(originally published yesterday (May 12) on my Mass Customization Blog
Mass Customization has been preached for ages now, every time as a new ‘era’ of how things will be made. Hasn’t really happened. However, in the last year or so, we’ve seen a huge increase of mass customization companies pop up that are doing well. Customized products on the web are abound. What happened? And why now?
The reason why mass customization (or co-creation, or design-your-own) is trending again and with such force is a combination of DEMAND and CAPABILITY. I illustrated what I believe to be the causes of a recent increase in capability and demand in the image below:
Mass Customization is now easier to do (capability) and in higher demand. Reasons for that are the internet, social media, the recession and its impact on startup funding and brand loyalty, as well as the behavior of Generation Y.
Today, many more consumers expect to be able to design their own products.
The recession led to a strong decrease in brand loyalty (source: Reuters). A typical company lost the loyalty of more than half (!) of their customers, a lot of them (my guess) to private label. Instead of paying for a name, consumers are now hunting for value, and a product customized to your needs at a price similar to a mass produced good means increased value. At the same time, turning away from brands, consumers started to differentiate themselves more, and to start re-defining themselves. Mass Customization is a strong enabler of self-expression.
Also, Generation Y has more purchasing power now, and their often quoted “sense of entitlement” translates into their roles as consumers, too. The new consumer demands to have a product fit for their needs.
Finally, as Amy Vernon suggested to me in a conversation, social media is essentially customized/ personalized consumption of content. You have pre-selected the information that is fed to you via Twitter, Facebook etc. by choosing the people you follow. From the customization of information, it’s only a small step to the customization of other things you consume. And look at the recent growth of social media. Only a little more than one year ago, Facebook had half as many users as it does today!
In summary, an increased sense of power and desire for control by the consumer leads to a rise in demand for customized products
Today, it is much much easier to offer customized products at a fair price.
One huge reason for that is of course: The internet. Thanks to configurators on websites, what would have been an expensive consultation session 5 years ago takes only a few clicks today. Visualization of both the modules and the finished product is much easier thanks to technology.
Again, social media enhances the capability of producers to offer mass customization. Co-creation requires interaction between producer and consumer, and social media created a playing field where producer and consumer can meet and talk and get used to each other. That sets the stage and a base for a world in which consumers tell producers what they want done for them.
In my opinion, the recession also has to do with the increase of mass customization startups. The funding environment for startups dried up, and jobless graduates that turned to entrepreneurship needed to start a business that generated cash-flow quickly, and on-demand production does exactly that!
The aforementioned Generation Y is by the way not only a consumer but also often the founder of a mass customization company. People who ‘get the concept’ are now at an age where they graduated from college or grad school and are ready to go into business. And come to think of it - we (I’m one of them) were old enough to get the dot-com bubble, so as much as we believe in the internet, we like to have product that we can touch in our businesses. We are “good old” manufacturers (except that we’re not old).
I’d love to know if you can think of more/ other reasons why Mass Customization is such a hot trend right now. I think Mass Customization will be pretty hot for years to come