Consumers are willing to pay a 15 percent premium for guaranteed safer products, according to a new study by TÜV SÜD America, a subsidiary of TÜV SÜD AG, a leading provider of testing, inspection and certification services. The 2012 TÜV SÜD Safety Gauge global study also says that safety is more important to consumers than brands, and product safety certification drives purchase decisions.
“Consumers, particularly families, are more and more discerning, and care more about safety than anybody thought,” notes Ian Nicol, president & CEO, TÜV SÜD America. According to the research, consumers consider product safety one of the most important criteria when purchasing a product, above brand or the product origin. Nearly all (72%) say they are willing to pay an average premium of 15 percent for products that achieve exemplary safety standards. Furthermore, 80 percent of consumers say safety certifications influence their preference for a familiar brand and 60 percent of consumers look for safety certifications when encountering an unknown brand.
The company investment required to achieve higher safety standards is outweighed by the economic benefits associated with fewer product recalls and increased sales. Product recalls cost approximately 9.5 percent of revenues, according to the study.
“Manufacturers, distributors and retailers in the United States have an opportunity to not only enhance consumer wellbeing but drive commercial success through a more systematic approach to product safety. Contrary to popular belief, significant safety improvements can be made with limited resources, by working together with suppliers,” Nicols says, to increase visibility to standardize safety requirements throughout the supply chain.
For example, globally, the research highlighted that over half (56%) of manufacturers, distributors and retailers are unable to trace components throughout their supply chain, and 47% cannot guarantee that their entire supply chain meets product safety requirements.
The research also highlights how clear product safety labels and third party testing can drive product sales. Some 87 percent of respondents say they are more likely to buy products with safety information clearly stated on its packaging, and 84 percent agree that third-party safety testing of products is important before they are commercialized.
The study, which evaluated food, consumer electronics and children’s products, found the food industry is considered the safest sector. For food, price and freshness were most important, but hygiene is more important than brand or country of origin. Of note, Mexico ranked second to last from the list of countries from which products are safest, ahead China but behind India or South Asia. Foods from Canada, Brazil and Northern Europe were considered the safest.
Concerns about consumer electronics are increasing, as 47 percent of respondents reported problems within the past five years. Product safety labeling drives product safety perceptions, slightly more than product design or brand. Some 78 percent of consumers are aware of at least one safety label, but about 25 percent don’t understand current product safety labels for consumer electronics.
Some 51 percent of respondents say they experience safety issues with children’s products in the past five years. The products of most concern are toys (75%), baby car seats (60%), cribs (56%) and baby bottles (36%). Although purchasing decisions are abased primarily upon price and performance, safety is considered more important than brand or country of origin. Some 78 percent of consumers look for safety certifications when considering unknown brands. For known brands, 93 percent of respondents report that safety certifications reinforce their brand preferences.
The TÜV SÜD 2012 Safety Gauge surveyed 5,268 consumers and 520 businesses in the United States, the United Kingdom, China, India and Japan between June and July 2012. These markets represent almost half of the worldwide Gross Domestic Product. For the US, more than 1,000 consumers and 100-management level employees were surveyed in manufactures, distributors and retailers that operate in the food and beverage, children’s products and consumer electronics industries.