Personalisation and customisation emerging as vital business strategies. . .
Personalised, customisable products and services used to be the gold standard for consumer facing companies. Over the coming year, they will simply become standard. The days of the single item production line are long gone. Instead of following the crowd, consumers want products and services that work specifically for them. This is due to changing consumer preferences, and the development of the technology to respond to them. The more tailored user experience becomes, the more people expect these experiences to be built around them. Which industries are taking full advantage of these strategies to enhance their products and services? Should businesses look to give customers exactly what they want?
Personalisation vs. customisation
Although the two terms are used interchangeably, personalisation and customisation are fundamentally different. Customisation is an active process that directly responds to what the customer says they want, for example, changing notification settings on social media. In contrast, personalisation is achieved using existing data. An ecommerce platform, for example, could recommend a certain item to a customer based on previous searches. Customisation is currently shifting to personalisation, and it’s not difficult to work out why. Customisation relies on the customer to input extra information, but for many people this seems like a chore. Personalisation, however, creates a connection with the user based on their habits and history. The customer doesn’t have to make an active choice. As well as handling the natural reluctance of consumers to change settings, personalisation has a lower interaction cost.
More than just a pretty vase
Perhaps the most quoted example of personalisation and customisation is Shapeways, the online 3D printing marketplace. Since 2007, the website has provided custom products for clients using stereolithography. 3D printers have delivered a fast, cost effective way of streamlining customisation. In fact, Amazon now wants to 3D print items in delivery vans as they head to the customer. Advanced data analysis, including machine learning techniques, have also enabled the expansion of personalisation and customisation by making it easier to collate consumer information. Voice based personal assistants, powered by Artificial Intelligence, can interact seamlessly with users and set up a dialogue. This exchange of information has allowed more and more sectors to alter what they have to offer so it suits exacting individual requirements. And, for the most part, it seems to work. Retail is an obvious beneficiary, with more than 70 per cent of retailers personalising the store experience. Personalisation and customisation thrive in industries where specific details can make all the difference. Healthtech startups are using tailored health services to bring change to existing systems. Another industry currently dominated by personalised and customised services is finance. An army of FinTech companies are forcing traditional banks to transform their one-size-fits-all attitudes – not just for the customers, but for the overall health of financial services.
Up close and personal
As we move forward into the digital age, personalisation and customisation will become a business necessity. The ability to tailor items and services is a breath of fresh air for customers who were previously limited to what companies thought they wanted. Now that businesses have realised the merit of unique products and services, consumers will continue to occupy a central role. The consumer will exercise greater power over their own user experiences, both actively and passively. The changing role of consumers also ties into the death of brand loyalty, particularly as millennials search for the best deal over who they think is best to provide it. This will encourage healthy competition between businesses and give startups the chance to compete with incumbents.
Despite opening up opportunities for young companies, handing over so much power to consumers could have negative consequences. In terms of infrastructure, handling so many specific demands could complicate supply chains. It could also confuse inventory as different resources are needed to meet certain demands. An equally perplexing dilemma surrounds customer preferences. Although they may think that they know what they want, this isn’t always the case. As supposedly asserted by automotive pioneer Henry Ford, if he had asked consumers what they wanted, they would have asked for faster horses. Businesses need to find ways to overcome this, which could include the use of predictive analytics.
Personalisation and customisation have gradually become the new normal for consumer facing businesses. Going forward into 2018, tailored products and services will replace the outdated business model of mind numbing standardisation. It might not be easy for companies to build the necessary infrastructure, but disruptive technology like 3D printing, data analytics, production automation and Internet of Things connectivity will be instrumental in facilitating the evolution of supply chains. Businesses are navigating sector wide markets which are dictated, knowingly or not, by consumers. The real challenge is working out if the customer really is always right.
Can businesses survive the digital age without offering personalised or customisable products and services? Do consumers always know what they want? What other innovative technologies have fostered tailor made customer experiences? Share your thoughts.