Rebuilding and Reshoring: What can consumers do?
Category: Supply Chain • Dec 11, 2020
By Harry Moser, Founder/President, Reshoring Initiative®
Studies show that Americans prefer U.S.-made products and that this preference can help bring manufacturing back home. The Reshoring Initiative has aggregated consumer surveys from ten sources, gleaning insight into the preferences of more than 14,000 U.S. consumers. Findings show a decisive preference for U.S.-made goods: 97% have a favorable view of goods manufactured in the United States. Americans also have a positive opinion of companies that manufacture in the United States: 91% believe it is important to manufacture in the United States and think the government should take steps to support American manufacturing.
Unstable conditions shift consumer sentiment and global supply chains
Consumers turned to online purchases during the COVID-19 pandemic, and businesses reshored to meet critical medical needs and mitigate risk and future volatility. Americans became keenly aware of our overdependence on imports, especially from China. U.S. consumers are less willing to buy items made in China due to the pandemic (40%). A study released in June 2020 found that about 50% of consumers agreed/strongly agreed that U.S. retailers should cut back on sourcing from China.
According to a McLaughlin & Associates study, 75% of Americans felt that the United States should end its dependence on China for medical imports, including PPE and pharmaceuticals. A recent Harris poll revealed that Americans thought companies should “pull back from manufacturing in China” (71%) and are in favor of tough U.S.-China trade policies (69%).
While their preference is clear, whether Americans actively seek American goods is more difficult to determine. Some surveys indicate that less than half of consumers made an effort to buy U.S.-made goods (Gallup). So, how can consumers turn their preferences into more purchases to help rebuild the U.S. economy?
Strength of ‘made-in-USA’ consumer spending
According to insights from Deloitte’s August 2020 State of the Consumer Tracker, consumer spending is down due to two key consumer woes: concerns about contracting the COVID-19 virus are restricting their movements and thereby their spending, and rising unemployment and job loss worries.
But consumer choices have a real impact on the U.S. economy. As the economy begins to recover, buying U.S. goods can reduce income inequality, lower unemployment, and help to balance our trade and budget deficits.
Convenience, efficiency, and the environment
The positive impact on environment, jobs, convenience and efficiency, and quality are four benefits of local production. The shift to faster delivery for today’s online e-commerce shopper, the demand for customization, and customer responsiveness are trends that promote U.S.-made goods. Manufacturing in proximity to the market served, i.e. reshoring, addresses all these demands more efficiently.
Ten years ago, older Americans were the most willing to buy American, based on concerns for the country. Now youth is starting to lead, based on environmental and social concerns.
What motivates your purchases?
Consumers who became aware of our over-dependence on imports during the pandemic should reconsider the factors that influence their purchases. Risky over-dependence on global supply chains during the COVID-19 pandemic revealed the vulnerabilities of 40 years of hollowing-out of U.S. manufacturing. For most products, the United States should produce at least 50% of what it consumes. Consumers are the biggest part of that equation. More U.S.-made purchases will allow growth in productivity and manufacturing employment, a multiplier for the domestic economy.Consumers should consider the key influences that motivate their buying decisions and align their purchases to support those benefits. Environmentally concerned buyers should consider the country of origin’s environmental standards and transport distance to the U.S. market. Socially conscious buyers should consider fair wages, working conditions, slave labor, local jobs, and community impact. The U.S. investments needed in education, the environment, and infrastructure will all be more feasible with 5 million more manufacturing jobs and as many or more multiplier effect jobs.
Our proposal for consumers
Despite being a “services” economy, about one-third of consumer spending is for goods[i]. Less than half of the goods consumed, excluding food, are produced in the United States. To increase your consumption of U.S. goods, develop a buying strategy. For example:
- If the product you are looking at is made offshore, especially in China:
- If you do not need it, do not buy it. Save the money until you can at least buy a U.S. product you do not need. Buying fewer U.S. products at slightly higher prices should be more satisfying than buying more unneeded imports. Compare your momentary satisfaction from shopping with the satisfaction another American gets from having a job.
- If you really do need it now, apply some rules, e.g.:
- If the price is above $100, search the Internet for a U.S. product. Often you can find online U.S. products for the price of in-store imports. Liberty Tabletop, winner of the 2019 National Metalworking Reshoring Award and sole domestic stainless flatware producer, has had great success with this direct-to-consumer (D2C) ecommerce business model.
- If price is $26 to $100, ask Customer Service for a U.S. equivalent. At worst, they will hear you. Then buy.
- If the price is less than $25, search the nearby shelves for U.S. If you find nothing, buy the product.
- If you have flexibility about what to buy, e.g. a gift, shift to a U.S. product category or service. Maybe a baseball bat instead of a glove.
- Decide how much more you will pay for U.S. Many surveys show up to half of consumers say they will pay 10% more. Ten percent is enough price premium to bring back more than 10% of imports and millions of jobs.
- Demand that online retailers display country of origin on all posted products and a filter to find only U.S. products.
- Ask all brick and mortar retailers to have a kiosk or app where you can find in-stock U.S. products and their shelf locations.
- Shop Made-in-USA online retailers such as the Made in America Movement and MadeinAmerica.org.
- Tell your friends about great U.S. products you have purchased.
- Finally, spend less and save more. U.S. consumers spend dramatically more than those in other developed countries, resulting in low personal savings, bigger garbage piles/pollution, and bigger trade deficits. The current crisis has shown the value of having savings as opposed to more unneeded consumer goods.
Consumer wake-up call
We call on consumers to consider, seek, request, and buy U.S.-made products whenever possible. Let’s work together to make the United States more self-sufficient. Send us information on products you cannot find made domestically. We will work with companies, state economic developers, and the Department of Commerce to fill the gaps. Contact Harry Moser at email@example.com
To read more in Harry Moser's Rebuilding & Reshoring series, click here.