Technology has changed the face of retail to such an extent that it is becoming possible for consumers to get just about whatever they want, however they want it. Sometimes this means paying a steep price, and sometimes it’s just a natural benefit of a shift in the traditional approach to retail. But while choice abounds, access to great products is not enough.
In a market that favors the consumer, affordability is an increasingly important factor. To stay competitive, brands must innovate, finding creative ways to live up to their customers’ demands and exceed expectations on product, service, and price point. In other words, the customer rules and it’s up to companies to deliver.
So how can one brand set itself apart from the rest? When it comes to fashion, people are increasingly interested in wearing clothing that is unique; things that are made just for them. At J.Hilburn our business is based on giving individuals a completely personalized shopping experience, and what we’ve learned is that there is a huge demand for customization. Whether the purpose is to find the most flattering fit, or to wear something that no one else can get their hands on, customization allows people to find their ideal style. But this is starting to seem obvious.
Of course there is nothing new about the idea of customization--it’s been the style of choice for those who can afford to splurge since long before today’s most influential designers were around. What’s new is that there is now an opportunity for companies to offer quality custom apparel at a price point that’s actually accessible to more than just a small corner of the market.
By rethinking traditional business models, leveraging technology, and getting to know what the customer really wants, companies can deliver custom options in a range of categories at affordable prices. Imagine customization at a massive scale.
The first key is to develop a vertically integrated supply chain, which strips down the costs of distribution. Traditional retail has efficiencies of scale when it comes to producing and selling mass quantities of generic goods, but with this model a garment can pass through a number of middlemen, who will each take a cut and drive the final sale price upward, or alternatively force quality down on the production side. In mass production categories such as apparel, every party in the supply chain takes inventory risk. In today’s world of promotions and sales, retailers have to make excessive markups, because they know they will have to offer sales and markdowns to ultimately sell their products.
When it comes to creating very high-quality garments with attention to detail, there are immense benefits to going straight to the factories that are producing your garments, and selling direct to the customer. Vertically integrated companies can offer better value by finishing goods upon order, instead of flooding the shelves with products that they hope will appeal to the greatest number of people. In the case of customization, this approach enables you to shorten turnaround times and cut the costs of individually tailored orders, in order to keep prices well below what you would expect to pay for a similar quality custom garment. In other words, a well-planned supply chain creates value that can turn custom from a splurge to a habit.
The second step is to understand how technology can help and hurt your business. On one hand, technology is making it faster, easier, and more affordable than ever before to make clothing. Enterprise solutions allow us to manage the manufacturing and distribution process from design to construction, to inventory, shipping, and fulfillment, all with incredible efficiency and accuracy. Brands can take a product from an idea to the customer’s hands in a fraction of the time that you would have expected 5-10 years ago.
On the consumer-facing side, user experience technologies are making it easier for customers to see a full array of options and make informed decisions about what to buy, without getting overwhelmed by choice. To create a high-quality experience, it's worth investing in the development of web and mobile applications that enable customers to choose their preferences and instantly place orders online.
To give an example, NIKEiD allows customers to use a seamless online customization tool to find their ideal shoe, choosing from a range of colors, styles, and details, and watching their design take shape on the screen as they make selections. Social sharing features then encourage users to send a picture to friends or post on social profiles to get advice, tapping into networks of potential future customers and encouraging the initial user to take the leap from creating a virtual shoe to making the actual purchase.
On the flip side, technology can also pose challenges to companies offering a new retail experience. Although e-commerce is taking an increasingly large bite out of traditional retail sales, consumers are still accustomed to touching, testing, and trying things on before they buy, and the leap from browse to purchasing can still feel like a risk. This puts the impetus on brands to find innovative ways to help customers feel confident about their purchase, whether this means experimenting with digital technologies to help people understand how an item will fit, or creating opportunities for consumers to experience the product offline through experiences like pop-up shops, showrooms, or direct selling.
The final key is to know what’s important to your customer. This is not just an important factor in informing basic marketing decisions. It is also a critical step in understanding where it’s worth spending a little extra to offer custom options, and where it’s more effective to set a standard. Sometimes options add to the quality of the customer’s experience, but they can also become overwhelming or just unnecessary. The question to ask is, "What value does the customer gain when given each particular custom option?" Because every layer of customization adds complexity to the supply chain, it's essential to determine what you can and cannot do without.
In the case of custom-designed running shoes, for example, it may be that most consumers are very interested in being able to choose from a wide range of colors, but not very concerned with being able to customize other options such as the types of fabric and custom sizing. If this is the case, Nike could optimize profits by limiting the range of fabrics available or charging a bit extra to customize this particular option. At the same time, the process of designing a shoe is simplified, and it becomes that much easier for the customer to feel good about making the purchase.
Custom Today and Tomorrow
The global marketplace has changed, and so have consumer expectations. Apparel and footwear are just a couple of examples that show the demand for more personalized retail experiences. The automotive industry was a pioneer in mass customization, with companies like Toyota offering buyers the option to tailor their vehicle to meet their exact needs. Starbucks and its competitors have created a culture of coffee drinkers accustomed to personalizing every aspect of their beverage from the caffeine level to the temperature. You can even order custom chocolate and granola bars online.
The time is right to develop new custom offerings, and the next big thing could be just a matter of imagination. It all starts with finding out what customers want, and then working backwards to figure out how to bring it to life and get it into people’s hands.
[Image: Flickr user Dustin Gaffke]