Consumers have a well-documented and growing attraction to products and services they see as “authentic,” and research shows they place a higher value on such businesses. But how far are they willing to go to gain a real experience?
New research by Stanford Graduate School of Business professor Glenn Carroll focuses on the restaurant industry and asks whether consumers, in their pursuit of authentic food, disregard other important factors, like cleanliness.
The idea for the research came from a story Carroll and his co-researchers, David W. Lehman of the University of Virginia and Balázs Kovács of the University of Lugano, Switzerland, remembered about Chinese restaurants in Los Angeles in the 1980s. These restaurants routinely stored ducks by hanging them from their necks at room temperature for extended periods. The restaurants were cited at the time for violating California’s health and safety codes, but many of their customers strongly objected to the crackdown, even though it was done to protect their health. Their reactions were rooted in claims that this method of cooking and storing ducks had been practiced for more than 4,000 years — and during that period had fostered one of the world’s largest populations, says Carroll. “This showed that violating rational norms — like the Los Angeles health code — might be OK, even rewarded at times, if a restaurant is seen as authentic.”
How Consumers Form Opinions
In past research, Carroll and his collaborators found that consumers regularly gave higher ratings to restaurants that they considered authentic. This time the researchers wanted to learn more about how consumers form those opinions.
It’s more difficult to judge the authenticity of a restaurant than, say, that of a diamond ring or a piece of art. With those, “it’s an issue of provenance, and it profoundly impacts that item’s value. A fake Picasso, for example, is worth a lot less than a real one,” says Carroll. “But whether or not a Chinese or Thai restaurant is authentic is in the eye of the beholder.”
In the latest research, Carroll and his colleagues posited that consumers apply one of two social-based codes when forming opinions about a restaurant. One code is rational and scientific, known as an imperative code. The other, known as an interpretative code, is context-based. In the case of restaurants, the imperative code is found in the establishment’s compliance with local health regulations. The interpretive code is more concerned with if and how a restaurant conforms to cultural norms, making it “authentic.”
In the case of the Chinese restaurants, two social codes conflicted — hygiene and authenticity. Carroll and his colleagues wondered if that was true more broadly and which code, hygiene or authenticity, held the most sway with consumers. To find out, they analyzed consumer reviews of restaurants in Los Angeles County posted on a popular on-line restaurant review site as well as health inspection data about the restaurants from the county’s Department of Public Health.
The 9,734 restaurants that qualified for the research sample were reviewed on the site at least once and had a definite match to the public health department's inspection record.
To measure the consumer value of restaurants, the researchers used the number of stars assigned to a restaurant by a reviewer. For hygiene, they looked at the restaurants’ latest health grade from the public health department (posted prominently on the window as A, B, C or F) and created a hygiene score for each review by analyzing the text. To gauge authenticity, they did the same thing, creating an authenticity score for each review by searching for keywords related to authenticity and inauthenticity. “Then we compared the effects of the health ratings and authenticity scores on consumer value ratings of each restaurant,” says Carroll.
Authenticity Trumps Cleanliness
What they found was that authenticity, the interpretive social code, tended to trump the importance of cleanliness, the imperative code. Although consumers had negative things to say about restaurants with low health grades, they tended to overlook low grades when the authenticity of a restaurant was high. In the end, unhygienic but authentic restaurants were valued more similarly to their hygienic counterparts. Less hygienic and less authentic restaurants, however, had a significantly lower value than their hygienic counterparts. The research showed that when social codes conflict, consumers tend to apply one and sidestep the other.
Although this study focused on food, authenticity is in play in markets for many other products and services. For businesses producing anything that is seen as authentic, this research shows that perception has real value, says Carroll. It may have so much value, in fact, that buyers will overlook flaws. “Authenticity seems to buffer businesses against negatives,” he says. “It makes their products more appealing and at the same time, can buy them some insurance.”
Glenn R. Carroll is the Laurence W. Lane Professor of Organizations at Stanford Graduate School of Business.