bad.

True transparency is built into every page and every click. Processes, procedures, timescales, and rights are clearly exposed and easily visible—not hidden behind complicated text buried seven submenus deep. Clear and concise language on all levels makes a business more appealing to customers and helps to rebuild the trust that many people have lost.

E-Commerce and Increased Supply Chain Transparency

E-commerce and online marketplaces have benefited from adopting open and transparent policies. Companies offering a transparent subscription service have seen significantly higher retention rates, as customers want to know exactly what’s included. Clearly defined billing cycles and cancellation processes, free of tricks and hidden requirements, are more trustworthy. 

Modern consumers want to know more about how their products are sourced. Studies have shown that 64% of women and 54% of men consider accurate product descriptions and images to be the most important factors when making an online purchase. 

They are concerned about the environment and are working to reduce their carbon footprint. Research also indicates that 94% of customers desire complete supply chain transparency, as this provides them with a clear understanding of the origin of their products. In fact, it is so important that the same report confirms 39% of people will switch to a new brand purely because of its transparency level.  

Digital Entertainment and Gaming’s Transparency Revolution

The entertainment industry has undergone significant changes in response to increased transparency. Streaming platforms now offer a more detailed overview of the titles they currently have and those coming soon. Meanwhile, membership options and levels now have defined criteria, allowing users to understand exactly what they are paying for. 

In the video game industry, microtransactions account for a substantial portion of profits and are forecasted to reach $285 billion by 2026. The increased spending has brought the need for greater clarity. Previous loot-based systems left rewards in the hands of the RNG gods, with no clear overview of what players were likely to receive. Now, many are moving to a clear progression pathway, with some leaving the pay-to-win model behind. Those that continue to use packs and surprise cards often include probability numbers to increase transparency. This provides players with knowledge of what they are likely to receive. Setting clear expectations reduces disappointment, disillusionment, and anger about their results.

The online gambling world has seen similar improvements. Sites once hid their payouts behind complicated minimum spend or payout requirements. At the same time, bonuses were equally complex to understand and obtain. Fast-forward to today and you’ll find that some online casinos offer no-wager bonuses that are free of all complex and misleading terms, leaving players with clear expectations and tangible rewards. 

The Business Case for Radical Transparency

Businesses that embrace the call for transparency are likely to have higher customer retention rates. Trust is crucial in commerce. When customers understand what they are buying and the terms and conditions that go with it, they are more likely to finalize their purchase.

Additionally, when clients know that a company is being honest with them and can be trusted, they are likely to spend more money. Loyal customers are more likely to forgo hunting down the best possible price in exchange for dealing with a company they know and respect.

Beyond making a sale, radical transparency saves companies time and money. When everything is clear and honest right from the get-go, companies receive fewer service enquiries and return requests. This reduces internal overheads, allowing the business to offer better pricing or more enticing special offers.

Conclusion: The Future Belongs to the Transparent

Honesty is the best policy, and it is also the most profitable and sustainable one. Openness fosters deeper customer relationships, strengthens a brand’s reputation, and leads to reduced operational costs while creating sustainable competitive advantages.

The push for transparency comes from both sides. Consumers want to know what they are investing in. Businesses understand the benefits of transparency in their processes and policies.

While new regulatory changes surrounding enhanced transparency are forthcoming, the real driver will be when companies leverage clarity as a means of competitive advantage. Utilizing this transparency to gain insight into and understand their competitors will enable companies to offer better deals and services to their clients.