How we made it here: American production narratives and their implications for brands
The past few years have seen a resurgence in American production as a result of—in no equal parts—the timing of the economic downturn, the American heritage movement that swept across categories, and changing production conditions at home and abroad. The cultural emphasis on investing in high-quality goods is closely tied to product quality, which can in turn become associated with brands as well, thus making production an important and potentially valuable tool for marketers. But this begs the question: how does a brand become synonymous with quality by telling a story of production—especially in a consumer environment that highly values yet closely scrutinizes such narratives?
This paper uses the context of the current reshoring trend to explore what happens when companies bring production home from overseas, the authenticity of the “Made in America” credential, and when and how these practices can add value to a brand—as well as when they can hurt a reputation rather than help it.
One of the defining features of the current American service economy—and an integral factor that enabled its evolution—is the shift to overseas production, which distinguishes it from the industrial era. Cheap labor abroad, lax foreign labor and trade laws, and a host of other factors made foreign production both practical and profitable, but shifts in global economies have reversed many of those trends. Now, rising labor costs and import taxes are making domestic production considerably more appealing. Add to that a cultural affinity for rousing American pride and the prospect becomes even more enticing.
Today, reshoring is becoming a dominant trend for a host of American companies. Defined as the process of bringing offshored production back from overseas, reshoring offers a number of benefits to domestic companies.1 As labor laws tighten in traditionally slack countries, the costs and benefits of paying workers in China vs. America swap, sometimes quite drastically. Changes in import and export tariffs and fluctuating transportation costs present another significant consideration for companies—and the scales are tipping in favor of cutting these costs. What’s more, as the purchasing power of the expanding middle classes in China and other foreign countries increases competition and demand, American companies feel even more pressure to rethink their production practices. The trend applies across product categories (though, admittedly, apparel and textiles have seen the most marked change).
The shift to domestic production is driven not just by the necessity of costs but by the prospect of a host of benefits as well. Proximity to production centers alone offers companies greater oversight and better insight into their supply chain, not to mention a shorter supply chain. That means American companies producing at home have more control and flexibility to respond to market changes and ever-shifting consumer demands. Combined with the benefits for U.S. GDP, these offer an abundance of marketable benefits for American companies.