Personalization of consumer goods, sometimes referred to as mass customization, has been on the margins of the mainstream for several years. Often associated with footwear thanks to efforts like NikeID and Converse, the track record of offering the consumer personal discretion to choose certain product attributes is mixed. P&G ended their personalization initiative called Reflect.com after six years in 2005 and Adidas shut down their program earlier this year (following a first shutdown in 2005) only to subsequently relaunch it.
The business drivers seem clear enough. The customized product not only sells at a higher price and margin, but also delivers a strong customer experience and consumer intimacy.
In 2019 personalization is one of the key consumer trends. A good example of this is L’Oréal, that unveiled in Paris this summer a concept called My Little Factory, which proposes to blend custom Lancôme foundations in 22,000 variations according to customer orders.
The “My Little Factory” initiative is a telling name and provides a useful lens through which to examine the potential impacts of personalization in operations.
Personalization starts with the customer
We spoke to Amir Andskog, e-Commerce Supply Chain Director at L’Oréal Luxe, to understand the challenges of initiatives like My Little Factory. He started by pointing out the need to rethink data management structures and then to consider reactivity.
We certainly can’t create 22,000 new product codes and work as we did in the past. New, imaginative ways of tracking and storing products will be needed, ones that can manage master data in a much more flexible and adaptable way than today.
The customer will expect lead times approaching those of the current standard products. Our factories must rethink their manufacturing processes in order to produce and ship within one day.
Amir Andskog, e-Commerce Supply Chain Director at L’Oréal Luxe
For a factory, this could mean redesigning not just scheduling cycles, but also other fundamental aspects, like quality processes, to be faster and leaner. Another likely implication is that the finished product will ship to the consumer directly from the factory. If manufacturing has been outsourced, as is the case for companies like Nike or adidas, the role of the supplier fundamentally changes too.
All of these challenges imply that a manufacturing mindset geared towards the customer is part of the personalization journey. Amir agreed, “Capabilities that bring the customer order deep into manufacturing processes will be critical to success.”