Forget mass production, it’s all about customisation now

20-Mar-2014

Are we at the start of a new industrial shift?

Are we at the start of a new industrial shift? Is the developed ‘business world’ moving into what would be the third industrial revolution? These are just a few of the topics being discussed as we see the reliance on internet based communication devices continually increase and ultimately change the way the world does business. With the technology available today there is a multitude of different communication mediums; you can email, call, Skype, IM, text and so on. The ways in which information can be shared between different people is forever growing; this in turn is changing consumer demand.

It is becoming easier and easier to gather data from consumers because of the increased communication methods; could this result in the beginning of the end of mass production? We are starting to see more industries offering the option to customise their products; this has spread from the clothing industry through to the automotive as having something that is bespoke to you as an individual becomes the ‘in’ thing. At the end of the day we are all individuals with our own styles, why would we all want to look the same?

A few examples of this change to being able to customise products include Nike, who in 2000 introduced the ‘Nike ID’ range where customers could design their own trainers. Following on from this we have seen various other sporting brands offer the same idea behind their products, something which has become extremely popular, particularly within football. Like with the above the same has happened within the automotive industry. Not so many years ago cars would be mass produced in a few selected colour, I can remember as a child that everyone seemed to own a Vauxhall Cavalier and it was always in one of three colours, White, Green or Grey and every now and then you would have the daring individual who would go for something unthought-of like purple! How times have changed, when you walk into a car showroom now you can customise almost everything about your new car. The colour, the trim, the seat material, alloys, lights... you name it and it can probably be customised. This is evidence of the change in consumer demand; customers no longer want the norm, they want something customised and unique to them. With the developments in technology and the ability to share data at the touch of a phone screen the ability to manufacture a customised product is not as complex as it once was.

So we are seeing a shift from mass production to mass customisation, something which has been investigated by the European Union. The EU carried out a study on the clothing industry and how online clothing companies could ‘increase their conversion rate by two times and reduce their item returns by 10%’ by offering the option to customise their products. So, the big question is whether this could work within the personal care and cosmetics industry. In a previous article I discussed the Concoction product range and how they approached the idea of having a personalised hair care range. This has worked well for the brand and it has provided them with a niche within the market. However, the big question is whether this would be practicable for an industry where mass production is vital in driving down the unit price.

To start with let’s look at this from the consumer’s perspective. I have heard people saying time and time again how companies don’t get what they want and how the products that are on offer just aren’t quite right. Consumers always want a product that is specific to their individual taste. Taking this into consideration and conversations I have had with other industry people there definitely is a demand for products that are bespoke to the customer. This is something which is more prevalent with cosmetics in comparison to personal care items, but there certainly is a market there.

Having established that there is a potential market, how feasible would manufacturing bespoke cosmetics be? Speaking from a cost perspective, not very. As you will all know, the cosmetic and personal care industry is all about economies of scale, the more you order the cheaper it is. If brands look to offer bespoke products, the demand for a particular range (colour, fragrance etc) will not be as high in comparison to the generic option because everybody likes something different. So should a brand look to offer the option to have a unique product then the consumer will need to be prepared to pay a premium for this! Due to the nature of the personal care and cosmetics industry, in order to make this a feasible idea I think that a brand would need to limit the options available to the consumer. This way a brand can find a happy medium; on one side they offer the consumer with the ability to mix and match their products to create something that is bespoke and specific to their tastes. Whilst from a manufacturing perspective, if you have a limited number of ranges (SKUs) then you can still look to manufacture ‘larger’ quantities and be able to achieve a competitive price.

I think that while there may be a demand for a design-your-own style cosmetic/personal care product, we are still a little way off from this being a reality due to the cost implications. However, as technology improves and market trends and consumer tastes can be monitored in more detail I think that it will only be a matter of time before the customisation of cosmetics becomes a reality.

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Let me know your thoughts on the feasibility of customisation and whether this could become a reality for the personal care and cosmetic industry by tweeting @expac_preston with the hash tag #customise

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