Consumers have more purchasing choices than ever before thanks to the globalization movement. The Internet has opened new opportunities for browsing from the comfort of home, and there are products available from all over the world. Globalization has changed consumer buying behavior in ways that could never have been anticipated.
Globalization is the economic trend that began in the latter part of the 20th century. Southeast Asia embraced the free-market system, trade barriers were dismantled and free trade allowed competition to spread around the world. The benefits of globalization have been an increase in product variety for consumers, lower prices and improved quality of products, although some might debate the last benefit. The drawbacks have been a loss of U.S. jobs and manufacturing industries. Concerns remain about Third World worker safety and environmental conditions.
In a consumer-driven economy, people vote with their dollars. The level of U.S. imports is testimony to the consumers’ acceptance of foreign-made goods. While many consumers give lip service to the desire to buy American-made products, most do not. Some consumers express concern about the working conditions of overseas workers. The fair trade movement is the result; fair trade items are produced by workers who receive larger and fairer compensation for what they produce. The internet, of course, is one of the driving forces of globalization. Consumers can bypass the local merchant and search the world to find the products the desire.
Rebirth of Local Industry
One of the interesting effects of globalization that bodes well for small businesses is the rebirth of local industry, Product labeling that identifies a product’s country of origin has heightened consumer awareness of the extent to which foreign-made goods have replaced those made in America. Coupled with a concern about loss of jobs, cottage industries have ridden a “buy America” movement. Even some grocery stores are touting locally grown food products. While not making a major impact on imports, the localization movement has raised consumer awareness and is creating demand for niche products.
While the globalization trend has benefited consumers in many ways, it is not without drawbacks. Competition generally tends to create better-quality products, but that is not always the case. Also, foreign-made goods may not be subject to the same standards as American-made goods. And while the growth of product availability has given American buyers many more choices, the loss of jobs due to globalization has made stretching the consumer dollar very difficult for many.