The first time Ed Schmults, CEO of outerwear company Wild Things, proposed allowing customers to design their own jackets, some employees strongly resisted. Designers fretted that people would create abominations and damage the company’s brand. Production staff said individually customized manufacturing wasn’t feasible. “People had to be willing to surrender some control to consumers,” Schmults says.
The development he glommed onto is known as mass customization, a radical shift from the mass production that has dominated manufacturing since the days of Henry Ford. Instead of a one-size-fits-all approach, mass customization lets consumers tailor products to their own specifications, be it the fabric in their clothing or the ingredients in their tea. The concept has been touted for decades—it was popularized in a 1993 book called Mass Customization: The New Frontier in Business Competition—but only recently has technology made customization cheap and easy enough for businesses to adopt on a large scale.
For global brands, customization can ward off the threat of commodification. Anshuk Gandhi, an associate with McKinsey & Co., says that because so many products are standardized today (even different smartphone makers offer similar hardware and features), brands end up competing on price, damaging their own profit margins. Instead, he suggests, “compete on how well [you] cater to the needs of each consumer.” Young people expect as much: Facebook, Twitter and other social media allow them to curate their lives, instilling the idea that products and services should be personalized too. And shoppers are willing to pay for the benefit. A study by Bain & Co. found consumers will pay 20% more for products incorporating customized elements.
Tailoring goods to individual specs is increasingly affordable. Typically, a company needs an online interface so consumers can configure a 3-D model of a product. MyCustomizer, a Montreal startup, can build and service such a tool for $99 per month (plus a 4% fee on transactions), and have a demo ready in a week. “We saw the chance for our platform to democratize mass customization and make it available for smaller brands,” says co-founder Renaud Teasdale. In the past three years, MyCustomizer has signed on clients ranging from a U.S. hat company to a lacrosse equipment manufacturer.
The evolution of 3-D printing will give mass customization another big push. Over the next decade, as the technology becomes cheaper and more sophisticated, 3-D printers will replace offshore suppliers for some product categories, encourage local manufacturing and simplify supply chains.
But before jumping on the trend, companies need to consider how to make customization truly useful to buyers. “We still have rather little customization in the consumer-goods space with regard to functionality,” says Frank Piller, who serves on the Smart Customization Group at MIT. And that’s where real value lies. Piller points to Nike as an example of how to take the concept further. Nike has a service allowing customers to personalize running shoes, sure. But that service ropes buyers into the Nike ecosystem, which also includes apps and the wearable FuelBand performance monitor.
In the food industry, German website Mymuesli has been a mass customization pioneer, enabling people to choose from dozens of ingredients to create their own cereal mixes. The site is particularly useful for those with food sensitivities. “There is a huge market opportunity with functional foods and drinks,” Piller says. Adagio Teas in the U.S. now provides a similar service for loose-leaf tea.
Schmults eventually overcame the internal opposition at Wild Things. The Rhode Island company now offers three garments that consumers can customize through its website, choosing the fabric and colour, deciding where to place a pocket and whether to include a hood, among other features. Over the past three years, customized products have grown to account for 25% of the company’s online sales.
Getting there wasn’t easy, Schmults admits. “You get allies and gain momentum so even when senior people are against it, you can bowl them over,” he says. Aside from the initial pushback, the company had to find a manufacturer that could quickly produce a variety of garment styles.
The next step for the apparel industry is customized fit, says Schmults: It will be common for consumers to use their computers or devices like Microsoft Kinect to scan their bodies, send the data to a clothing company and receive a tailored garment. “I would encourage companies to consider mass customization,” he says. “Today’s economy is about letting people get what they want.”