U.S. businesses that make their products domestically and promote them as "Made in the USA" have a better chance at boosting sales, new research shows.
A study by Perception Research Services (PRS) discovered that shoppers are motivated by "Made in the USA" claims on packaging, with most shoppers saying that they are more likely to purchase a product after noticing a "Made in the USA" label on it.
The research found that the primary reason shoppers are more likely to purchase "Made in the USA" products is to help the economy.
While many companies outsource manufacturing overseas to help lower costs, research shows U.S. shoppers are willing to pay more for products made stateside. Researchers point to a past study from the Boston Consulting Group's (BCG) Center for Consumer and Customer Insight that found that when considering similar products made in the United States versus China, Americans are willing to pay up to 60 percent more, on average, for U.S.-made products.
The PRS study discovered that the types of products that the majority of consumers would prefer to purchase if they're made in the United States include food, medicine and personal-care items. Researchers say that finding suggests that quality and safety may be the true motivating factors behind these purchase decisions.
"Manufacturers of American-made products would do well to clearly state this fact, as it is a meaningful point of difference," said Jonathan Asher, executive vice president at PRS. "This is certainly true if all else is equal and, in some cases, could provide a sufficient level of quality assurance to justify a higher price."
While baby boomers have long been supporters of "Made in America" products, millennials are now getting into the act. According to the BCG research, U.S. millennials are receptive to this type of marketing and are more likely than nonmillennials to purchase items associated with a particular cause, such as "Made in America."
"As millennials enter their peak purchasing-power years, it will benefit manufacturers to provide more 'Made in the USA' products, and overtly tout this claim, as this group is likely to be increasingly interested in buying American," Asher said.
The PRS study was based on surveys of more than 1,500 U.S. consumers age 18 and older.