Supply Chain Transparency Reveals Women Pay More for Common Products

Michael Clark
Wed, Feb 10, 2016
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Manufacturers can advertise a fair supply chain to appeal to female shoppers.

The recent demand for transparency in the supply chain and inventory management comes from an informed and connected consumer audience, according to The Guardian. Not only do customers want to make sure the products they buy are safe and healthy, they seek out companies that give back to their communities and operate fairly.

Recently, a hidden form of market discrimination has been brought to customers' attention. A 2015 consumer report conducted by New York City's Department of Consumer Affairs found women pay more for similar products than men. Specifically, merchandise marketed to women through advertising or specific packaging consistently costs more than comparable male options.

As this information gains more attention, manufacturers and retailers need to decide how to move forward. By looking at the causes of the pricing differences, businesses can better analyze their own contribution to unfair supply chains or recognize when disparity is necessary.

The Cost of Being a Female Consumer
The New York consumers affair report analyzed five different industries, almost 100 companies and hundreds of products. The researchers found prices for women products were higher than almost identical male-centric merchandise in 42 percent of cases - while the men's options were more expensive for only 18 percent of items studied.

While inequality existed in a variety of product categories, certain merchandise showed clear disparity. The report showed women paid 13 percent more for personal care products, especially shampoos, even though the ingredients were basically the same for both genders. Female consumers should also expect to pay 8 percent more for adult clothing.

The problem exists for women of every age as the study discovered an 8 percent hike for female senior care products and similar consistent increases for children's clothing and toys. Consumerist offered the example of a girl's toy that cost a great deal than the same boy's product when the only difference was color.

This is not the first time consumer gender discrimination has been studied. Market Watch shared instances of women paying more for insurance, dry cleaning and mortgages.

Why Do Women's Products Cost More?
Sometimes businesses have what they believe are sound reasons for raising prices for females. For example, insurance companies may claim they have to charge women more because statistically they live longer than men.

When it comes to products, there are differences between many of the items studied by the New York report. The Washington Post, however, suggested many of these unique factors don't account for the difference in their prices. Shampoos can cost a good deal more when the only difference is scent.

Some have come to refer the pricing disparity as the pink tax. Male products are the standard and manufacturers create variations that appeal to females with slight differences or unique packaging - such as pink boxes. Since businesses have to adjust their processes to create specialized merchandise, they have to charge a little more for the unique features that alter consistent production routines.

Finally, there is the argument companies just respond to consumer demand. If female shoppers are willing to pay more products, why shouldn't organizations offer merchandise at the price that makes them the best profit?

Creating a Fair Supply Chain
There are federal regulations that prevent businesses from taking advantage of certain consumer groups for services. For example, the Affordable Care Act prevents insurance companies from offering more expensive packages to women. There aren't any government regulations stopping manufacturers and retailers from changing price based on sex yet, but this new report - and many like it - may spur federal organizations to action.

Until the government steps in, consumer groups advised shoppers to spread specific examples of inequality on social media. If female customers want to save money, they could ignore packaging and buy male products that offer the same functionality.

Manufacturers and retailers should watch consumers' reactions to their products. By analyzing product flow out of their warehouses, businesses can see if offering specific merchandise for particular consumer groups is worth the possible bad publicity. If an organization has an automated data collection solution, it can track the demand for each of its products and see demand compared to costs.

Knowing every detail involved with production, shipping, marketing and sale of a product allows businesses to justify price and alter operations to meet consumer preferences.

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