Signal to Retailers: “Made in USA” Products Are Gaining Momentum
Posted: December 31, 2013
Some retailers are catching on to the increasing demand of American consumers to stock American-made goods. According to a Consumer Reports survey, 78% of Americans would rather buy American-made products than those made overseas.
Over 80% of those questioned said retaining manufacturing jobs and keeping American manufacturing strong in the global economy were very important reasons for buying American. About 60% cited higher quality of American-made items or concern over child labor and other cheap labor abroad.
People are also willing to pay extra for American-made goods. Over 60% said they’d buy American-made apparel and appliances even if they cost 10% more than similar imported items; more than 25% cited they would pay at least 20% more. Market research firm YouGov found that 42% of 1,000 people surveyed think products made in America would be higher quality, and 38% said buying American is important to being patriotic.
Another interesting aspect of U.S-made products was unveiled in a consumer survey done by the Boston Consulting Group—that more than 60% of Chinese respondents said they’d buy American-made versions over the Chinese version, even if it cost more.
At the start of the holiday shopping season, pop-up stores around the country with “Made in USA” products were becoming more and more prevalent, indicating a growing preference for items made in this country.
David Trumbull, a consultant and expert in textiles and U.S. manufacturing, noted that America lost nearly a third of its manufacturing jobs during the past 10 years. While more than 97% of apparel and shoes sold in the U.S. are manufactured overseas, according to the American Apparel & Footwear Association, the tide is slowly turning. “'Made in USA' is a trend we have seen, and it is continuing,” Trumbull says.
Also, wages in China are rising, and shipping goods from Asia is costly and takes a long time, according to the Boston Consulting Group. Natural gas is currently cheap and abundant in the U.S., and robotics advancements enable American factories to produce as much as any line of assembly workers overseas.
Hal Sirkin, a senior partner with the Boston Consulting Group, sees this as a tipping point. “In 2015, that gap between the cost to manufacture in China and deliver to the United States versus the cost to manufacture in the United States will be less than 10 percent,” he says. Sirkin also notes that the hardware category is at the leading edge of this trend. “Seeing more ‘Made in USA’ stuff showing up in hardware stores is a sure sign of ‘reshoring.’”
Wal-Mart is trying to maintain low costs while still providing American-made goods. The store indicates that it is giving its suppliers added incentives that would increase sourcing of American-made products by $50 billion over the next 10 years and create more than 1,600 American jobs.
Apple, General Electric and Brooks Brothers are also experimenting with making more products in the U.S. Lower manufacturing costs and gaining a competitive edge are key components in their strategy. Being able to get merchandise from the design phase into stores within weeks rather than months in order to be “of the moment” is topping this agenda.
In some of the surveys, the majority of shoppers indicated they would prefer to buy American-made food, medicine and personal care items because they believe that U.S. standards of quality and safety are higher and are true motivating factors for purchase.
Made in USA Certified cofounder Adam Reiser says, “People are looking at labels, and they’re NOT buying ‘Made in China.’”
We talk about the collection and gleaning of big data, but here’s an opportunity for retailers to really capitalize on a growing preference by American consumers to buy American-made, and thwart foreign competition.TAGS: retail, retail trends, work in retail, retailers,