The new capital brings Udaan’s total funding to date to US$1.15 billion. Indian Business-to-Business (B2B) ecommerce startup Udaan announced on January 6 that it has raised US$280 million in additional financing from existing investors Lightspeed Venture Partners, DST Global, GGV Capital, [...]
In just a few clicks, customization lets the customer get a product in their choice of color, size, or design, letting them add a personal touch to what they want.
At a time when people are increasingly conscious of what they buy and use, and celebrating and promoting individuality, brands across the globe are responding to the demands of the market.
Given the increasing preference for personalized or customized products, a large number of companies – from niche startups to expensive and well-established brands – are gradually introducing products that can be fully or partially customized.
While customization was previously limited to few products such as t-shirts or mobile cases, today, one can even get cars customized, as is the case with Tesla. Similarly, Nike By You lets customers customize their shoes – they can choose the color of the bottom and top of the shoe as well as that of the shoe laces, and even stitch in an inspirational message on the tongue of the shoes.
Meanwhile, made from sustainable materials, BAUME lets its customers choose the face, frame, size, materials for the band, and the engraving.
Businesses thrive on providing customers what they want. And personalization achieves this by asking the customers what they want. In just a few clicks, personalization lets the customer choose their preference of color, size, or design, letting them add a personal touch to the product they want.
A consumer review by Deloitte found that 36% of consumers are interested in purchasing personalized products or services. Along with this, the survey also found that 48% of consumers are willing to wait longer for their customized product or service.
Furthermore, according to statistics collected by Invesp, 53% of online shoppers believe that brands who personalize the shopping experience are providing a valuable service.
“We’re reaching a level where personalization is not only a perk for those consumers who are keenly aware of their wants it and needs, there are instances where problems outside of not finding exactly what they want are being solved,” Rae Whitte wrote in a Forbes article.
According to Harvard Business Review (HBR), businesses that encourage consumers’ ‘psychological ownership’ can drive them to not only buy more products and purchase them at a higher cost, but can also promote these products among their friends of their own accord.
Psychological ownership occurs when ‘consumers feel so invested in a product that it becomes an extension of themselves.’ This feeling of “It’s mine!” occurs when the consumer feels that objects/ideas/people are closely connected to them and that it is ‘theirs’. And this can develop either by exerting control over a product/service, investing themselves in something, or intimately knowing something.
A consumer is more likely to feel a sense of ownership for products which they have invested in customizing – products which they “shape, create, or produce.” Along with the ‘I built it, therefore I own it’ subconscious factor, when consumers have taken ownership of an object, they also value it more – a phenomenon which is called the Endowment Effect.
Even before mass customization entered the mainstream, old and familiar brands could occasionally experience the downside of connecting so well with consumers. The “psychological ownership” displayed by consumers sometimes leads them to get defensive about the brand.
For instance, in 2009, when Tropicana redesigned its logo, it put off customers who had grown up with the image, leading to the company’s sales plummeting 20% in less than two months. Soon, the PepsiCo brand reverted to its original design.
Benefits Of Personalized/Customized Products
1. Increase customer loyalty
According to one study, “customization increases perceived service quality, customer satisfaction, customer trust, and ultimately customer loyalty toward a service provider.”
For any business to survive, it has to retain loyal customers. As not all customers are the same, and their wants and needs are different, a one-size-fits-all approach may not work for everyone. When the customers get the exact product they want from your brand and have the ability to design it themselves, it can drive drive customer loyalty and increase customer satisfaction.
With more customization and loyalty, the customers are also likely to purchase more, particularly if your brand’s customization options are different from your competitors’.
2. Drive sales
According to the Harvard Business Review, when customers can personalize their products, they buy more and are also more likely to recommend the brand to their friends.
For instance, in 2014, after Coca-Cola’s sale of total volume of soft drinks had fallen for the 11th consecutive year, the company launched its “Share a Coke”campaign. Under this, the beverage company began selling cans and bottles labelled with common names and terms such as “BFF” and “Friends”.
Coco-Cola also went a step further and invited consumers to request their own customized cans. With this tactic, the company’s sales spiked by 2.5 % in just 12 weeks.
3.Get better insights
Compared to their non-customized counterparts, customized products can help brands get a better idea of their customers’ preferences, and use data analytics to understand and satisfy these demands. Knowing what your customer wants will also give you an edge over the other competitors in the market.
4. Increase word of mouth marketing
Products that are unique are a great conversation starter, as people tend to notice something that stands out. For instance, July luggage allows customers to customize their luggage by choosing the size and color, and also lets them add the imprint of their initials on the luggage.
“Customers tell us all the time that people stop them in airports and on trains to ask where they got their suitcases. People are intrigued by the idea of their initials on their suitcase, and when they learn they can choose the color palette too, they get excited,” July CSO Athan Didaskalou told Forbes.
Similarly, if a customer is loyal to your brand and is satisfied with your products, it is highly likely that they will recommend your brand to others, thereby prompting more people to purchase your products.
5. Charge higher
Compared to non-customized products, consumers tend to pay higher for products that they have designed themselves. As the consumer perceives self-designed product to be more valuable than standard ones, they consider the extra charge to be reasonable.
The Deloitte review found that 1 in 5 consumers who are interested in personalized products or services are willing to pay 20% more to obtain them.
Offering partial or full customization of your products can give you an edge over normal products in the market. It can also help you increase customer satisfaction and word of mouth referrals. Get your creative juices flowing, and tap into this ever-growing trend to give your customers exactly what they want.
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