Last year I bought a refrigerator from Sears – it was a Kenmore and had excellent reviews on the Sears website. I came home a few weeks ago to find that it wasn’t working. I had a repairman out who inspected the unit and told me that it was leaking freon, and there was nothing he could do. The inside electronics and compressor were made in China, so it was hard to determine where the fault was, but this problem was not uncommon with these types of refrigerators.
I went back to Sears.com and found that the reviews on the site had changed in the past year – they now reflected all of the angry consumers who had similar experiences. Unfortunately it was too late. The product only had a one year warranty (mine crapped out at 18 months). Sears also noted that the refrigerator was discontinued in favor of a new model, which promises to be much better. This will start the review process over again.
Through this experience I realized that the US economy, which is largely dependent on consumer purchases, is suffering from two problems: transparency and marketing.
If I had known the refrigerator would only last 18 months I would have spent more for a higher quality product, and based on the negative reviews that came out over time I am sure that many other people feel the same way. However, information on durability is not available online. The fit and finish of the refrigerator were high quality and early reviews reflected that. Long term durability, which is dependent on other factors like electrical components and machining, is hard to predict until products have been around a long time. And by then the products are discontinued. Normally brands help us to decipher quality, but I have heard similar stories about even high end brands that have cut corners.
A second issue is that there is no reputation system when it comes to parts suppliers that carries forward to the finished product. I am sure the same thing happens to ceiling fans, television sets, cars, laptop computers, medical equipment, and just about everything else we purchase. Because manufacturers launch new models every few years they have no incentive to make products that last a long time. If you are a really clever manufacturer you realize that products only need to work for the period of time in between launching new models, at that point the reviews refresh and you get a clean slate. As I brainstormed for this blog I just realized that manufacturers have been moving to this model for years. This trend is bad for the consumer – it creates a lot more waste, the long term costs of owning products are higher than they would be if products lasted a long time, it creates incentives to outsource manufacturing to low cost/low quality facilities, and of course there is the frustration of owning stuff that breaks.
A third issue is that manufacturers have a marketing problem. When you go to purchase a refrigerator at a big box store it is stacked side by side with 100 similar items. The sales person knows the price and the visible features of the product, all of which you could see for yourself, but he or she doesn’t describe the quality of the welding, circuit boards, and general craftsmanship that would educate a consumer about why they should pay more. As a result, consumers gravitate towards the cheapest products with the best looking finish. If we had basic information about why a product is inferior beneath the surface we might make different buying decisions. Because this information is not available, quality manufacturers tend to get pushed out of business.
The way this gets solved in the long run is that trends in quality retailing need to cross over into electronics and home goods, the same way they crossed over in the grocery world. The US economy needs a “Whole Foods” for electronics and white goods. As more consumers become frustrated with the build quality of electronics I can see a major opportunity for a merchant that will take the time to properly merchandise products and carry only vendors that meet certain quality standards. Some of these products could even sell at a price that would allow them to be manufactured here instead of manufactured abroad. Until then the US economy will continue to have a “made in china” problem and our purchasing will only be skin deep.