Forbes.com
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This article originally appeared on Forbes.com Sellers of everything from dress shirts to handbags and even consumer packaged goods are discovering the value of letting customers create their own unique products. Retailers use Big Data to present a personalized set of products to their customers—it’s been a driving force behind Amazon’s success. Now brands are taking personalization a big step forward into mass customization. They are discovering that they can elevate customer loyalty and engagement—and use their customer base as an engine of advocacy to potential buyers. Product customization helps brands boost sales on their own websites or gain share on a retailer’s site. For example, Pepperidge Farm customers now design Goldfish crackers, and Jawbone customers configure their own Jambox speakers. Trek enables cyclists to build a bike from the ground up. And Brooks Brothers allows men to create their own suits. A Bain survey of more than 1,000 online shoppers found that while less than 10% have tried customization options, 25% to 30% are interested in doing so. While it is hard to gauge the overall potential of customization, if 25% of online sales of footwear were customized, that would equate to a market of $2 billion per year. Beyond the pure size of the opportunity, our survey showed that those customers who had customized a product online engaged more with the company. They visited its website more frequently, stayed on the page longer and were more loyal to the brand. Equally, customization helps companies differentiate their products from those of their competitors at a time when the Internet is rapidly making it easier for customers to compare the prices of products with standard features. With the proliferation of social media and online publishing, styles and trends now change faster than ever. Customization helps companies gain insights from customized designs and fine-tune products to stay one step ahead of the competition. With each design choice, customers share real-time shopper preferences that go well beyond what they would say in a focus group. For example, what Brooks Brothers learns from its customers in one season is used to help it deliver the next season’s product line. “All of this activity points to rapid growth in mass-customization offerings across categories. Early pioneers like Oakley have demonstrated strong consumer demand for customized products, and successfully orchestrated programs are delivering positive ROI and consumer engagement,” according to Kent Deverell, CEO of Fluid, a digital agency and software as a service provider that helps companies launch customization offerings. In our experience, all successful companies follow five rules.
As more retailers and brands give their customers the design-it-yourself option, they should see a boost in profitable revenues, stay connected to their best customers and lower costs. Winners will be those that know their objectives, understand how much customization they really need, keep things simple and create a repeatable model for delighting customers again and again. Written by Elizabeth Spaulding and Christopher Perry, Bain & Company partners based in San Francisco and members of the firm’s Global Retail practice. |