The Future For Consumer Information Systems

ABSTRACT - The consumer product information system of a given nation consists of a certain mix of commercial, personal and independent information sources and flows. The future is likely to see strategic planning involved in the development of such systems. An attempt is made to present such a plan, interweaving elements of diagnosis, prognosis (futurology) and programmatics.

Citation:

Hans B. Thorelli (1980) ,"The Future For Consumer Information Systems", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 227-232.

Advances in Consumer Research Volume 7, 1980     Pages 227-232

THE FUTURE FOR CONSUMER INFORMATION SYSTEMS

Hans B. Thorelli, Indiana University

INFORMED CONSUMERS ARE PROTECTED CONSUMERS--MORE THAN THAT, THEY ARE LIBERATED CONSUMERS

ABSTRACT -

The consumer product information system of a given nation consists of a certain mix of commercial, personal and independent information sources and flows. The future is likely to see strategic planning involved in the development of such systems. An attempt is made to present such a plan, interweaving elements of diagnosis, prognosis (futurology) and programmatics.

INTRODUCTION

Consumer information systems constitute a vital area of consumer policy, private and public. Conceptually, if not always practically, such systems also have a vital role to play in any policy aimed at maintaining and strengthening the open market economy. The mission here is to retain (or create) workable market transparency in an era of increasing product complexity and proliferation and consequent consumer information gap. [This paper builds upon the last chapter of Hans B. Thorelli and Sarah V. Thorelli, Consumer Information Systems and Consumer Policy (Cambridge, Mass.: Ballinger, 1977), the last volume in a trilogy also comprising Hans B. Thorelli, Helmut Becker and Jack Engledow, The Information Seekers - An International Study of Consumer Information and Advertising Image (Cambridge, Mass.: Ballinger, 1975) and Hans B. Thorelli and Sarah V. Thorelli, Consumer Information Handbook: Europe and North America (New York: Praeger, 1974). For a detailed analysis of the existing consumer information gap, see Ch. 1 of the first mentioned work.]

Our concern is strategic planning for the consumer information systems of the future. After a brief diagnosis of the present, more attention is given to forecasting and, finally, to programmatics. The latter discussion is based on a set of values capsuled in the epigraph of the essay. Our time horizon may be anywhere from five years to the end of this century.

THE PRESENT CONSUMER INFORMATION SYSTEM: A BRIEF DIAGNOSIS

All the sources of information about market offerings available to consumers, as well as the actual flows of such information, constitute the elements of what we shall call the consumer information system (CIS). Sources are generally divided into commercial, personal, and independent. Of the many commercial sources (including owner's manuals, warranties, fairs, demonstrations, etc.) advertising is by far the most important. Although many would say that the subjective (persuasive) component of advertising is too prominent, it is nevertheless probably true that due to its enormous volume advertising constitutes by far the most important single source of objective information about products. Nevertheless, research has demonstrated that advertising falls far short of satisfying those savvy consumers in Western industrial democracies whom we have identified as the Information Seekers (IS) (Thorelli, Becker, Engledow 1975). We also know that consumers in most of these countries consider misleading advertising as the single most objectionable feature of the marketplace.

Personal information sources include our own past experience of market offerings, personal examination of them, and advice by relatives, friends, neighbors and other individual consumers. Independent consumer information programs (hereafter CI programs) is the third major set of product information sources. CI programs have no direct commercial interest in the promotion of the offerings about which they provide consumer information.

CI programs are of course less well known than commercial and personal information sources. Many of these programs are narrow-scope, in that they relate only to a single characteristic (energy consumption, wool contents) or only to a single product or related group of products (life-vest certification, food nutrition labels). The great problem with such programs is that their proliferation tends to add to the "noise" characteristic of Western cultures, thereby tending to enhance rather than to reduce consumer confusion and frustration. Of much greater principal (and, we believe, in the future also practical) interest are multi-product, multi-characteristics programs. Currently, there are some fifty broad-spectrum CI programs in the twenty-nation North Atlantic community (Thorelli and Thorelli 1974 and 1977). As all such programs are based on the testing of products and services our collective term for them is The Testmakers. Sponsorship of such programs may be quite diverse: consumer groups (Association des Consommateurs in Belgium, Consumers Union in the U.S.), government (Stiftung Warentest in Germany, Institut National de la Consommation in France) or pluralist (DVN -- the Danish informative labeling institute, Association Frantaise de l'Etiquetage d'Information). At present, comparative testing (CT) programs as run by the four first-named organizations dominate the field, followed by informative labeling (IL) programs as illustrated by DVN and AFEI.

Less attention has been given to quality certification (QC) programs. The pioneering group in this area is QualitT France. AFNOR, the French standards organization, also has a quality marking scheme, with its NF symbol, as does the British Standards Institute with its Kitemark. In its pure form a QC program involves the marking of products with a symbol (such as a star), indicating that products thus marked have been tested and found equal to or better than a certain minimum standard or threshold defined by the certifying organization. Clearly, this represents a stark simplification of information dissemination as compared to CT reports (IL is in a middle position in this regard). Yet there are many indications there is a need for simplified point-of-purchase information.

We note in passing that almost by definition voluntary IL and QC programs require the cooperation of industry for their success. Another passing remark of great practical significance is that CI programs themselves must be given large-scale advertising and promotion in order to be successful.

The CIS of any given country, then, consists of a certain "mix" of commercial, personal and independent information sources and flows. It would carry us too far here to inquire into the determinants of the local mix in any given environment. We may merely observe that at the present time there is very little effort made anywhere in the world in the direction of conscious coordination of the elements of the local CIS.

FUTUROLOGY

The view of the future environment relevant to CIS to emerge here is based in part upon analytical material from our own research, in part derived from other sources. In several instances we are projecting and evaluating trends already at work. However, many pieces of the puzzle are necessarily based on mere assumptions, whose credibility must be left to the reader to evaluate. At least we have tried to make them explicit.

Environmental Trends and CI Aspiration Levels

Open market economy.  This essay focuses on industrialized countries with open market societies. In communist economies the consumer has a hard time making his voice heard, and choice is drastically limited. Few if any of the less developed countries have well-behaved open market systems, and the situation of consumers in these nations, too, is quite different.

There can be little doubt that there is a global leftward trend, in the sense of increased government coordination and regulation of the economy. Even so, one seems fairly safe in predicting that most industrial nations will continue to be based on open market systems with local modifications. Economic progress will continue in these nations, though resource constraints may force a slower rate of growth, which may also result from a decline of the old work ethic. Contrary to the "zero growth" gospel, Mr. Average is still interested in a higher standard of living.

Consumers, values and life styles.  With increasing affluence and growing emphasis on self-actualization and "personalismo" will follow greater differentiation in life styles. Differences in consumption patterns will remain an important means of expressing individualization. The psycho-social characteristics of products will not diminish in significance relative to the functional ones as a greater part of all spending becomes discretionary.

Everyone will place an increasing premium on time -- we shall have more and more "harried consumers." Even those of us with a conservationist or nonmaterialist bent will come to realize the importance of good CI systems precisely as means of resource conservation (the right purchase for the right purpose) and of minimizing input of personal time on those purchases which even the most frugal nonmaterialist must make.

More Information Seekers, higher CI aspiration levels.  The proportion of Information Seekers (IS) in a society is closely related to levels of education and income, both of which will continue to rise. Possibly of even greater significance will be the emergence of consumer education as a major social influence. But many aspects of "consumer civics" will also be broadcast on a scale hitherto unknown by consumer advice bureaus, voluntary consumer groups, business and its trade associations, by government agencies and by the media. The intensification of consumer education will greatly enhance information-consciousness, as more citizens become aware of what intelligent decision-making is all about.

Marketplace changes.  The most critical aspects of the emerging marketplace are the continuing proliferation of products and brands and the ascending complexity of the average product. Pre-sales service will be an important new concept, comprising product information, information on warranty and on what the customer may expect in terms of after-sales service as well as access to owner's manuals and assembly instructions before purchase.

The prime characteristic of post-industrial society is that the service trades are outgrowing physical production. To meet the demands of the times CI programs will have to come to grips with how to evaluate services, the local and personal nature of many of these trades notwithstanding. A similar challenge is confronting us in the rapidly growing area of institutionalized or "collectivized'' consumption, such as in the health, postal, transportation and public utilities areas.

Developments in retailing may actually be rather favorable from a consumer information viewpoint. In the vital food area the trend in leading countries is clearly towards the extremes of hypermarchTs and neighborhood convenience stores. A large part of the superstore assortment will be small appliances, housewares and other nongrocery items. By and large, the convenience store will carry strictly routine items for which the need for CI (beyond conventional packaged goods labels) is fairly limited. A major function of the superstore, on the other hand, is precisely to permit choice based on in-store comparative shopping. This is vastly facilitated by the large sales volume, which permits the store to carry a great number of brands and to make use of such devices as unit pricing, open dating, consumer corners, etc., at surprisingly low margin cost.

Consumerism.  "Consumers' liberation" will gain full recognition as a movement of urgency similar to women's liberation and ethnic-group liberation in the civilized part of the world. The ultimate driving forces will remain the tension between consumer aspirations and the capabilities of the economy to satisfy them, as well as the Consumer Information Gap characteristic of affluent economies. Sweden and the United States are likely to remain the precursor nations for the foreseeable future, though there is no reason to believe that their approaches to consumer policy will always be the same (Thorelli and Thorelli 1977, Ch. 7).

Future of Commercial, Personal and Independent Information Sources

The current product information system is dominated by sellers. No one could seriously question the legitimacy of advertising and sales promotion in an open market economy. Nor is there much doubt that advertising in various forms will remain the most important single source of product information in such economies. Personal experience -- be it our own or that of our friends -- seems likely to continue its relative demise, assuming that the pace of change and proliferation will remain brisk. It is important to note, however that rising standards of education will make everyone both more information-conscious and more capable of evaluating data, regardless of source.

The future of CI programs will be bright. Their core audience of Information Seekers will grow. Their natural advantage -- saving the consumer time in comparative shopping -- will be increasingly important. The need for greater transparency in the marketplace will be recognized in ever wider circles. As average consumers become more information-minded, and as IS become more harried, simplified, point-of-purchase oriented CI programs will be especially vital. If CI programs can be given a local anchorage (see below), they may even supersede commercial and personal information sources as the most important element in the product information system at the community level as regards such vital matters as local prices and availability of offerings, the after-sales service of various dealers, etc.

We think the media will become more interested in product information. There will be market overviews (based on producer specifications) and independent product reviews in the daily press, as we already find them in some hobby magazines. In affluent countries where the daily and/or specialized press fails to seize this kind of opportunity to serve consumers, CI groups will themselves fill the void. Handyman Which?, Holiday Which? and Money Which?, published by Consumers' Association in Britain, and specialty issues produced by several continental CT programs, demonstrate that this is no idle talk.

Technology Assessment. Computerized CI Utility. Localized CI.

We need only think of the role of TV advertising in countries in which sellers are free to use this medium to realize that technology impacts the product information system. The makings of a technological revolution in the CI area are already on hand; the problems in harnessing these technical advancements are primarily economic and institutional.

Saving time by buying from the home will be greatly facilitated by such developments as the picture-phone and by two-way cable TV. Sales presentations may also be made on videocassettes, using the TV set as screen. It will soon be economical for individual households to be linked to large central computer facilities by means of input-output terminals attached to their telephone or TV. Most of these developments also provide new opportunities for the consumer to "talk back" to sellers in market surveys, product tests, and satisfaction studies. All of these communications technology has tremendous potential for the creation of new types of CI programs. From a CI point of view, however, even more important is the capability of large computers to store, and instantly retrieve, astronomical quantities of data.

We predict that the next breakthrough in CI programs will be the computerized CI utility. Independently of each other, this grand vision was conceived by Consumers' Association of Canada (CAC) and Sweden's VDN in 1968. Large-scale experimentation is currently going' on both in Britain and France.

We confidently foresee a bright future for a properly conceived computerized CI utility as a supplement to existing programs due to some powerful inherent advantages. The greatest of these is the dialog feature, which literally makes possible information -- and advice, if so desired -- tailored to the personal needs and preferences of the individual consumer. Even the exploratory Consumer Enquirer Program module developed at Indiana University a decade ago (Thorelli and Thorelli 1977, App. F) demonstrates two other important advantages. It incorporates basic consumer education about the exemplary product involved (tape recorders), not merely brand comparisons. The consumer who already has sufficient background knowledge can simply bypass the educational routines. The program also carries data about local availability of various brands of tape recorders and corresponding service facilities in Bloomington, Indiana, thus combining education and product information with highly desirable local data. Fending the everyday availability of home computer terminals and similar communications devices, access to a CI utility might be arranged by calling an intermediary operator at a time-sharing terminal from any telephone.

Obviously there are also certain weaknesses in the idea. At present there is no easy way for the computer to arrange an actual viewing of the product. The logic of computers is also to focus on one characteristic (buying criterion) of the offering after another in staccato fashion, leading the prospect down an orderly decision path. However, in this way the consumer may lose sight of the forest for the trees. Like so many other phenomena, a product has Gestalt, that is, it may appear different when viewed as a whole from the impression gained by examination characteristic by characteristic. Care must also be taken to achieve a distinct separation between factual information and buying recommendations.

One may wonder why we do not already have a computerized CI utility system. There are at least two good reasons. First, no data bank can be any better than the information which is fed into it. Even assuming the willingness of The Testmakers to cooperate, it is a formidable effort to prepare all their information in a format suitable to the computer, not to speak of attendant programming of education and dialog routines for all products involved. It is also a fact that for hundreds of products the requisite data do not yet exist. Here one would have to make do with market overviews based on manufacturer catalogs pending neutral testing data. It will also be a very big -- and costly -- job to keep the information up to date. There would be some scale economies, in that product information would have national -- in some markets international --validity. Yet it is self-evident that to be successful a CI utility system would have to be extensively decentralized, so that in any given community it would include local availability, price, service and perhaps even complaint data.

Second, the economics of this kind of venture is still highly uncertain. The CAC (1966) speaks of a nonprofit, nongovernmental venture (which philosophically has our own preference), while E. Scott Maynes (1975) talks in terms of either user or local government financing. The main point in favor of the latter alternative would be the public-goods (externality) nature of the information provided by the utility.

PROGRAMMATICS

Having thus attempted to forecast the operating environment we turn to the policy conclusions part of our exercise in strategic planning for CI systems.

Attending to the Information Seeker

The Information Seekers identified in our and related research are generalists, i.e., their interest in market information is transferable from one product to another. Indeed, to a fair extent their information-mindedness is independent of any given buying situation. We know that in the open market democracies these IS are the shock troops in the perennial struggle to maintain and increase consumer sovereignty. Being vigilantes of the marketplace the IS will, more than average consumers

personally enforce consumer rights

personally exercise consumer responsibilities

keep suppliers on their toes by pinpointing poor service, deficiencies in products, out-of-stock conditions, misleading advertising and other malpractices

voluntarily finance CI programs

disseminate information and advice to fellow consumers

serve as proxy purchasing agents for many less information-conscious and planful consumers

Everyday observation indicates that there are also specialty-IS, that is, average (or even underprivileged) consumers with a strong information-seeking propensity for a single type (or limited range) of product, such as autos, records, or "soul" food. Little research has been done on this group, but there is reason to believe it is quite numerous -- possibly several times larger than the generalist-IS category. It is also likely that in the markets of particular interest to them the specialty-IS perform some of the consumerist functions associated with IS in general.

The IS are most effectively assisted in their public functions in the marketplace by greatly enlarged and diversified CI programs of the variation discussed in this paper. But in a democracy everyone must be free to become an Information Seeker. An indispensable part of this upward thrust is a comprehensive set of policies aimed at the emancipation of underprivileged consumers. Average consumers are most readily helped along the way by consumer education and simplified CI programs.

What Business Can Do

The number of transactions between sellers and individual consumers in the affluent democracies of the world may well exceed one billion per day. It appears that in a clear majority of these transactions consumers are at least fairly well satisfied. To say that the open market system is a failure seems to us grossly unfair. Yet we are singling out business, among all consumer-policymaking groups, for separate discussion here as there is so much more that it can do that is yet undone, or done to much less than perfection. Much of this can be accomplished by voluntary action. A further reason for such a discussion is a conviction that individual firms in the future may secure an important differential advantage by adopting superior information as a competitive strategy. Finally, it seems clear that business in general stands to gain by being proactive rather than merely reactive in dealing with the modern consumer, his needs, aspirations and problems.

Business should make advertising and sales promotion more informative. An excellent way of making ads and mail-order catalogs more informative is to use material from CI programs to the extent this is permissible (e.g., referring to test reports and reprinting informative labels as done by the German mail-order house Quelle). Let the package inform, not deceive. Facilitate comparability by sensible and fair comparative advertising, by unit pricing, by providing an assortment that offers real choice, by participating in fairs, collective displays and multi-brand outlets. Most retailers could vastly improve sales training to upgrade clerks into consumer consultants. Owner's manuals and assembly instructions could be markedly improved. Warranties could be made more specific and yet more understandable.

This brings us to some of the things business could do in cooperation with others, notably consumers. In the past decade or two of consumerism we have witnessed a kind of "fighting on the barricades" in most affluent countries. We firmly believe the time has now come when both business and consumer groups are ready to sit down for problem-solving of mutual interest, just as management and labor have learned to do after an initial period of mutual suspicion. As part of this process consumer affairs management must be given much more weight in corporate affairs.

Whether in the interest of long-term survival of the open market system, or as a matter of social responsibility, or as an element of a superior competitive information strategy, it behooves business to do what it can to promote voluntary CI programs together with consumers and perhaps other interested parties, such as independent experts and government. The most crying current need among average and underprivileged consumers is simplified point-of-purchase information of the IL and QC varieties. We are firmly recommending combined voluntary IL-QC program open for all consumer products and services. Participating firms (be they producers or distributors) would themselves decide whether they would like the tags attached to their products to carry only the label, only the quality mark, or both. Separate committees -- composed on a pluralist basis -- should decide on the characteristics and measurements to be declared on the label and on the minimum performance threshold required for the quality mark. Other circumstances equal, consumers will naturally be served best when a seller uses both the label and the seal on his tag (and in his advertising).

FIGURE 1

COMBINED INFORMATIVE LABEL (IL) AND QUALITY CERTIFICATION (QC) LOGO

A hypothetical example of a combined label and seal is shown in Figure 1. The scales used in communicating performance data is in line with Swedish research a decade ago aimed at optimal combination of information and intelligibility. The thickened part of the scale indicates the range of performance of this type of cleaners currently being marketed. The arrow indicates this model. The star (or other simple symbol of a quality seal) should be in a striking color for those interested only in the simplest type of information. Incidentally, there is evidence from the Netherlands that even information-shy consumers may appreciate a double-decker quality seal plan. A green OK star may stand for "suitable for everyday reasonable use", while the gold EXTRA star may stand for extra high quality. Labeling is to be preferred to any additional complication of the quality seal.

As only a few germane characteristics can find room on a label, and as the label is not to be construed as a damper on innovation, producers should be free to inform consumers about other features of their product on the reverse side of the label. To facilitate comparative shopping at home it is desirable to publish an annual catalog of all labels in force.

Apart from the fact that a common, easily identified type of tag would be used whether a product would be given a label, a mark or both there are three other areas in which major gains will be obtained by a combined IL-QC program. Great common economies may be secured by joint testing, joint performance control, and joint promotion. Testing is an expensive and yet indispensable activity for both IL and QC. Even if most performance control is delegated to producers themselves, any independent CI agency must occasionally conduct performance control audits by repeat testing and/or a review of the quality control procedures at the factory level among participating producers. This is also costly. Promotion of the CI program itself to both consumers and producers requires a great deal of money. Our research indicates that a prime reason for the failure of many IL and QC programs in the past has been insufficient promotional and educational effort. A single promotional program for IL and QC is a major economic advantage.

Industry, consumer groups and independent laboratories should cooperate much more intensively than at present in the development of standard methods for measuring performance (SMMP). This is also an expensive activity. Decentralized experimentation in the development of testing methods is desirable, but presently a great deal of unnecessary duplication is taking place in almost all countries as well as internationally. Some of the common economies for an IL-QC program we have pointed to here would also benefit the proposed CI computer utility, both directly and indirectly.

A payoff from more straightforward product information will be fewer complaints. But better CI will also increase consumer satisfaction. In the long run, consumer satisfaction is the single most important determinant of business survival, both at the firm and at the system level.

Business may elect not to engage in the kinds of CI and consumer policies illustrated here, or do it only in a perfunctory way. If so, we have to put aside our programmatics and go back to prognostics. The scenario then likely will be quite different. It will probably involve obligatory information requirements, counter-information programs, mandated corrective information, an advertising tax to finance government CI programs, etc. --all these measures adopted in an atmosphere of animosity toward business. Some of these things may come anyway, but then likely in less severe form, and with business-proposed amendments incorporated with due respect for a legitimate viewpoint.

Further away on the horizon of that type of scenario are such prospects of questionable merit in an open market system as censorship of new products, mandated economy models, minimum quality standards, and such hamstringing regulations at every step of managerial activity that we shall have to accept zero growth whether we want it or not.

Wanted: Decentralized Pluralist CI Systems

CI part of consumer policy.  It is important to view CI as part of overall consumer policy. The numerous trade-off and reinforcement opportunities between education, information and protection should be especially considered. So, it should be emphasized, should the trade-offs and reinforcements between different types of CI programs and different groups of consumer policymakers. Related areas of private and public consumer policy include the following:

consumer education

standardization

advertising

sales training

complaints handling and redress

product safety

antitrust and competition policy

environmental protection

Systems development.  The need of viewing CI programs as parts or extensions of consumer policy, marketing communications, education and other social systems has been emphasized. But there is also need to think of all sources of consumer product information existing in a given culture as constituting a CI system (CIS). The opportunities for synergy and reinforcement are great --as are the somewhat opposite needs of independence and experimentation. We are convinced that in a pluralist, decentralized system the benefits of both competition and cooperation can be obtained without incurring an overdose of either.

Consumers' Liberation.  The rationale of CI programs is simple. It is the liberation of the citizen in his role of consumer. That role is a major one, whatever our interests or stations in life. CI is in and of itself an instrument to enrich the quality of life. It helps us free time and resources for other concerns than purely material ones. It helps us save on material resources for society as a whole. It has virtually nothing to de with inculcating or reinforcing materialism as such.

Incompatible it is with the idea of a free society to prevent anyone from spending his money foolishly, but it is quite within the scope of this ideal to assist people in spending their money less ignorantly. The costs of doing this are miniscule relative to the costs of everyday commercial information.

In the end it may well be that the principal effect of such programs is not the dissemination of information in itself, but rather the renewal of consumer trust in business, of consumer faith in the integrity of products and their makers. Inevitably, CI programs will tend to reward the purveyors of "value for money." Thus they are an instrument of perfecting the open market system. Let it not be forgotten that in a free society the market itself is the greatest comparative testing agency of them all.

REFERENCES

Consumers' Association of Canada (1969), A Community Information Network (Mimeographed, Ottawa).

Maynes, E. Scott (1975), "The Local Consumer Information System: An Institution-to-be?" in Proceedings of the Second Workshop in Consumer Action Research, April 9-12, 1975, Berlin: Wissenschaftszentrum.

Scherhorn, Gerhard (1973), Gesucht: Der Mnndige Verbraucher, Dnsseldorf: Droste.

Thorelli, Hans B., Becker, Helmut, and Engledow, Jack (1975), The Information Seekers - An International Study of Consumer Information and Advertising Image, Cambridge, Mass.: Ballinger.

Thorelli, Hans B., and Sentell, Gerald D., Consumer Emancipation and Economic Development: The Case of Thailand (forthcoming).

Thorelli, Hans B., and Thorelli, Sarah V. (1974), Consumer Information Handbook: Europe and North America, New York: Praeger.

Thorelli, Hans B. and Thorelli, Sarah V. (1977), Consumer Information Systems and Consumer Policy, Cambridge, Mass.: Ballinger.

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