By: Helén Anderson
Emotions, empathy, connection, love, storytelling, self-care – I am referring what I heard about the consumer. Creative revolution, democratization, social innovation, experience, passion – I am referring to what I heard about innovation.
At the 2011 World Conference on Mass Customization, Personalization and Co-Creation in San Francisco the theme of the two days for business was Mass Customization and Open Innovation November 16-17th 2011 and a range of interesting presenters from many companies were there. I had the opportunity to be present and will give you a personalized presentation of what I heard.
It is not about the masses it is about Me. Individualization is a trend also making new business models. The company Gemvara is providing customized jewelry through its website as the only sales channel. The company illustrates the importance of the meeting and interaction with each customer as an individual and use the concept: Me-commerce to illustrate it. Customization is really about personalization – giving each customer the help and support in designing its own unique purchase.
Purchasing is not only about being rational – as all textbooks say – the emotional part of consumption is emphasized by several of the companies. See the interaction process as consisting of phases of emotion and rationality interchangeably. If you are to purchase a gift for example, you probably start off in an emotional state: I would like to give him…Then turning into a more rational phase: What would she need and appreciate?… And end up in an emotional phase being pleased about the gift you just ordered. So is your sales process organized to meet those individual needs and emotions?
Customers today are not only interested in what they buy but also in how the product is produced. Following the phase of outsourcing and offshoring may come a phase of home sourcing. I have named the phenomenon to exemplify what may be the activity several companies evolve into after experiencing difficulties with manufacturing far away. That was not the reason for the company Rickshaw Bagworks though. They found that it is not economically sustainable to give the customer all possible product variations but a range of them. The company’s offered range is determined by a basic design made by the company. Within that range the customer has a wide possibility to choose from. In that way the company can benefit from sourcing components from overseas but still have an assembly of custom made products locally. And guess what? They have learned that the customer appreciates to come and visit and experience the assembly!
Customized food – is that available on the market? Yes, it has become a huge success for the company YouBars that actually produces bars custom-made for customers who appreciate having their choice of ingredients and spices in the bars as well as having their names on the packages.
Customers want to design but not all customers are good designers.
Customers want to design but not all customers are good designers. So you need to design your customization so that the customer perceives that he or she has the possibility to make it their own, while you ensure that what they order really can be made according to the quality and safety standards you must follow.
Also customers – when asked – want to have all the possibilities they can get in order to make a choice. However, when the consumers need to make a choice they often want advice. It’s important not to provide an infinitive range of choices but enough and ways to lead the customers in their selection process.
The virtual inventory is the no-inventory that frees up the inventory cost you would never be able to pay for having a range of possibilities any customer would like. So it is of key importance to build very good relationships to key suppliers.
Production processes and manufacturing is for mass production so we need to change not only our production facilities but also our mindset regarding how production and assembly can be done if customization is going to be a sustainable business model. Most metal components until today are casted and welded. But what if you were able to do it completely different? Additive manufacturing is an example of such a radical innovation on its way.
Customization is about acknowledging the individual as a social being. The customer likes to be passionate about products and services and to be recognized for it. That recognition comes from other people but can be part of the very design and purchasing process. If the customer has the possibility to interact with other customers and the seller there is opportunity for recognition already in the design part of the purchase. Being social also means that you can tell your story and have somebody to communicate with. So let your customers and designers become known on your websites.
Shopping patterns can also be found on webpages. There is software available today enabling you to analyze how different customers move around on the website, how they combine items and how they design. The data is already on your website. By analyzing it you can learn from your customers – almost for free. Customers can not be segmented with traditional measures in the virtual world. A creative designer can be a teenager in Africa or a college student in China. The company representative from TechShop even claimed that most future innovation will not come from any R&D departments, they will come from creative people given the tools to realize their ideas.
By Helén Anderson
About the author
Dr. Helén Anderson is professor in Business Administration at Jönköping International Business School and presently a visiting scholar at SCANCOR, Stanford University. Her current research is focused on the market dynamics of business relationship, and on how new technology makes its way to the buyer and user.