Whatever happened to caveat emptor?

Being a consumer used to be a dangerous sport - one entered the market at one's own risk of product failure, rip-offs and dodgy health and safety standards. But according to a new book, caveat emptor - let the buyer beware - is no more. Nowadays, the consumer is king, and claiming compensation for a faulty washing machine has never been easier.

by HBS Working Knowledge
Last Updated: 23 Jul 2013

So what happened? In his new book Consumer Capitalism: politics, product markets and firm strategy in France and Germany, Gunnar Trumbull, professor at the business, government and international economy unit at Harvard Business School, says that affluence accounts for a lot of the change.

As mass consumption spread in the 1960s, consumers became increasingly unprepared to accept faulty products and made a scandal of it when it happened.

The shopping experience also changed radically with the advent of supermarkets. The everyday shop turned into a weekly stock-up, saving time and money. But the friendly sales staff also turned into rows of anonymous products which had to speak for themselves. The government therefore had to step in to ensure better standards in retail.

The US can take credit for most of the early milestones (comparative product tests, consumer rights etc), but most countries jumped on the protection bandwagon, each with their own specificities.

Germany, for instance, has developed extensive comparative product testing, the results of which are widely available to consumers and producers alike. Consumers have therefore developed on eye for quality and solid design, and a taste for improved rather than new products.

In France on the other hand, the government operated a quality filter higher up the chain, allowing customers to choose any product in the knowledge that it would be safe to use. French consumers therefore tend to be more 'daring' in their choices, and favour style and innovation over engineering soundness.

These differences play an important role on the international stage. "The more sophisticated and organised the domestic consumer base becomes, the easier it is to move into high-quality areas of production," says Trumbull, a key consideration for emerging players such as India and China.

Source: Whatever happened to caveat emptor?
Sean Silverthorne
HBS Working Knowledge, Aug 14 2006

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