Caveat emptor ─ Latin for “let the buyer beware.”
This simple phrase has become an English proverb and represents the economic reality at the core of the American commercial system: sellers have more information than customers do. The concept stems from common law and underpins all of our commercial transactions.
The phrase implies: “I know more than you do; it’s your responsibility to find the truth.” This “information asymmetry” between seller and buyer, where one party has an advantage over the other, undermines consumer’s ability to make purchase decisions aligned with their needs, values, and personal criteria. This imbalance is what leads to the mistrust inherent in our commercial systems. And for brands, this mistrust can become reputational. It may, in fact, become existential.
It doesn’t have to be this way and in fact, due to new technologies, regulations, and societal demand for transparency, it’s not going to be this way. The balance of power is shifting. Forward thinking businesses and consumers are behaving differently. And, it’s going to change the world. It’s a re-definition of the commercial environment, we call it:
“The new era in consumer and commercial transparency.”
This new era is defined by “symmetrical information” and creates a marketplace where brands, suppliers, logistics companies, and everyone in the supply chain contributes information along a product’s journey, until a complete data history is formed, and delivered to end consumers to inform their purchase decisions. To make this new era sustainable and beneficial for everyone, product information – in the form of underlying data – is treated as property. This means recognizing that the creators and contributors of this data have ownership rights, and the exchange of this data is valued as a commercial, economic transaction that can be incented and rewarded. This environment is built on transparency; it is built on digital disclosure. It restores trust.
Being brutally transparent as a business is a great thing. It’s really hard. And, it’s extremely scary. As my winemaker friend, Sam Tannahill, says: “I’m not sure consumers really want to know what the wine industry is legally allowed to put into or do to wine. On the other hand, if we’re doing something to the wine we don’t want to talk about, we shouldn’t be doing it.”
But being transparent is the right thing to do. It’s an incredible opportunity to create competitive advantage. And soon, it will become table stakes. It is inevitable. The question I ask leaders is: “Is it going to happen to you, or because of you?”
The slogan for the new era is: “Let the buyer be aware.”