The most important step in product customization: thinking.
Companies typically view product customization as something that’s difficult, complicated, and only accessible to giant brands like Nike or Suit Supply. But that perception is wrong. Product customization can actually be done profitably at a small scale without huge upfront capital investments, if you understand the roadmap to implementation.
Moreover, if the novel coronavirus has made one thing abundantly clear, it’s that the fashion, footwear, apparel, and accessories industries have to change their business model if they want to thrive in the future. But you don’t need to be a shaman reading the entrails of a yak to have seen the signs even before the virus hit. Building up huge seasonal inventories and hoping that they’ll sell through is a terribly risky way to make money, even if COVID-19 doesn’t bankrupt or temporarily shutter your retail partners.
The alternative to traditional, large batch, long lead-time, mass production is a product development process and supply chain that’s fast and agile enough to deliver hot products quickly. Zara is often held up as a model of this kind of company, and leaving aside the very real issue of sustainability in fast fashion, the company is unmatched in those areas.
Most brands, however, have neither the ability (nor the inclination) to become another Zara. But that doesn’t mean they’re destined to live and die at the roulette wheel of mass production. Any company, no matter how small, and no matter how distant their supply chain, can step away from the seasonal mass production casino by embracing personalization and customization.
Here are the three steps you need to take before you embark on the journey.
Step 1: Where are you going? Establish a true north.
The first thing brands must do is establish a “true north” for their customization program. Establishing true north clarifies the meaning and purpose of the program, and creates alignment among all functions – finance, sales, marketing, IT, design, development, manufacturing, and supply chain. Some questions that you must answer before beginning the product customization program:
- What do we mean by custom? Is it a completely new product, new colorways, or just the embroidery of a customer’s initials?
- Who owns the customer-facing website? The marketing team? IT? Sales?
- What is the primary purpose of customization? Is it intended to be a significant driver of profits, or just a way to utilize obsolescent materials in inventory?
- Will you let consumers design their own products, or have your designers present a curated palette of products to them?
- Will you use the same factories for custom products, or a third party turnkey program? And how will you pay them for small-batch, custom work?
- How will you price custom vs. in-line products to consumers?
- Will you try to manage the process all on your own or get outside help?
Step 2: What can you do today? Assess current capabilities.
Once you know what “custom” means to your company, you must assess your current ability to deliver on that promise. Companies often err in assuming that they have the internal resources to provide custom products. But without walking through the end-to-end process, from design to delivery, you’re at high risk of disappointing customers. Consider these issues:
- Are your factories willing and able to manufacture single pieces?
- Do you have the technical capabilities to do basic customization (embroidery, sublimated printing, etc.), or do you have to outsource?
- Can your IT department design a consumer-facing configuration interface for your website, or will you outsource?
- Can your logistics provider handle a single item, or only container loads?
- Can your website accept credit cards from individuals? International payments? Venmo, Zelle, bitcoin, or other internet-based payment systems?
- Are you set up for direct to consumer sales, or only for B2B transactions?
Step 3: Don’t try to be perfect. Plan-Do-Study-Adjust.
The legendary engineer and management thinker W. Edwards Deming (credited with helping rebuild Japanese industry after WWII) emphasized the importance of the Plan-Do-Study-Adjust (PDSA) cycle. In PDSA you first examine the current situation (Plan); implement a new process or procedure (Do); examine the result (Study); and either expand the scope or make necessary changes (Adjust). The PDSA mindset means that each step you take is an experiment, rather than as something fixed and unchangeable.
Your product customization journey should be seen in this way – not as a one-time, perfect-from-the-start, immutable process, but rather as a series of steps toward the ultimate goal of being able to profitably manufacture and deliver the precise product that the customer wants. Once you begin, you’ll want to study and adjust the process to figure out:
- How do you enable the customer to order a custom product that they will happily pay more for?
- How do you reduce the lead time and deliver the product faster?
- How do you lower the cost?
- How do you capture and leverage information about consumer preferences and trends?
- How do you increase the variety of products available for customization?
- How do you increase the variety of personalization options?
Walk, run, fly.
The transition from mass production to product customization can seem as forbidding as the road to Mt. Doom in the Lord of the Rings. It’s certainly not without its risks. But if you view the journey as a series of smaller steps, and spend adequate time at the outset understanding where you are and where you want to go, you’ll be more likely to make the shift to product customization without wasting money and suffering catastrophic mistakes.
Want to learn more? Please contact us. We are here to help!