Hogwash
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\"iStock_000000315739_ExtraSmall\"And if You Believe It, I “Have a Bridge to Sell You.”

Hogwash is a great word, as I was reminded by my colleague, Judy Russell, CEO of consultancy Markethink. First used in the 15th Century, it referred to swill, slop, nonsense and balderdash. And it’s particularly appropriate when describing the findings of a recent study conducted by none other than the Boston Consulting Group, as well an earlier survey conducted by NPD in the fall of last year.

Up front and to be clear, I am not attaching the “hogwash” description to the methodology, and how the research was conducted by these two revered institutions; and not even the accuracy of the findings. I am describing as “hogwash” what the findings indicate would be consumer behavior in making a purchasing decision based on patriotism and a “made in America” label over price.

In the NPD study, roughly 76% of the consumers surveyed replied that it is extremely or somewhat important to buy apparel made in the U.S., and about 70% were willing to pay variously higher prices. While in the BCG survey, 80% said “they preferred U.S. goods, and that they would pay more for said goods.”

Well, if you believe what these consumers say they would do, then I do “have a bridge to sell you.”

Déjà Vu All Over Again

\”Those who cannot remember the past are condemned to repeat it\” (Philosopher George Santayana, not Yogi Berra). I’m referring to the same type of hogwash findings from research that was conducted in the 1970s, that consumers would favor apparel made in the U.S., and indeed, would pay a premium for it. Ironically, the goal of that research and its subsequent consumer marketing campaign was to save the industry from moving offshore. The findings from the current research leads us to believe we can get it back.

In the ‘70s there were enough major industry players who believed the hogwash findings and the consumers’ apparent intentions, that they launched the “Crafted With Pride in the USA” consumer marketing and advertising campaign. The objective, of course, was to get consumers to buy apparel made in the U.S., thus keeping our manufacturing base.

Hundreds of millions of dollars and about four years into the campaign, it was deemed an utter failure, and the “big sucking sound” continued, primarily from Asia.

Most of the retailers during that period were reluctant to sign on in support of the program. Why? Ha ha! Hey, forget the research findings, the consumer’s buck stops at their cash registers. And, they were smart enough to know that if their blue jeans had a ”Crafted With Pride in the USA” label, but sold for five bucks more than their competitor’s “made in China” jeans, then no “bucks” would be stopping at their registers.

So, bye-bye manufacturing.

Are We Condemned to Repeat History?

If millions were lost and the campaign to save the manufacturing industry failed in the ‘70s, based on the belief that consumers would change their behavior due to a patriotic “call to country” over getting more for less, what is it that makes this time any different? And, that was to save much of what was here. What does one think the cost might be to get back even part of what is gone?

Are we to believe consumers are more patriotic today, and have the mental bandwidth to connect the economic dots that promise more jobs if they spend a little extra for “made in America?” Or, as evidenced by their obsessive compulsion for lower and lower prices, tied to their own shrinking wallets, when confronted with giving up one item on their shopping list to pay a little more for some ill-defined altruistic American future, what do you think our obsessively consumptive consumer is going to do?

If I have to tell you what they will do, then you’ve been living in another galaxy.

Come on! We all say we are going to do something and then we do the opposite. And, why wouldn’t any “red blooded” (or “blue blooded”) American consumer say they would favor American-made goods and pay more for it? After all, that answer doesn’t cost them a penny and they can feel patriotic to boot.

So, are these research guys and the media drumming up, as usual, sensationalism? Like this is the next mega-revelation about consumer behavior, a trend? Wow, consumers are all of a sudden concerned with our economy? Sorry, they do not know, and most do not care, what “the economy” is all about. The “economy” to them is their wallet. I’m not arrogant, just realistic.

And, on the supply side, those retailers and brands, who over the past 50 years have successfully built more stores and stuff than the planet will ever need, and who are insanely slashing prices to steal just one more smidgen of a share of market that isn’t growing, are they going to all of a sudden build costs back into their products, based on what some consumers say they will do? If you think so, I’ve got another bridge for you. Oh, and don’t forget the likelihood of a minimum wage increase. As my colleague Judy Russell said, “POTUS wants to raise the minimum wage to nine bucks? Calculate what that will do to a pair of Lee jeans.”

So, doing the math is a no-brainer on the supply side.

Pockets of Possibility or PR Stunts

Anyway, these surveys play into the current political and economic narrative, and provide the blah blah blah for the media who do so well at sensationalizing everything (myself included). Furthermore, “hogwash” provides loud opinions on both sides, which I guess is a good thing.

But, the reality is that brands and retailers who act on the belief that these consumers are going to do what they say they would do, are jumping off of a cliff, in my opinion.

Yes, there are luxury and designer segments whose customers can afford to pay higher prices for goods made in the U.S. And there are other brands and product niches already “in-sourcing” as its being called. But, all of those comprise a just tiny sliver of the total.

And, by the way, all of the press that Walmart has been getting, beating their drum about a commitment to source $50 billion worth of goods in the U.S. over the next ten years is just that: “beating a drum.” One wonders how much of a PR stunt this might have been. $50 billion over ten years is $5 billion a year. They sell roughly $400 billion worth of goods per year. And, the $5 billion they commit to U.S. sourcing will be spread over apparel, home, games, pet supplies and high-end electronics.

Doesn’t sound like a game-changer to me. And, the minute their core consumers reject even a penny added on to Walmart\’s promise of “lowest price always,” the behemoth from Bentonville will be beating it back to Bangladesh as fast as you can say “out-sourcing.”

Patriotism and a More Robust Economy

As cynical as some may find this article, I contend it is realistic. It would be great if consumers were really imbued with a patriotic emotion, enough so that they would sacrifice getting more for less so the U.S. could bring back and expand its manufacturing base, thus creating more jobs and regaining a robust and growing economy. I say it’s not “in the cards.”

What do you think?

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