Consumer Preference Survey Summary

by Audrey Farber

Americans want to buy Made in USA products, and this preference can be an important impetus for bringing U.S. manufacturing back home.

We have reviewed and aggregated consumer surveys of various sizes from ten sources conducted between 2010 and 2013, gleaning insight into the preferences of more than 14,000 consumers from the U.S. as well as key trading partners including France, Germany, and China. We have determined that, among American consumers, there is a decisive preference for and an overall positive perception of American-made goods: 97% have a positive view of goods manufactured in the U.S. (AAM, 2012) Americans on the whole also have a positive opinion of companies that manufacture in the U.S. (91%), believe it is important to manufacture in the U.S., and think the government should take steps to support American manufacturing. (AAM, 2012)

The preference for American-made goods, and the likeliness of purchasing such goods, is centered among older Americans with a notable drop-off among under-30 consumers. Midwesterners and members of rural communities (independent of region) are also more likely than their counterparts in other U.S. regions to prefer American goods. (Gallup 2013, Harris Interactive 2010) Quality, along with jobs and the economy, are the most commonly cited reasons for which Americans prefer American-made goods. (Harris Interactive, Gallup, AAM) Similarly, Americans report supporting American manufacturing out of a belief that manufacturing is important for long-term job growth and economic stability. (AAM 2012)

While their preference is clear, whether or not Americans are actually purchasing American goods is a bit more difficult to determine. Some surveys indicate that under half of American consumers have made an effort to purchase an American-made good in the past few months. (Gallup) However, according to a BCG survey, 80% of American consumers would be willing to pay more for American-made goods—and nearly a quarter of them willing to pay a price premium of at least 10% across all categories of goods surveyed—, and 60% reported having done so in the past month. These numbers are corroborated in a 2013 Gallup poll indicating 64% of American adults would be willing to pay more for a good manufactured in the U.S. versus a comparable good manufactured elsewhere.

Americans report the highest preference for purchasing American goods where concerns about quality, safety, and durability are high: appliances, clothing, furniture, and automobiles ranked highest, and Americans report a willingness to pay extraordinary premiums (upwards of 60%) for American-made baby toys and furniture. (Harris Interactive 2010, BCG 2012) However, when Stanley Furniture tried to reshore a high-end line of baby cribs, their efforts failed due to consumer unwillingness to pay these premiums: While surveys indicate a preference for buying U.S.-made goods, and 76% of Americans report being more likely to buy products labeled Made in USA (PRS), it is more difficult to determine whether or not consumers are actually buying these goods and paying premiums to do so, as highlighted by the Stanley Furniture case. The downfall of consumer preference is that it does not necessarily reflect consumer behavior, and in order to more accurately determine such we need more research into consumer behavior rather than preference. In order to fill in some of these gaps, the Reshoring Initiative has developed a program available to retailers and manufacturers to test actual consumer behavior regarding Made in USA products.

It is not only American consumers who report a willingness to spend more on American goods: 60% of Chinese consumers reported being willing to do so (BCG). However, unlike Chinese consumers’ preference for American-made goods, British consumers (66%, The Guardian), Canadian consumers (CBC), and more than 65% of French and German consumers (BCG) all report preferring their own domestically-produced goods. It thus seems evident that not only do developed countries tend to prefer locally-made goods but there is a measurable quality difference between American- and Chinese-made goods (and, correlatively, British, Canadian, French, and German versus Chinese goods).

American-made goods are similarly attractive to Chinese consumers, and the positive effects of the Made in USA label are comparable for American and Chinese consumers. This shared preference is attributable to the perceived higher quality of American goods as compared to Chinese goods. Further, If indeed they are indeed doing so, this suggests a measurable difference in quality between Chinese and U.S. products. An alternative explanation is suggested by the positive social stigma of purchasing American and luxury goods (Tom Doctoroff, WSJ, 5/18/12), so perhaps even these data, which may spur American producers to try to increase consumer exports to China, ought to be taken with a grain of salt or two.

Manufacturing in the United States for the U.S. market yields corporate benefits including shorter lead times, lower shipping costs, smaller inventories and enhanced innovation. These benefits can be quantified using the Reshoring Initiative’s Total Cost of Ownership (TCO) Estimator. Analysis of TCO user data suggests that about 25% of what is now offshored could be reshored at higher profitability if companies evaluated all relevant costs. Combining these benefits with a positive image of American-made goods and consumers’ willingness to pay more for such goods creates added incentives for manufacturers producing for the U.S. market, to produce in the United States. Many Chinese goods average about 30% lower price ex-works than U.S. goods. The aggregate impact of the cost and risk factors listed above adds about another 20% to the total cost of the Chinese product. If the U.S. consumer will pay a 10% premium or more for the U.S. product, the Chinese price gap is closed on a broad range of products!

The Reshoring Initiative works with manufacturers and retailers to identify and quantify opportunities for reshoring (bringing manufacturing back to the U.S.) or nearshoring (bringing manufacturing back from overseas to Canada or Mexico). We call on: consumers to seek out, request and purchase Made in USA products; retailers to test and report the sales impact of clearly marked, easily found, Made in USA products; and manufacturers to reevaluate total cost and see which products they should bring back now!

1. “Born in the USA OR Coming to America: Harris Poll Finds Buying American Still Valued in Increasingly Global Marketplace.” Harris Poll, March 16, 2013. http://www.harrisinteractive.com/vault/Harris%20Poll%2013%20-%20Buy%20American_3%206%2013.pdf

2. “Patriotism, Jobs Primary Motivations for ‘Buying American.’” Gallup Economy, April 30, 2013. http://www.gallup.com/poll/162110/patriotism-jobs- primary-motivations-buying-american.aspx

3. “National Pride Matters as Three in Five Americans More Likely to Purchase Product When Ad Emphasizes it is "Made in America."” Harris Interactive, October 8, 2010. http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/ctl/ReadCust om%20Default/mid/1508/ArticleId/580/Default.aspx

4. “Alliance for American Manufacturing (AAM) released its survey of voters.” American Alliance for Manufacturing, January 22, 2013. http://americanmanufacturing.org/blog/voters-see-manufacturing-“irreplaceable- core-strong-economy”

5. “U.S. and Chinese Consumers Willing to Pay More for Made in USA Products.” Boston Consulting Group, November 15, 2012. http://www.bcg.com/media/PressReleaseDetails.aspx

6. “That “Made in USA” Label May Be Worth More Than You Think.” Boston Consulting Group, January 2013. https://www.bcgperspectives.com/content/commentary/consumer_products_retail _that_made_in_usa_label_may_be_worth_more_than_you_think/

7. “'Made in the USA' Influences Shoppers.” Perception Research Services International, July 2012. http://www.prsresearch.com/about- prs/announcements/article/made-in-the-usa-influences-shoppers/

8. New York Times/CBS News Poll, January 11-15, 2013. http://graphics8.nytimes.com/packages/pdf/business/20textiles-poll.pdf

9. CBS News Poll archives, 1984-2013, accessible and searchable: http://www.cbsnews.com/stories/2007/10/12/politics/main3362530.shtml

10. Cotton Institute Lifestyle Monitor. 2013. http://lifestylemonitor.cottoninc.com/article-by-topic

11. “Jeep leads list of 25 most ‘patriotic’ brands.” USA Today, survey by Brand Keys. July 2, 2013. http://www.usatoday.com/story/driveon/2013/07/01/most- patriotic-brands-jeep/2481337/, http://brandkeys.com/wp- content/uploads/2013/07/Brand-Keys-Most-Pariotic-Brands-2013-List.pdf

12. “Made in the USA” homechannelnews.com, March 2013 http://www.homechannelnews.com/sites/homechannelnews.com/files/MadeUSA2013 Report_1.pdf

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