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'Made in America' a Competitive Advantage

Written by George Anderson

Three stories lead to one question.

  1. Crain's New York Business reports on apparel retailers, including Bloomingdale's, Kohl's, Macy's and Saks, using private labels to contain retail prices and bottom line results.
  2. A Bloomberg News article looks at how designers Joseph Abboud and the Olsen twins, along with chains such as Brooks Brothers, are using "Made in America" labels to drive sales.
  3. Research by Boston Consulting Group projects a growing number of American manufacturers moving operations back to the U.S. from China as wages and other factors such as fuel make it more expensive to produce goods there.

The question: Is there a strategic advantage to be gained by retailers that market private label goods manufactured here?

Brooks Brothers, according to Bloomberg, manufactures a "large percentage" of the items it sells in U.S. factories.

"There is a customer that appreciates that the product is made in the United States and is willing to pay for the difference," Claudio Del Vecchio, CEO of Brooks Brothers, told the news service.

Pam Danziger, president of Unity Marketing, said Americans are more interested in where goods are produced today.

"Made in America feeds into the values proposition," she told Bloomberg. "They are voting with their money, not just for U.S. jobs, but for a way of life. In 2007, they were on a spending jag -- they weren't thinking about things like this."

Manufacturers and retailers, according to Boston Consulting Group, are increasingly thinking about producing goods in the U.S.

"All over China, wages are climbing at 15 to 20 percent a year because of the supply-and-demand imbalance for skilled labor," said Harold Sirkin, a senior partner at Boston Consulting Group, in a press release. "We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you're going to see a lot more products 'Made in the USA' in the next five years."

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