Henry Ford once said, “You can have any color you want as long as it is black.” What would Ford say today as companies move towards the delivery of customized products? According to Cleverism, “Mass customization is most likely to replace mass production.” Is that Ford I hear turning over in his grave?

Mr. Ford and his eponymous company helped define 20th century America as the period of mass produced consumer goods. Thanks to his and other innovators’ efforts, consumer products rolled off the assembly line faster and cheaper than any period in history up to that point. Cars, clothes, food and most other consumer products found their way to the conveyor belt. Many historians and economists argue that the shift to mass production played a role in improving the overall lives of Americans as the accessibility to products improved while their cost decreased.

The Move to Customized Products

But the America that was overjoyed with mass produced cars, shirts and most other consumer products is morphing into one that appreciates personalization. Alvin Toffler, in his 1970 book Future Shock, describes society’s need for customized products – cars specifically, “that would give them an illusion of having one-of-a-kind.”

 

“Consumers expect it their way. In the era of Facebook stalking and self-aggrandizement, consumers view products as another form of expressing their uniqueness,” writes Storefront CEO Erik Eliason. Eliason cites three developing trends that have contributed to the mass customization movement:

 

1. Every Customer is Their Own Market. No longer does one size fit all. Customers expect it their way and are willing to pay for it.
2. Consumers Are More Expressive. Some call it self-expression. Others call it narcissism. Whatever you call it, it’s becoming easier to do.
3. Customization is the New Loyalty. Consumers that customize a product are more likely to become brand advocates. Customizers are also more likely to be repeat purchasers, completing the loyalty loop.

If meeting customer expectations is not enough to drive companies towards the offering of customized products, entrepreneurs should recognize that customized products bring price premiums.  TechCrunch’s Liraz Margalit writes, “People are willing to pay higher prices for self-designed products relative to non-customized one. And in most instances, hey would consider the added premium a reasonable cost to pay, as the customized product is perceived more valuable than the standard one.”

Customized Products Attract Brands

The demand for customized products is getting the attention of a growing number of companies that have begun to introduce products that can be partially or entirely customized. Cleverism writes that “Mass customization is an important business concept, which numerous brands are adopting these days.”

“Customization has become increasingly significant to brand-name companies because it’s now part of the broader trend that shifts from viewing customers as recipients of value to co-creators of value,” writes Margalit. “The customer is now becoming part of the ‘product development’ process.”

Consumers Seek Customized Products

Margalit’s TechCrunch article describes a Bain & Company survey of more than 1,000 online shoppers that “found that more than a quarter of shoppers, 25-30 percent, are interested in online customization options, even if only 10 percent have tried it until now.”

Forrester’s JP Gownder cites on the company blog a Forrester study which found that “More than 35% of U.S. online consumers are already interested in customizing product features or in purchasing build-to-order products that use their specifications.”

 

And finally, Sam Osborn cites a U.K. survey by Deloitte that found that “More than 36% of consumers reporting they are interested in personalized products or services.” Osborn also found support for Eliason’s and Margalit’s assertion that customized products support premium pricing pricing. Osborn found that, “71% of [those surveyed] stated they would be prepared to pay a premium price.”

As such, it appears that the data suggest that manufacturers of consumer products must begin to evaluate whether some level of customization will be necessary to fulfill the needs of the growing consumer segment that desires personalized products. Outstanding customer experience (“CX”) is not a value-add. It must be a fundamental component of any offering. The availability of a personalized option improves customer experience by meeting a consumer expectation.

Benefits of Customized Products

The data suggests that the demand for customization is growing. Entrepreneurs with the ability to offer customization gain a competitive advantage over mass producers that have not awoken to the trend.

“Customization has the potential to offer many benefits to the consumer, the producer, and society. Customized products offer the consumer the benefit of products that fit their needs. No longer will a consumer have to search for a product that may come close,” write Kansas State University professors Janis J. Crow and James Shanteau in Online Consumer Psychology: Understanding and Influencing Consumer Behavior in the Virtual World. “In addition, once a consumer has customized his or her product, the process builds in a repeat purchase.”

“The ability to influence the shape of an object automatically generates emotional attachment,” writes Margalit. “The selection of the product’s features, colors and shape generates thoughts concerning ‘how would it feel’ to own that object.” This emotional attachment can explain why some consumers have a clear preference for customization. The same feelings may drive repeat purchases as consumers seek products that have been embedded with their personality.

Fortunately for entrepreneurs the challenge of mass customization is not as daunting as it was just a couple decades ago. “Readily available information technology and flexible work processes permit [businesses] to customize goods or services for individual customers in high volumes and at a relatively low cost,” wrote James H. Gilmore and B. Joseph Pine II in the Harvard Business Review.

As far back as 1992, Pine discussed America’s desire for self-expression. “Customers can no longer be lumped together in a huge homogenous market,” wrote Pine in his book Mass Customization: The New Frontier in Business Competition. Like Toffler 20 years earlier, Pine described a consumer in need of self expression. Pine described a production environment that provided the best of both worlds – low cost mass production combined with the ability to provide tailored features and functionality.

Markets of One: Creating Unique Value through Mass Customization, released in 2000, continues the discussion of mass customization. Pine, Bart Victor and Andrew C. Boynton write, “Continuous improvement has enabled thousands of companies to realize lower costs than traditional mass producers and still achieve the distinctive quality of craft producers.” Through the use of mass customization producers appeal to consumers by providing a product that matches or comes close to their ideal product while allowing producers to utilize improved workflows and technology to maintain high output and obtain cost savings comparable to a mass production environment.

Approaches to Mass Customization

Gilmore and Pine put forth in their Harvard Business Review article the following four distinct approaches to mass customization:

1. Collaborative Customization: Customizers conduct a dialogue with individual customers to help them articulate their needs, to identify the precise offering that fulfills those needs and to make customized products for them.
2. Adaptive Customization: Customizers offer one standard, but customizable, product that is designed so that users can alter it themselves.
3. Cosmetic Customization: Customizers present a standard product differently to different customers.
4. Transparent Customization: Customizers provide individual customers with unique goods or services without letting them know explicitly that those products or services have been customized for them.

 

Challenges to Customizing Products

While Pine, Victor and Boynton illustrate how mass customizers can achieve a competitive advantage through low cost and custom appeal, Gownder writes that “Mass customization has disappointed.” Gownder cites Levi Strauss and Dell as failures in mass customization for reasons such as poor execution and overly complex and costly operations. Gownder further writes, “Overall, the ‘next big thing’ has remained an elusive strategy in the real world, keeping product strategists away in droves.

But help has arrived. “The cost of the technology is dropping, for one thing,” writes John Paul Titlow. “Development that used to cost companies $1 million and nine months now goes for $50,000 and can take as little as two months to build. At the same time, the technology itself has become more advanced, allowing businesses to build sophisticated, yet easy-to-use interfaces (or “configurators”) from which consumers can co-create products.”

Ease of use is critical to mass customization efforts. Margalit writes, “If the consumer is required to invest too much effort, the product will be viewed as inconvenient or annoying.” As such, the development of customized product processes must appear seamless from the consumer’s perspective. The interfaces must be intuitive and the process must be quick and easy. The alternative will be wasted time and investment as well as the possible loss of future business to a competitor that has designed the process with the consumer in mind.

Despite Gownder’s observations regarding previously failed efforts, he ultimately concludes that industries now know the do’s and don’ts of mass customization and are better prepared to proactively manage the challenges. With regard to the future of mass customization, Gownder suggests that the time is right for producers to exploit technological advances and falling costs that provide the opportunity for more effective and efficient deployment of mass customization strategies.

A Customized Product Success Story

The lessons learned have not been lost on BOLDFACE CEO Randy Fenton. BOLDFACE, an adaptive customizer, manufactures backpacks and guitar bags that allow consumers to customize the exterior, or “face” panel of the product. Using a web-based widget, consumers upload images from their phones, tablets or personal computers to create a one-of-a-kind product.

“BOLDFACE was launched specifically to meet the needs of the growing consumer segment dissatisfied with cookie cutter products. Through my personal inquiry of consumers and observation of market trends over the past few years I have noticed a rise in the desire of consumers to favor products that provide the ability for self-expression,” said Fenton during an interview.

“BOLDFACE has seen early and rapid success because we are the only company in the world that allows consumers to personalize their backpacks in a manner that gives them freedom of self-expression. Through the process I also learned that consumers’ preferences change quickly. That’s why we designed BOLDFACE backpacks to allow consumers to swap out the customized exterior (called a “face”) with another in the snap of a finger. That is customization on steroids.”

Customized Products in All Industries

But nimble startups like BOLDFACE are not the only companies getting into the mass customization game. “A variety of major brands – like Kraft, Hallmark, M&Ms, Wrigley, Nike, Keds, Ford, and many others – have recently introduced important mass customized product offerings,” writes Gownder. “The time is now for product strategists in all industries to consider adding mass customization – including true build-to-order products – to their product portfolios.”

Gownder points to the CURA Framework as a guide for mass customized product development. Developed by Forrester, CURA provides producers with guidance using the following four techniques:

1. Curation: This aspect of the framework establishes the blank slate and defines the tools that can be used to customize the product. For example, in the case of BOLDFACE, curation is related the backpack template that consumers use to design their customized backpack. Curation also includes the tools used to upload images and control the arrangement of the images within the template.
2. Usability: Customer experience, or CX, is the focal point of usability. A process that provides ease of use, intuitive design and other factors that make the process seamless (e.g., desktop and mobile capability) contribute to high usability. In BOLDFACE’s case, the consumer’s ability to easily upload an image, design a backpack and make a purchase ensures BOLDFACE’s high usability rating.
3. Resonance: Successful customization efforts address consumer pain points in a way that resonates with consumers. Resonance solves a real need in a relevant manner. For example, for years consumers have shared their photos on social media platforms as a way to illustrate what they value and love (e.g, kids, pets, family, vacation spots, etc.). BOLDFACE provides consumers with the ability to share their passion in the offline world.
4. Anticipation: Anticipation requires consumer inquiry and research to determine market needs today and tomorrow. This aspect of the framework requires that  producers understand what the market knows it wants as well as what the market does not yet know that it wants but that it will want once it learns of its availability. According to Fenton, “BOLDFACE initially struggled getting people to understand our innovation that includes customized and interchangeable faces. BOLDFACE was the first and is the only company to provide this functionality so consumers did not have a reference point. Once they saw what we did they immediately got it. But that took some effort up front.”

Bain & Company’s Elizabeth Spaulding and Christopher Perry provide the following set of recommendations to assist entrepreneurs in rolling out a successful mass customization strategy:

1. Be clear about the strategic value you hope to achieve before testing the waters. While customization of one form or another appears to be the trend in nearly all industries, entrepreneurs should determine in advance the strategic value that customization will bring. Depending on the larger strategic plan, customization may be deployed in to achieve different results. Knowing why it is being used and the expected outcome will contribute to a successful effort.
2. Determine how much customization to offer. Gilmore and Pine outlined four types of customized. Each company must determine the type of customization to offer based upon the needs of its customers as well as based on its own objectives. For example, BOLDFACE chose to offer complete customization of the design on their backpacks and guitar bags. Customization begins and ends there based on their mission of giving consumers an outlet for self-expression.
3. Offer consumers a simple and easy design template as a starting point, as opposed to a blank canvas. The surest way to chase a consumer away is either to give them too many options or none at all. Providing consumers with a starting point gets their creativity going and excites them. Giving a blank slate makes them work too hard, resulting in their departure. BOLDFACE’s customization widget provides a selection of backgrounds and fonts. It also provides an easy to use image upload feature. These tools engage consumers instead of scaring them away.
4. Make the return process seamless. Customers want the option of returning goods within a reasonable period, typically 30 days. While companies may not like to possibility of accepting the return of a customized product, consumers want to know that if the product is not as promised or expected, they can make a return. Margalit’s comments regarding emotional attachment supports the notion that once the customized product is received it will not be returned as it is one of a kind and personalized like no other similar product.
5. Helping consumers share their creations with friends and relatives. The use of a social sharing feature goes a long way in building a community of engaged customers. Companies must provide the ability to allow consumers to post their personalized product with friends and family on their many social networks. This practice satisfies consumers and provides the company with a great source of branding.

While Henry Ford may be turning over in his grave, consumers have him and the other industrialists to thank for mass customization. Today, consumers can customize everything from their cars to their candy to their backpacks. Entrepreneurs that offer customized products will remain competitive in an evolving landscape. Those that have not moved towards customization or feel that customization is not for them may soon see their company become the Model T of their industry. Something that Henry Ford would have probably appreciated.

 

RECOMMENDED BOOKS 

 

1. Custom Nation: Why Customization Is the Future of Business and How to Profit From It by Anthony Flynn and Emily Flynn Vencat. Smart brands such as Chipotle, Zazzle, Nike and Pandora are ditching the outdated 20th century model of a one-size-fits-all approach to providing products and services. From a Netflix movie night to a marriage courtesy of eHarmony, customization is changing every corner of American life and business.

2. Mass Customization: The New Frontier in Business Competition by Stan Davis and B. Joseph Pine II. “Mass Customization” – the trailblazing book that showed companies how to mass-produce and individually customize their products and services. New ways of managing, together with new technology, make possible the seeming paradox of providing each customer with the “tailor-made” benefits of the pre-industrial craft system at the low costs of modern mass production. As author Joe Pine makes clear, businesses that learn to embrace mass customization are able to create greater variety and customization in their products and services at competitive prices, or better. This insightful book shows how it’s done.

3. Product Customization by Lars Hvam, Niels Henrik Mortensen and Jesper Riis. For the majority of industrial companies, customizing products and services is among the most critical means to deliver true customer value and achieve superior competitive advantage. This book presents an operational procedure for the design of product configuration systems in industrial companies. It is based on the experience gained from more than forty product configuration projects in companies providing customers with tailored products and services.