Can Manufacturers Keep up with Mass Customization?
We take a look at how leading-edge manufacturing companies are profiting from increased sales and customer loyalty thanks to sophisticated order management systems, responsive supply chains, and flexible production techniques that allow their consumers to order highly customized products direct from the factory.
THE RISE OF MASS CUSTOMIZATION COMPANIES: BECAUSE EVERYONE WANTS TO BE UNIQUE
In today’s world of wide-ranging consumer choice, it’s hard to wrap your head around the fact that between 1914 and 1926 Ford Motor Company painted each and every one of the nearly 14 million Model T Fords rolling off its massive moving assembly lines in the same color: black. In an era when Henry couldn’t make cars fast enough to keep up with demand, he would decide what was best for his customers. And because black paint cost the least and lasted the longest, black is what his customers got.
“Any customer can have a car painted any color that he wants so long as it is black.”
— Henry Ford, Remarking About the Future of Ford Model T Cars, in 1909
Compared with 100 years ago, customers today have much, much higher expectations.
And why not? We live in a world where we can order a taxi, dinner, and a movie online using the smartphone in our pocket. Because online shopping offers such an exceptionally wide range of purchasing choices available at the tap of a finger, it’s elevating consumer expectations across the board.
Undoubtedly, the next logical step in this consumer evolution is the mainstream acceptance of mass product customization. Indeed, an increasing number of consumers are showing a preference for products that can be personalized or customized, either to meet their unique needs or set them apart from the crowd (or a combination of the two).
Yet as attractive as the idea of implementing mass customization may sound, the resulting financial and organizational impact on most manufacturing companies is quite daunting. Mass customization puts huge pressure on product manufacturing companies to find ways to up their game in nearly every aspect of their operations, from introducing new customer sales processes and implementing responsive supply chains to crafting flexible yet cost-effective custom manufacturing processes.
THE LOOMING BATTLE FOR MARKET SHARE: MASS CUSTOMIZATION COMPANIES VERSUS ONE-SIZE-FITS-ALL COMPANIES
Many of today’s original equipment manufacturers (OEMs) are taking a hard look at custom manufacturing techniques to evaluate their potential for increasing overall profits by expanding their brand offerings into new adjacent and niche markets.
Recent research from business consultancy Deloitte offers some insight into the potential upside of mass customization initiatives.
According to Deloitte:
- More than 50% of consumers indicated interest in purchasing custom products or services.
- Nearly half of consumers said they would wait longer for delivery of a personalized product or service.
- A majority of consumers would be willing to pay more for custom products or services.
- Consumers expressed an interest in being actively involved in the process of ordering custom products.
Deloitte contends that one-size-fits-all manufacturers that avoid introducing product personalization are at risk of losing both revenue and customer loyalty in the long term.
But at what cost? Deloitte research consultants freely admit that the implementation cost for mainstream suppliers of high-volume products and services could outweigh the incremental sales increase.
In other words, mass customization could be a money loser. The challenge is to find the right number and type of customization choices while maintaining profitability.
In light of this, let’s take a look at the range of possible customization options.
COLLABORATIVE, ADAPTIVE, COSMETIC, AND TRANSPARENT: THE FOUR FACES OF MASS CUSTOMIZATION
Back in 1997, James Gilmore and Joseph Pine wrote a very influential paper published in the Harvard Business Review, called “The Four Faces of Mass Customization.” At the time, Gilmore and Pine set forth four different customization classifications:
The Four Faces of Mass Customization
- Manufacturers and consumers work together to design and create custom products
- Today, this approach is often referred to as “Bespoke” customization
- Bespoke example: Formaspace furniture that is completely custom made to the customer’s exact specification
- A self-serve model where consumers can customize products to their liking during the order process or later in the field
- Today, this approach is often referred to as “Mass Customization”
- Mass customization example: Formaspace standard office products, which can be customized during the order process using our 3D Configurator as well as modified and accessorized in the field
- Manufacturers present the products in unique ways through differentiated packaging and sales channels
- Cosmetic customization examples: monogrammed clothing or repackaged goods sold through monthly subscription sales, such as BarkBox and BirchBox
- Manufacturers create personalized product offerings based on their observations of individual customer needs
- Today, this approach is often referred to as “Mass Personalization”
- Mass personalization example: Websites that track your interests and use a suggestion engine to present you with custom shopping recommendations
Let’s look at more case studies to see how mass customization works in practice.
PRODUCT CUSTOMIZATION EXAMPLES FROM LEADING MASS CUSTOMIZATION COMPANIES
One of the giants in the world of mass customization is the $2 billion dollar printing company Cimpress, founded by Robert Keane. Haven’t heard of Cimpress? Well, you’ve probably heard of their main consumer-facing brand, VistaPrint, which offers online tools to help its customers order customized business cards, brochures, and other marketing collateral over the internet.
Armed with over 200 patents, Cimpress has revolutionized the short-run press business. It now has over 10,000 employees located around the world that serve nearly 17 million customers. In 2016, Cimpress handled more than 30 million orders and produced 46 million customized items.
Other sectors that have seen great innovation in mass customization are centered around goods that require specialized fitting, such as sporting goods, footwear, eye-ware, and clothing. Here are a few of the leading mass customization companies in these areas:
Clothing: Ministry of Supply
Hybrid online and brick-and-mortar retailer Ministry of Supply hopes to produce up to one-third of its knitted merchandise, such as men’s blazers, using a $190,000 Japanese-made 3D knitting machine. The advantage of this manufacturing method is it eliminates the need for cutting and sewing pieces together, e.g. there are no seams and no waste material.
Eye-ware: Warby Parker
Founders Neil Blumenthal and Dave Gilboa have grown this startup eye-ware company into a billion-dollar brand selling millions of pairs of custom glasses in the U.S. via their online channel.
Footwear: Nike’s NikeiD Brand
Nike’s NikeiD brand allows consumers to personalize their shoe orders online. This is a major initiative as part of the company’s transition to direct-to-consumer (DTC) sales, which now represent up to 22% of Nike’s revenue.
Footwear: True Gault
Sandra Gault has taken her experience at Warby Parker and Dollar Shave Club to start a new company focused on making customized high heel shoes for women. This New York-based startup used an iPhone camera app to capture a true size 3D model of women’s feet, allowing for a more natural, custom fit.
Sporting Goods: Atomic Skis
Outdoor sporting goods innovator Atomic allows you to design your own personal pair of skis online, including all colors, textures, and design elements.
FORMASPACE OFFERS EXTENSIVE CUSTOMIZATION OPTIONS FOR STANDARD PRODUCT LINES, PLUS FULLY CUSTOM HAND-MADE PRODUCTS
What is Formaspace’s approach to mass customization?