This subject came to mind during a visit to Best Buy. I needed a hard drive that same day and overheard a conversation between a customer and an employee that went something like this:

  • Customer (pointing to a 3.5-inch model with a built-in USB hub and another 2.5-inch model without one): What’s the difference between these two hard drives?
  • Employee (picking up the box to read the description): I’m not really sure. That one has more terabytes, so you can store more files.
  • Customer: Is that really the only difference?
  • Employee: Yes, yes, that’s really it.
  • Customer: (Awkward silence) OK, thanks.

I had a question of my own and was looking for the answer on my phone because the labels in the store were useless. I immediately gave up on asking the employee, who clearly had no idea what he was talking about. With my phone, I had more information than the store selling the product!

Before the internet and smartphones, merchants held more information than consumers in most markets. A well-informed consumer could consult newspapers, trade magazines or recommendations from friends before buying a product. Once in the store, however, the merchant was the last available source of information, whether through signage or the knowledge of its salespeople. Beyond sales advice, which was necessarily coloured by the seller’s financial interest, the main signals of quality used by consumers were, in order of importance, the product’s brand, its price, its physical appearance and the merchant’s reputation.1 The internet and smartphones multiplied the available sources of information: expert reviews, customer reviews, comparison sites, specifications, price comparison tools, etc. Information asymmetry was reversed in favour of consumers rather than retailers.

George A. Akerlof introduced the concept of information asymmetry in 1970.2 The part of the theory that interests us most is that, in a given market, the greater the information asymmetry in favour of the seller, the smaller the market becomes, potentially to the point of disappearing. Conversely, as the information available to buyers increases, the market grows.3 Dishonest sellers are pushed out, prices fall, quality improves, and both consumers and the remaining sellers benefit from the larger market.

Retail was doing very well in Canada at the time, with in-store sales up 7.5% and online sales up 19.4% in October 2017 compared with October 2016.4 Although traditional retail still held the lion’s share of the market at 97.6%, I propose that the rapid growth of ecommerce was driven in part by the increase in information available to consumers.5

(Note 2026-09-02: The figures in this paragraph concern Canada in October 2017.)

The implication for any marketing manager working in retail is simple: become the best source of information in your market to strengthen your position within it. Amazon was a good example of a general retailer applying this conclusion. Its product pages offered reliable descriptions and specifications, along with a great many reviews and questions and answers from real customers. Amazon fiercely defended its rating system, going so far as to sue sellers who tried to manipulate it.

(Note 2026-09-02: This example describes Amazon’s practices and lawsuits reported in 2016. Since then, Amazon has become a far less reliable source of reviews and information. The proliferation of review manipulation, listing hijacking and other quality problems has substantially weakened this advantage.)

Another approach is to become an authority in your field through content marketing.6 One excellent local example was Café Barista, with its blog and its brand-new Institut National du Barista. They had clearly become THE authority on coffee in Quebec. By improving consumers’ knowledge of coffee, they could increase demand for higher-quality coffee, their market, at the expense of mediocre coffee.

(Note 2026-09-02: The description of Café Barista and its institute reflects their online presence in 2018.)

Now that you know a better-informed consumer is good for your business and for the economy in general, what can you do to better educate customers in your market?

Footnotes

  1. Jacoby, J., Szybillo, G. J., & Busato-Schach, J. (1977). Information acquisition behavior in brand choice situations. Journal of Consumer Research, 3(4), 209-216.

    Rao, A. R., & Monroe, K. B. (1989). The effect of price, brand name, and store name on buyers’ perceptions of product quality: An integrative review. Journal of Marketing Research, 351-357. ↩

  2. Akerlof, G. A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(3), 488-500. ↩

  3. Levin, J. (2001). Information and the Market for Lemons. RAND Journal of Economics, 657-666. ↩

  4. The Daily: Retail trade, October 2017, Statistics Canada ↩

  5. A good hypothesis to test in a master’s thesis or dissertation! ↩

  6. One of the goals of this blog 😉 ↩