In today’s guest post, Embodee takes stock of the growing popularity of online product customization, focusing in particular on the apparel and footwear industry. The company’s writer and editor, Michael Bales, examines the trend from both the perspective of consumers and industry insiders.
Years hence, 2019 may well be remembered as the tipping point for online product customization, especially apparel and footwear. Consumer interest, even demand, for the option to personalize products based on individual tastes has reached critical mass. Thus, brands and retailers are increasingly recognizing the need and responding to the opportunity.
This shift has been a long time coming. For more than a quarter century, academics and consultants have heralded a coming revolution that would usher in an era of mass customization, producing a richer variety of goods based on consumers’ individual design tastes with the same efficiency as mass production. In essence, every shopper would become a market of one.
Only five years ago, Siemens USA CEO, Eric Spiegel, declared that U.S. manufacturing was in the midst of a software revolution that would lead to global mass customization of products. The same year a Time magazine article proclaimed: “Soon You’ll Be Able to Order Anything, Exactly How You Want.” Forbes weighed in: “Having It Their Way: The Big Opportunity in Personalized Products.”
The trigger for the optimistic coverage appears to have been a widely cited Bain & Company survey of more than 1,000 online shoppers. The survey found that less than 10% of consumers had tried customization options, and only 25% to 30% were 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,” the Bain analysts wrote at the time. It was a sit-up-and-take-notice number.
However, achieving the extent of change that experts foresaw depended on many moving parts, including in the apparel and footwear industry, historically known for its resistance to change. Now the industry is moving more rapidly to revamp the processes of a fading analog world, soldiering through the disruption that comes with adopting new technologies and methods for design, manufacturing, supply chains, and many things in between.
In the wake of the Bain survey five years ago, the results of more recent research into attitudes among consumers and industry insiders alike have also turned heads. The results document that the shift to customization or personalization has not only progressed significantly, but will also certainly continue to grow.
A different kind of consumer
The findings coincide with steady annual increases in e-commerce. Last year, for example, apparel and accessories bought online in the U.S. accounted for 34.4% of all such sales.
Last year, an analysis of U.S. consumer perception about personalization by a global public opinion and data company, YouGov, found that 26% of U.S. consumers had personalized products and services. That compared to 17% in 2015. The percentage of personalizers was even higher for apparel and footwear, 29%. More than two-thirds of that group said they’re willing to pay more to personalize apparel and footwear.
YouGov found that 40% of personalizers are millennials, 30% are highly educated, and 31% have $1,000 or more of monthly disposable income.
Why do they want to customize what they buy? Among the reasons: to design a product to meet specific needs, demonstrate creativity, and stand out from the crowd.
“It’s clear that there’s a core group of consumers dissatisfied with standard, ‘one size fits all’ products,” the analysis found. “Consumer appetite for personalization, once whetted, continues to grow, due to high interest in personalization as a topic and a willingness to pay for personalization as a premium offering.”
YouGov also concluded that, from an opportunity perspective, “brands can get closer to their customers by using personalization as a transformative tool, one that turns a product into a shared experience using a brand’s resources and consumer’s sense of identity.”
Writing about the findings, Industry Week said: “In fact, ‘off-the-shelf’ is beginning to sound substandard. We all seem to want products personalized and right-sized to fit our preferences, personalities, and lifestyles.”
Academics have explored the psychology underlying personalization and customization. One study labeled the appeal to consumers as the I Designed It Myself Effect. The consensus: shoppers’ sense of ownership is stronger if they configured a product online. They didn’t merely buy it, they accomplished something creative. And if they see their design as a self-expression of their public identity, the deeper their connection to the product and the brand that made it. These factors add up to greater value for buyers and sellers.
In the survey of industry insiders, online magazine Sourcing Journal and technology company Lectra questioned 308 people working across the apparel, accessories, and footwear sectors. They were asked about “opportunities and obstacles the industry faces as it works to deliver goods that fit consumers’ individual styles, budgets, and need for instant gratification” and their views on “personalization business models like mass customization and made-to-measure at retail.” Of the respondents, 44.5% were decision makers and half were described as influencers. Among the findings:
- 9% said consumers expect customized apparel and footwear options. One reason: consumers see big brands such as Nike and Zara giving them this ability, so they “expect it from other companies, especially smaller ones that can provide small-batch productions or hand-detailing.”
- 88% said they believe shoppers will pay a premium for personalized goods, while 83.5% of decision makers said customization can improve profits via increased sales.
- 4% of respondents agreed that mass customization is “essential” or “necessary” for at least parts of their business.
Some industry experts touted other benefits of moving to customization: making products on-demand reduces overhead costs such as warehousing of large inventories and shipping costs from China.
Another advantage: the customization process creates a wealth of data from consumers about their design tastes, Matt Field, President and Co-founder of MakerInsights, told Sourcing Journal. This could enable brands to streamline design and planning processes, leading to faster product release cycles and reduced time to market.
Given the transformational changes triggered by technology advances, it is not surprising that the survey also disclosed some hesitations:
- 6% said their companies aren’t likely to implement mass customization or made-to-measure models until they perceive demand is sufficient. (Some apparel and footwear veterans said the industry needs to do more to increase demand.) The survey didn’t distinguish the degree of reluctance in deploying mass customization versus the more disruptive made-to-measure.
- 5% said the benefits to the bottom line aren’t well understood, and money for needed investments is lacking.
Some respondents also said production and assembly are the biggest hurdles to progress. This is something the latest digital printing machine capabilities aim to solve, driving on- demand manufacturing and delivery of goods at speeds previously not possible.
Decision makers were more likely to say mass customization is necessary, the survey concluded, and it will become mainstream in two to five years.
Are we all on the same page?
The best gauge of how much online product customization has advanced in the global economy is how many brands and retailers offer customizable products online. But a comprehensive count isn’t available. However, the Configurator Database Project, started in 2007 and maintained by cyLEDGE Media in Vienna, Austria, gives a glimpse.
Earlier this month, the database, searchable by 17 product categories, showed 1,331 companies that have listed themselves with links to their online product configurators. Four categories — apparel, footwear, accessories, and sportswear and equipment — account for 461 of the companies, or 35%.
The companies listed range from industry heavyweights such as Nike, Adidas, Under Armour, Gucci, Brooks Brothers, and Ralph Lauren, to an array of direct-to-consumer online firms, some well known to those serving narrow niches, such as UglyChristmasSweater.com.
Setting the stage for many more entrants into online customization, whether they sell intentionally tacky sweaters or luxury fashion, are a range of technology advances enabling increased efficiency and larger-scale operational excellence in manufacturing and supply chains.
Frank Piller, a professor of technology and innovation management at RWTH Aachen University in Germany and a pioneer in researching mass customization and evangelizing its benefits, has said these improvements mean manufacturers can handle a higher variety of demand — typically a cost driver — that goes hand in hand with mass customization.
“We should instead see high variety of demand as a profit driver, and do so by allowing for the input of each individual customer at the beginning of the value and supply chains,” Piller told the online publication Internet Industry Now.
“The concept of mass customization makes business sense in these times. Why wouldn’t people want to be treated as individual customers, with products tailored to their specific needs? But mass customization has been trickier to implement than first anticipated.
“The key to profiting from mass customization is to see it not as a stand-alone business strategy that is replacing today’s production and distribution systems, but as a set of organizational capabilities that can supplement and enrich an existing system.”