08. november 2011
Good consumer conditions are an important driver for growth and new opportunities benefiting consumers. When consumer conditions are good, it may ensure that consumers feel safe when buying goods or services, that businesses compete on a level playing field, and that consumers choose the products they prefer. Good consumer conditions are a prerequisite for consumers to incentivize businesses to compete on price, quality or innovation. This enhances market efficiency and increases wealth.
Consumer conditions are not only dependent on efforts made by businesses and authorities. Effort made by consumers trying to get the best deals, are also important. When consumers are active and pursue for the best product, it enhances competition.
The Consumer Condition Index 2011 (CCI) shows considerable differences in how well markets are performing. There are still challenges in some areas in respect to consumer assessment of transparency, confidence and complaints.
Consumers experience consumer conditions as best in the market for “books” and a range of “experience markets” e.g. “cinema, theater and music” and markets for “large consumer goods” as “new vehicles”. These markets are furthermore the markets where consumers consider it easiest to choose the best products, and where consumers are most active and search the market before buying. Active consumer behavior in these markets may be due to higher consumer interest in “experience market” products, and there may be more money to save on “larger consumer goods” than in other markets.
The market for “books” has since 2009 been the market with the best consumer conditions, according to CCI. A contributing explanation may be the gradual liberalization of the market since 2006.
In all markets situations may arise where consumers need to complain. Consequently it is important to consumers that they are able to complain. Indicators point to the fact, that businesses that offers goods and services which live up to consumer expectations, may save both costs and time, because consumers experience fewer reasons to complain.
Increased transparency in a market or better opportunities to compare price and quality makes it easier for consumers to choose another supplier.
In markets as “TV-packages / channels”, “Mobile telephone subscriptions” and “Banks” consumers seek a rather large amount of information before buying, but indicate it is difficult to choose the best product. These markets furthermore receive the lowest consumer conditions assessments by consumers. This may partly be explained by these services being more complex. Consumer conditions in these markets may be strengthened by assuring more uniform and clear information to consumers. Examples of clear consumer information is annual percentage rates (APR) and risk markings on investments products.
Consumer trust in markets and businesses are important. In complex markets as the market for “dentists”, consumers consider it difficult to grasp the quality of services. Trusting businesses may save consumers time gathering various information about the supplier before buying. Trust may on the other hand inhibit consumers exploring alternatives that might turn out to be better. Almost fifty percent of the consumers have been with the same dentist for ten years or more. At the same time a quarter of the consumers assess, that they may be able to save money or get a better service switching to another dentist. But they stay at their current dentist, because they feel safe.
Every consumer must decide whether it is worthwhile to switch supplier, nonetheless it is also important that regulation and businesses behavior provides consumers with good opportunities to explore markets.
Danske forbrugerforhold 2011 (The analysis is only available in Danish)