Perceived cost barriers to improving safety are unfounded
The research findings present an opportunity for businesses to turn consumers’ increasing product safety demand into a business advantage. TÜV SÜD Safety Gauge reveals that consumers are becoming more discerning and placing increasing value on the importance of product safety. Businesses, on the other hand, continue to place safety at the top of their agenda but expect increasing safety measures to come with costs.
The two sets of perceptions reveal how cost barriers to improving product safety can be overcome. Contrary to businesses' perception, investing in enhanced product safety can improve consumer well-being and drive commercial success at the same time.
Safety as a compelling business case
There is a compelling business case for increasing safety driven by escalating consumer demand, price premium for safer products and substantial potential losses from product recalls. The increase in production costs, estimated by businesses to be on average 19%, to elevate product safety levels to that of the highest in the industry, can potentially be offset by:
The price premium averaging 16% over regular selling price which consumers are willing to pay for products that achieve safety standards that are above and beyond what is required as mandatory by the government and verified by a credible independent third-party.
Avoiding the potential loss of an average of 9% in revenue arising from product recalls.
Measures to improve safety levels
The research also highlights three main areas which the industry can work on to improve safety levels:
Improving traceability of entire supply chain
The modern day supply chain is extremely complicated. Unlike 15 years ago, corporations seek efficiencies not only through direct suppliers but suppliers’ suppliers and often even further down the supply chain. This has made supply chain management even more challenging. This corresponds to the finding that less than half of companies (43%) surveyed are able to trace every component of their product throughout the supply chain. This can be achieved through a comprehensive testing, inspection and audit program throughout the supply chain.
Leveraging value of third-party testing
There is also a disconnect between the value of third-party product testing and certification between consumers and businesses. Although only half of the businesses surveyed(50%) use third-party testing and certification services, 90% of consumers would like to see products being independently tested before being launched in the market. Companies can work with independent third parties like TÜV SÜD to ensure that their products are able to fulfil consumers' demand for safety and demonstrate their commitment to safety with the TÜV SÜD certification marks.
Focusing on safety from the design and development stage of products
Only 47% of businesses are placing a focus on safety during the design and development stage of products. Making safety a consideration factor from the design stage is an effective measure to ensure that products comply with safety requirements early and minimize costs needed to redesign products during later stages of development.