Binomial Innovates -
Binomial is an innovation consulting firm helping clients be disruption-ready
June 3, 2021
Ford’s breakthrough in the assembly line in 1913 disrupted the automobile industry, reducing the time needed for the production of a car from more than 12 hours to 93 minutes. This development in production subsequently scaled to other industries as well, revolutionising the way factories utilised labour, as well as the maximum output of factories.
Across industries, custom-built options were soon abolished in favour of standardised products. This standardisation of products allowed factories to churn out a consistent quality of product that did not require different equipment and factory lines.
The one-size-fits-all approach worked, and it worked well enough that it outweighed the benefits of a customised product that would take significantly longer to produce. However, today, improvements to technology and changing consumer landscapes have seen a drastic shift back to a preference for customisation. Customers want to be treated as unique individuals, and they want it now. That is why mass customisation has taken the world by storm.
Mass customisation involves the modification of components of a product to satisfy a specific customer’s needs, at scale. It seeks to combine the flexibility and personalisation of custom-made products with the low unit costs and efficiency of mass production.
Since mass customisation revolves around the customer, we will be using design thinking’s “Desirability, Feasibility and Viability” framework to look at how mass customisation benefits customers, and in so doing benefits businesses as well. Design thinking is an iterative process in which we seek to understand the user, challenge assumptions, and redefine problems in order to ideate solutions that may not be immediately apparent with our initial frame of understanding.
The rapid pivot to mass customisation can be explained in part by the shift towards consumer-centric business models. The spending power of consumers has increased, and with it comes greater expectations from brands. In the retail industry where consumers are spoilt for choice, brands that provide value-added services and products beyond what their peers are doing will find success over their competitors.
Consumer-centric businesses placing the customer at the core of their business build positive experiences and long-term relationships between the customer and the brand, setting them apart from their competition. As mass customisation becomes increasingly commonplace, the benchmark to join consumers’ consideration set has been raised, and run-of-the-mill products may see a decline in sales more quickly than they expect.
However, all’s not doom and gloom for merchants who have yet to adopt mass customisation. The pivot to it is easier than you may think, particularly if you manufacture your own products.
While it was not economically feasible in the era of factory-line processes, modern advances in manufacturing allow for mass customisation at a relatively low cost. With increasing rates of investment in advanced robotics, manufacturing and advanced digital simulation of manufacturing processes, manufacturers can expect shorter production runs and more unit-level customization at close to the unit costs of conventional mass production. This makes the pivot to mass customisation that much more feasible for businesses.
If brands are unable to manufacture their own products, outsourcing customised manufacturing may still be an option. When outsourcing to professional service providers, businesses gain access to the expertise and tools that are not available within their organisation. Companies like Apple have long outsourced manufacturing in order to reduce costs and maximise efficiency, yet are still able to provide a certain degree of customisability during assembly.
To be fair, just because it’s feasible doesn’t mean mass customisation is for all businesses. Despite advances in manufacturing, conventional mass production still remains cheaper. Businesses that offer low value items or compete strictly on price may face challenges with the increased costs of production. Also, businesses have to anticipate returns of customised products which may be difficult to sell to a different buyer with their own preferences for customisation. To circumvent this, most businesses offering customisation either have a restrictive return policy, or need to factor in the anticipated loss.
Mass customisation can bring value to both large companies and small businesses. A study by SuperOffice found that 86% of consumers are willing to pay more for a great customer experience. Aside from spending more, personalisation also affects the purchasing decision itself, as seen in a Segment survey where 63% of millennial consumers have made an impulsive purchase based on a personalised recommendation. For businesses, what this means is that allowing for customised experiences and products increases your value to customers, and their likelihood of purchase.
According to Forbes, brands that have more personalised customer experience bring in 5.7 times more revenue than their competitors. The benefits of mass customisation are compelling in that it has proven to be a profitable initiative that boosts the customer experience, brand loyalty, and ultimately revenue. To stay ahead of disruptive changes, brands must harness the new technologies to cost-effectively meet the changing needs of consumers or risk being left behind.
Binomial is an innovation and creative consultancy. If you want to gain market share by offering mass customisation, get in touch and we can help you figure out how.
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