What is Mass Customization?
So, what is mass customization exactly? Product customization is the art of modifying a product to meet individual preferences and requirements. Mass customization is a production and marketing strategy that allows companies to offer personalized or customized products to individual customers while maintaining mass production’s low cost and efficiency.
Mass customization allows custom products businesses to offer high-quality, personalized products on a large scale. So, what is the goal for mass customization? Mass customization strives to strike a balance between providing customers the individualization and personalization they desire without sacrificing the efficiency benefits of large-scale manufacturing.
Understanding Mass Customization
Mass customization was first identified in “Future Shock” by Toffler (1970) and was later described in “Future Perfect” by Davis (1987). Davis coined the term “mass customization.” He referred to mass customization when “the same large number of customers can be reached as in mass markets of the industrial economy, and simultaneously then can be treated individually as in the customized markets of pre-industrial economies.”
In other words, mass customization aims to deliver products and services that best meet individual customers’ needs with near-mass product efficiency (Tseng, et al. 1996).
Indeed, mass customization is a business strategy that combines the positive aspects of both mass production and customization. Its objective is to manufacture cost-effective custom products, achieved by a scale of economy in production and catering to the needs and preferences of customers.
Types of Mass Customization
Joseph Pine II and James H. Gilmore identified four faces of mass customization in a Harvard Business Review article published in 1997. According to Pine and Gilmore, the types of mass customization are collaborative, adaptive, cosmetic, and transparent customization. An additional form of mass customization that we will discuss is functional customization.
Collaborative customization, also known as co-creation, is a form of mass customization where customers play an active role in designing and developing a product or service. This means that, instead of simply choosing from predefined options, customers can interact with the company to shape the product to their specific needs and preferences.
Businesses empower their customers with the opportunity to personalize their products to suit their preferences. This strategy significantly increases customer satisfaction and the purchasing experience as they work together in co-creation.
Collaborative customization is one of the primary types of mass customization strategies used by businesses nowadays, including giants like Nike. Nike’s shoe customization process that enables customers to choose the colors on their sneakers is a prime example of collaborative customization.
Adaptive customization offers one feature that can be altered on a product. In this type of customization, companies provide a standard product that can be easily adapted or modified to meet individual customer needs. Being able to customize one feature gives customers a say in their final product while allowing the company to have a streamlined manufacturing process.
A practical example of this type of customization is adjustable light bulbs. These enable each buyer to create a personalized ambiance in their room by altering the bulb’s color. This type of customization gives customers a sense of personalization without significantly changing the manufacturing process.
Cosmetic customization is the process of modifying the appearance of a product without altering its underlying functionality or core features. An example of this type of customization can be found in product packaging. Indeed, by adjusting the representation of a product by implementing unique packaging, different formats, or even personalized touches such as labels, companies can make the product resonate with different customers.
An example of cosmetic customization is Coca-Cola allowing customers to personalize their cans with their names or messages. This is popular for parties, weddings, and other special occasions. Coca-Cola also offers different bottle sizes to its customers, ultimately catering to their diverse needs and preferences.
Transparent customization offers customers a seemingly standard product without highlighting that it has been subtly personalized to their needs or preferences. The transparent customization method is particularly effective when a customer’s requirements can be anticipated or determined.
Examples of transparent customization abound in the tech world. For example, Netflix uses algorithms to personalize movie and TV show recommendations based on each user’s viewing history and preferences. Spotify creates personalized playlists for users based on their music preferences and listening habits. Social media platforms like TikTok, Facebook, and Instagram use algorithms to personalize newsfeeds based on users’ interests and interactions.
Functional customization adapts how a product works, altering the core functionality or capabilities of a product to meet specific individual needs. In contrast with cosmetic customization, which focuses on the appearance of a product, functional customization affects a product’s performance.
Examples of functional customization can be found in the healthcare industry. Medical equipment such as hearing aids and wheelchairs can be customized to individual patient needs and conditions. In addition, prosthetics are often customized to specific physical needs and abilities, ensuring optimal fit, functionality, and comfort for the user.
The Evolution from Mass Production to Mass Customization
The evolution from mass production to mass customization marks a significant shift in manufacturing paradigms. This transformation began with Henry Ford’s mass car production. After World War II, the demand for different products surged, introducing the assembly line, famously depicted in Chaplin’s film “Modern Times.”
Henry Ford, the pioneer of mass production, even said, “Any customer can have a car painted any color that he wants as long as it is black.” Early mass production aimed to swiftly produce basic items in large volumes and offer limited options for consumers to choose from. This meant that consumers had to settle for available products without the ability to modify them to their exact preferences and needs - a limitation overcome by modern customization.
Mass customization emerged in the late 1980s as demand for product variety increased. Since then, consumer product manufacturers have substantially increased the varieties they offer. For instance, the number of unique car models in the U.S. has risen dramatically from 1969 to the present day. Driven by the increasing desire for diversification and technological progress, the mass production model started transitioning into what we recognize today as mass customization. It’s perceived as an evolution from the mass production model rather than an entirely distinct concept.
The Goals of Mass Customization
So, what is the goal for mass customization? We’ll explore some of the central purposes of this process below:
Produce custom goods. Of course, one of the main aims of mass customization is to offer consumers customizable goods to better meet their needs and preferences, which was limited by traditional mass production. In particular, mass customization enables companies to provide an optimized customer experience and better understand their clientele, ultimately increasing customer loyalty.
Reduce costs by improving manufacturing efficiency. Another main objective of mass customization is to reduce costs. Companies can reduce inventory costs by moving from a “made-to-stock” model to a “made-to-order” model. This cuts down on storage and maintenance costs and minimizes the risk of obsolescence. Companies, such as Hewlett-Packard, can also achieve budget reductions by implementing the “postponement” strategy, which aims to delay the customization part of the creation process in the supply chain as long as possible.
Gain a competitive advantage. Offering custom goods to your customers can make your business stand out from competitors in a crowded market. As more and more people acknowledge the need for custom goods, companies that offer personalized options attract and retain more customers.
Increasing sales. Since customization enables businesses to meet specific customer needs and add value, this leads to higher customer satisfaction, loyalty, and sales. Satisfied customers are more likely to make repeat purchases. They are willing to pay more for an item that fulfills their requirements. Moreover, customization allows businesses to differentiate themselves from competitors, offering unique products or services that cannot be found elsewhere. This uniqueness can be a crucial selling point, enticing more customers to choose your products or services over others.
Tips to Successfully Implement Mass Customization
Although getting started in mass customization may seem complicated, it doesn’t have to be. Now that you have a deeper understanding of mass customization, you can implement it in your business. Try these strategies to make mass customization work for your company:
Understand Your Customer
In an interview for StylePark, Prof. Frank T. Piller, Co-Director of the Institute for Technology and Innovation Management (TIM) at RWTH Aachen University, is asked about the conditions required for manufacturers to offer customized mass production.
Pillar explains that whether mass customization works depends a lot on the specific industry. While technology has made it easier to create custom products, getting it right still requires understanding your customers. Some companies offer customization options that nobody actually wants but offer a novelty factor. This might work for a short time, but people won’t stick around for long. The reason is that traditional market research tries to find similarities between customers to group them together. However, successful mass customization relies on finding the differences between customers and making products that suit those individual needs. This sounds simple, but it can be quite challenging in practice.
For mass customization to be successful, it’s essential to know your consumers and their needs and to segment the market to distinguish between groups who want different levels of customization.
Don’t overwhelm consumers with too many custom options, as excess choices can trigger decision fatigue and potentially lead to cart abandonment. Instead, simplify the customization process by offering custom options most relevant to your customers.
Use Advanced Technology
Since the main aim of mass customization is to streamline the manufacturing process, it’s crucial to leverage advanced technology. These technologies can include AI and machine learning for predictive modeling, automation technologies for faster and more accurate production, and advanced software systems for managing orders and inventory. Moreover, having an efficient supply chain through a robust logistics and distribution network is also crucial to delivering custom products on time.
The trend towards personalized goods shows no signs of slowing down, as evidenced by the projected growth of the customized gifts market, which is set to surpass USD 38.66 billion by 2027 at a CAGR of 5.83%. Therefore, a significant opportunity exists for businesses to embrace mass customization to start reaping the rewards of all the benefits mass customization offers.