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New Study by TÜV SÜD Highlights Product Safety as a Key Determinant for Consumer Purchase above Brand.
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PRODUCT SAFETY IN NUMBERS
THE ECONOMICS OF PRODUCT SAFETY
STATE OF SAFETY
www.tuv-sud.com/safetygauge | #safetygauge
SAFETY ABOVE BRAND IN PURCHASING CRITERIA
0 1 2 3 4 5 6
2.8
3.0
3.2
3.6
4.6
5.3
Price
Performance
Functionality
Safety
Well-known brand
Safety labels
1.
2.
3.
4.
5.
6.
CHILDREN’S PRODUCTS
63%of consumers say product safety is very important
to them now
61 per cent of businesses indicate that safety standards of their products vary from market-to-market depending on
import requirements
56 per cent of organisations are unable to trace all components in their products throughout their supply chain
Just 53 per cent of businesses can guarantee that their entire supply chain
meets product safety requirements
2007
2012
47 per cent of businesses believe product safety is a serious issue
in their industry
47% 41% 70%53%56%61%
Companies estimate they will need to increase production costs by 19 per cent to achieve the highest safety standards available
PRODUCTION COSTS
SAFETY AN ISSUE STANDARDS IMPROVINGMEETING REQUIREMENTSLIMITED TRACEABILITYVARYING STANDARDS
Companies have conducted an average of 9.8 product recalls in the last five years9.8
FREQUENCY OF PRODUCT RECALLS
9%Product recalls in the last five years have cost companies on average 9 per cent of revenue
COST OF PRODUCT RECALLS
BUSINESS EXPENSERISING CONSUMER DEMAND
£$
19%
The Safety Gauge is based on independent global research commissioned by TÜV SÜD to investigate consumer and business attitudes towards product safety. The research was undertaken in the United States, the United Kingdom, China, India and Japan – markets that represent almost half (47 per cent) of worldwide Gross Domestic Product. It included surveys of more than 5,000 consumers and 500 management-level employees in manufacturers, distributors and retailers that operate in the food and beverage, children’s products and consumer electronics industries.
AVERAGE ORDER OF PRIORITIES
0 1 2 3 4 5 6
2.1
2.5
3.2
4.2
4.9
5.2
Price
Freshness
Food Safety (hygiene)
Well-known brand
Safety labels
Product origin
1.
2.
3.
4.
5.
6.
FOOD PRODUCTS
AVERAGE ORDER OF PRIORITIES
0 1 2 3 4 5 6
2.5
2.8
3.3
4.2
4.8
5.5
Price
Performance
Functionality
Safety
Energy efficiency
Well-known brand
1.
2.
3.
4.
5.
6.
CONSUMER ELECTRONICS
AVERAGE ORDER OF PRIORITIES
TÜV SÜD SAFETY GAUGE 2013
Independent global research suggests rising consumer demand and damaging annual recall costs mean investing in product safety can not only improve consumer wellbeing but drive commercial success.
Ishan Palit Chief Executive Officer, TÜV SÜD Product Service Division
‘‘ ‘‘Companies are overestimating the cost required to achieve exemplary safety standards
70 per cent of businesses believe companies now exceed government
regulations, up from 41 per cent in 2007.
77 per cent of consumers are willing to pay an average
premium of 16 per cent over standard prices for products that
achieve exemplary safety standards
16%Premium
