Friday, July 6, 2012

Do You Offer Mass Customization?


Among the many topics we discuss in this blog, we often write about differentiation and unique products.  One way to take this concept further is to implement mass customization – a way of allowing customers to select from a limited number of components to create product that is “their own.”  An easy way to think of mass customization is to visualize a food gift basket – individual items (e.g., candy, food products, cooking utensils) are bundled together in a container and then wrapped or decorated to match the theme.  Someone had to develop the idea/theme/look for the gift basket – why not let it be your customers?

So, what are some examples of mass customization?

Several retailers have done well with the concept and according to a 2011 Forrester report, and subsequent blog postings, “Mass customization is (finally) the future of products” (http://tinyurl.com/3mgxxoh).  Perhaps you have even been involved in mass customization yourself.
  • Have you ever created a colorful blend of M&M’s?  If yes, you had a mass customization experience.  There are 24 colors to choose from.  Not every imaginable color is available, but M&M’s is probably pretty certain that most customers will find a mix of colors that appeals to them.  
  • Are you a devoted Converse sneaker customer – one that has a pair in almost every color or style?  Now you can design your own.  Again, you will 24 colors and 24 prints to choose from for the outside body of the sneaker and the same options for the inside, heel stripe, tongue, lining and other sneaker parts.  
  • Or, have you ever created a “My American Girl” doll for a young child?  You can select the hair color (10 options for blond hair), eye color (10 eye colors available for blond haired dolls), and hair styles (seven straight and three curly/wavy options for blonds).  








                                   What is the key to mass customization for small or independent ag. businesses?  

Limiting the number of options (e.g., colors, types of items) that the consumer can select from.

Why is this important?  If too many choices are offered it is likely that customers will be overwhelmed with what they can select from.  For American Girl, if all combinations were available (49 hair colors, 3 skin tones, 40 eye colors, and 40 hair styles) customers would have several thousand different dolls to choose from.  Most likely, the colors/prints/options available for mass customization are those that have been popular in the past.  By narrowing the options to a more manageable number the process is much easier for both customer and retailer– hence, it is called “mass” customization.

If you explore these or other examples of mass customization you may notice that the price point for the completed product is higher than off-the-shelf (not customized) products or the total price for all individual pieces used to make the final product.  Why is that?  Since you are offering customers a convenience (1. for assembling the components, 2. for coming up with the concept) and there are added labor costs for putting the final product together – you need to account for these “costs.”

So, what can an ag. business do to capitalize on mass customization?  

If you are not already offering customers the option to build their own gift basket – it is suggested that the interest in giving gift baskets will continue to be strong – this may be a way to foray into mass customization.  Gift baskets can be offered for a number of holiday (Valentine’s Day) and non-holiday (anniversaries, thank you) occasions.  So, the possibilities are endless.

Dean & Deluca is an example of a retailer that allows customers to build baskets in-store and on-line.  Consider a customer who wants to buy a thank you gift for a friend who is passionate about coffee.  Well, Dean & Deluca can help with that.  The gift giver starts the process by first selecting the container (limited number of options available).  Each container holds a certain number of items based on each item’s size which helps the customer determine how big the final gift will be and not overstuff the basket.  Wrapping and decorating finish the product’s look.

What are a couple of other mass customization options for ag. businesses?
  • Table-top Christmas trees have been a popular for a number of years – the convenience they offer customers is very appealing.  Consider offering customers the ability to designing their own decorated table top tree.  Allow them to select from three or four species, three or four decorations styles, and three or four container options.  
  • Offer customers mass customization for planters, containers, or small landscape designs. 

Look though your own inventory and think about how you could help customers create a product that has been customized - just for them.  

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