Photo by Keagan Henman on Unsplash
August 20, 2024
Should All Brands Offer Personalization Options for Their Products?
M&M’S, a brand under Mars Incorporated, has launched a new initiative offering personalized products for family vacations and weddings. Available exclusively at the brand’s four retail stores and online at MMS.com, the customization options include a variety of products, such as Wedding Ring Party Favors and Just Married Wedding Favor Tins. Couples can choose from over 20 colors and personalize M&M’S with messages, names, or photos to add a unique touch to their celebrations.
M&M’S, and other brands like it, have begun to focus more on personalized and custom products to cater to the growing consumer demand for individuality. Whether it’s customizing items for special events or tailoring everyday essentials to personal needs, these options allow consumers to express their unique preferences and enhance their experiences.
According to Forbes, “When identifying ways to stand out, customization is king. It has boundless potential for both brands and customers.” Grand View Research reports that the e-commerce market is expected to rise to $83.26 trillion by 2030, with a CAGR of 18.9% from 2024 to 2030. With this growth in mind, Forbes predicted that “custom products are the future of small and medium-sized businesses.”
However, big brands can also benefit from this strategy. As reported by Phys.org, personalization at scale can “reduce customer acquisition costs and increase revenues. Personalizing experiences, when offered to millions of customers, make it difficult for competitors to imitate, especially when brands use proprietary technology.”
Per a study by McKinsey & Company, Gen Zers have especially been seeking out personalization for many years now. “The core of Gen Z is the idea of manifesting individual identity. Consumption therefore becomes a means of self-expression — as opposed, for example, to buying or wearing brands to fit in with the norms of groups,” the study reported. This trend, driven by both Gen Z and millennials, is spreading across generations, with consumers increasingly seeking personalized products that reflect their individuality.
In general, personalization and customization can help brands engage their customers and increase awareness. As reported by Forbes, data from Boston Consulting Group showed that “companies that master personalization can increase their growth rates by 6% to 10%.”
Additionally, a Deloitte study likewise revealed that customization plays a crucial role in driving significant business growth and enhancing customer retention. In an era where consumers’ attention spans are shrinking, the study found that offering personalized and tailored experiences can yield five to eight times the return on marketing investments and boost sales by 10% or more.
One retailer that has been offering customized products for years is Lids, which provides a variety of customizable hats from different brands. When perusing through the options, there are multiple base hat shapes to choose from, followed by a plethora of color options, and finally, the ability to have almost any type of text or graphic digitized and embroidered.
But personalized products go beyond the typical custom engravings and made-to-order items that have existed for quite some time. Some brands have innovated their product lines in ways that are unique to their offerings and customers.
Software company Salsify identified three of these such retailers:
- Care/of: This company enhances its direct-to-consumer model with personalized vitamin packs tailored to individual health needs. Customers start by taking an online quiz with 48 questions, and Care/of then recommends specific vitamins, delivered in monthly, colorful packs. Since its 2016 launch, Care/of has grown significantly. In 2020, Bayer acquired a 70% stake in the company, valuing it at $225 million.
- Skin Inc: This Singapore-based skincare brand uses a Skin ID Quiz and a database of over 1 million skin profiles to offer personalized skincare solutions. The brand experienced a 400% growth during the COVID-19 pandemic and operates in over 78 cities with more than 200 retail locations, including Sephora and Nordstrom.
- Shoenvious: This brand offers a luxury footwear experience with a 3D online designer tool that allows women to customize shoes with 100 colors and materials and over 300 styles. During the pandemic, the brand focused on personalized bridal shoes, boosting site traffic by 30% and increasing conversions. Shoenvious is now available in over 80 countries.
As the demand for individuality grows, retailers are responding by expanding their offerings with personalized and custom products. This trend not only enhances customer satisfaction by allowing for unique expressions of personal style but also strengthens brand loyalty. By embracing customization, retailers are positioning themselves to better meet the evolving expectations of today’s consumers.
Discussion Questions
In what ways might the rise of personalized and custom products reshape brand identity and customer loyalty in the retail sector?
How will evolving consumer expectations influence the future of retail customization and the challenges of scaling personalized products?
What effects will the shift toward personalized and custom products have on traditional retail models, particularly in inventory and supply chain management?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
Doug Garnett
President, Protonik
David Biernbaum
Founder & President, David Biernbaum & Associates LLC
Recent Discussions
More Discussions
How Can Retailers Crack the Gen Z ‘Riddle’?
Gen Z is becoming an increasingly important consumer demographic, but an elusive one to map. How…Does Bath & Body Works’ Scented Holiday Campaign Pass the Sniff Test?
Bath & Body Works is kicking off a new campaign with scent being at the fore…Which Tech Will Solve In-Store Inventory Woes?
Three major tech lineups are looking to solve retail inventory problems. Which is most suited?
Personalization allows brands to generate incremental revenue through charging a premium for a specially tailored product or through offering a service which embellishes an existing product. The latter has become more common, including at retailers like Levi’s, Uniqlo, and Nordstrom – all of which have customized embroidery options for certain items. Even Target has joined in with a customization ‘service’ for back-to-school gear like backpacks and water bottles. While this generates some loyalty, it is not deep personalization. That, such as getting a truly bespoke suit, remains expensive because of the time and effort involved. AI may cut down on the costs here and allow for mass customization and personalization, but we are not there yet.
The brand M&M’S is an excellent example of the type of brand that benefits by offering personalized products. Since consumers will purchase these items for special occasions, which normally involve incremental sales, it is not surprising that sales increase by 10% or more.
Personalized products often carry significant emotional value, making them more meaningful gifts for special occasions. This emotional connection can enhance the overall customer experience, fostering brand loyalty. As a result, consumers are more likely to return for future purchases, positively impacting long-term sales.
Personalization doesn’t work for all brands because it may not align with the nature of the product or the brand’s identity. Some products rely on standardization and uniformity, which can be disrupted by attempts at customization. Additionally, the cost and complexity of implementing personalization can outweigh the potential benefits for certain categories.
In spite of this, personalization is not marketable for all brands, and certainly not in all categories. Nevertheless, there will be imitators in all product categories, and most will fail. Db
Probably warrants some greater definition of what exactly do we mean when we say “personalization” and “customization”. Traditionally, one thinks of monogramming or bespoke apparel or goods under those definitions. And that may make sense for some limited segments of retailers; however it will likely never make sense financially for the majority. That being said, savvy retailers can still offer up personalized recommendations and customizable options that may satiate the customer’s need to feel unique without having to completely disrupt their supply chain or fulfillment models.
Personalized products can differentiate brands and boost loyalty by accommodating individual tastes. Personalization is often a trade-off in terms of efficient or cost effective alternatives due to less standardization and more complexity. As recent Starbucks articles suggest, it’s hard to nail both personalization and swift service.
The rise of personalized products is deepening brand-customer connections, enhancing brand identity, and driving loyalty by catering to individual preferences. Successful examples like Nike’s custom shoes and Coca-Cola’s “Share a Coke” campaign show how personalization can scale effectively.
As demand for unique experiences grows, retailers must innovate with AI and mass customization to meet expectations. This shift will challenge traditional models, needing flexible inventory and supply chains to support on-demand production and rapid delivery.
Last week I watched a sneaker personalization workshop at MAJORWAVZ-LABS at Resorts World. It was pretty intense, involving industrial sewing machines, fabric, paint and elbow grease. I’m talking personalization on steroids.
Personalization is cool, but there is not one thing in this article that is brand new. Do I think that every brand should offer personalized options for their products? Nope. Personalization should happen only when and where it makes sense. And it doesn’t always make sense.
Personalization options may not make sense for absolutely every brand, but consumers do often appreciate more tailored products and experiences. My favorite example so far is Adore Me using GenAI to design one of one lingerie sets based on consumer preferences. That to me is a big part of the future of personalization.
For some brands, personalization makes great sense. But it can also be a catastrophe. We must be wise as we approach such questions and wonder whether it matters. After all, there’s tremendous cost and risk involved with even experimenting with the idea.
What bothers me most is how ideas like this are suggested as the ultimate brand step. They aren’t. Brands make the most progress by making good product supported well and distributed where they sell well. Only after all that is superb it might make sense to look at personalization. But I’d always prefer useful new products to personalization.
As a customer? I used M&Ms personalization once, Oreos once, and Nike once. The experience was fine but only a tiny bit better than just buying the products that are in stores.
There’s something special about saying, “Made just for me.” Personalization is a hot topic. There are two ways to personalize:
Our annual customer experience research found that three out of four (77%) customers want a personalized experience. Creating a product AND an experience that is individualized to your customer can be a winning combination.
The M&M initiative is nothing new. Even decades ago, one could get M&Ms designed creatively. You could even get photos on them, say, for weddings.
I happen to be wearing my personally designed Nikes. I think I had 17 design decisions, right down to the laces and the tags on the back of the heels. I enjoyed them so much that I gave a gift certificate to my sneakerhead grandson so he could do the same.
There are three things holding personalization back. All of which can be hurdled over time.
Personalization is a great way for Brands to increase loyalty and revenue as long as it can be implemented and delivered cost effectively. If you can deliver there is virtually no risk here, just upside.
For CPG/FMCG companies, creating customized and personalized products is a great way to ease into D2C, build brand loyalty, and generate 1st party data.
There is certainly a market for this, as long as the ROI makes sense. It makes sense, given that consumers are willing to pay premiums for personalization. It also makes sense from a publicity and marketing perspective. Just offering customized products will attract interest, even if most shoppers just smile and buy something off the line.
I had the pleasure of experiencing M&M’s personalization up front when my firm put customized logo’s and messages on each M&M contained in a pack of 20. Leaders in the company handed them out one afternoon as a small token of our appreciation for the focused work our employees deliver every day. The reactions to this small but powerful gesture were priceless. The smiles, surprises and delight were so gratifying and infectious. We talk a lot about retailer’s trying to differentiate themselves from competition. We talk about living up to the brand promise. Even the smallest of personalized expressions like putting a simple message or company logo on a single M&M can make a demonstrable impact.
What the above brand have in common is they found a way to make personalization work for their brand and their customers in a scalable fashion, the combination of which is not always easy to achieve. Personalization for the sake of personalization won’t work but brands that can find ways to make it work for who they are should.
Personalization requires expensive equipment and unique processes that can embrace a custom approach to fabrication which may be more expensive than it is worth to the consumer, or devalues the product itself. Who wants their name on a Cartier watch, when they are paying so much for the Cartier brand? Or to have their name on their new car tires, when most people don’t look at their car tires. Once we step away from clothing or personal items, personalization ceases to hold much value.
The rise of personalized products is forcing brands to rethink their identity and approach to customer loyalty. Consumers expect brands to offer unique experiences, making it harder for traditional, one-size-fits-all models to survive.
As personalization becomes the norm, brands will face challenges in scaling these offerings without compromising quality. This shift will also strain inventory and supply chain management, as retailers will need to balance customization with efficiency.
I think those who succeed will be the ones that effectively balance personalization with scalability, but it’s going to be a tough road for many to navigate.
As the article notes, personalization in retail is in high demand, making it the new table stakes. The more brands can lean into personalization, from the shopping journey to the individual product itself, the more they can establish a unique identity with their audience that fosters loyalty and helps establish a solid foothold.
The problem with customization and personalization on the product side however is scalability – it’s harder to plan for inventory when every item is unique. Personalization also increases fulfillment times, opposite of consumer expectations. The approach M&Ms is taking is a great strategy, opening the door for more product customization but on a small enough scale that the logistics won’t be entirely overwhelming. This partial-personalization approach finds a way to meet the consumers in the middle – offering the customized products they’re looking for with the quick, convenient shopping experience they’ve come to expect.
Another way to personalize the shopping experience without needing to create custom inventory, is to make personalized recommendations for consumers based on their past purchasing behaviors. These recommendations are relatively simple for a retailer to implement, especially with the help of AI, and can be an easy way to create a shopping experience that feels personalized and catered to the consumer’s unique preferences and tastes.