The rise of the customization nation

One of the more interesting sessions at this year’s Food Marketing Institute Midwinter Conference in Miami this week was "Built for Yesterday, Facing Tomorrow: Food Retail’s Engagement of the New Consumer." Presented by Anthony Flynn, CEO of YouBar and author of Custom Nation, the premise was that grocery retailing is an industry grounded in the delivery of mass produced goods through bricks and mortar locations. It has a very long history of customer service and of striving to provide the best value for shoppers.
The shopping environment has changed dramatically, however. Technology now enables consumers to create their own customized supply chains and requires personalized products designed to meet particular health goals, dietary desires and cultural values. As revealing, Flynn suggested that the things once thought paramount to cultivating customer loyalty, like discounts and promotions, may not be that important after all.
Flynn, whose company sells customized energy, protein and nutrition bars, cited two components critical to this new type of retail:
- Configurator: a website that helps the customization process
- Batching: the grouping of orders by ingredients
He added that success is based on reducing choices and curating the experience, which moves the retailer from the role of simply satisfying a need to a trusted advisor position that enables them to proactively sell.
Supermarket operators are buying into the concept of customization, taking risks and challenging the old ways of doing business. The reward is a distinct uptick in relevance to the shopper.
"As retailers, we have the intimate relation with the shopper," said Bill Nasshan, executive vice president & chief merchandising officer at Bi-Lo Holdings, LLC. "But to become even better, we need to move from just asking the shopper, ‘Did you find everything you needed’ to ‘You should try this product.’"
What impact will the rise of customization have on traditional and ecommerce retailing? Do you see greater opportunities for customization in food or other retail channels?
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11 Comments on "The rise of the customization nation"
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Minimal impact on traditional retailing, except that this should encourage retailers to constantly re-evaluate their assortments. E-commerce, on the other hand, is ripe with customization opportunities.
Customization can be a really important driver of business, but not everyone is capable of offering it. Depending on where/how a brand’s products are produced, spoilage, time-to-market, materials, etc., it may or may not be a consideration for food or other vertical producers. That said, packaging, order quantity, replenishment options and combining of products are alternatives that almost any brand or retailer can leverage to offer a degree of user-driven customization.
On the small scale customization has space to grow. On the larger scale—price is first, then service, then marketing gigs like custom. A majority of the shoppers do not have the time, patience or spend to support custom.
Innovate and change this as we go forward. Food is a first area and fashion is next. Food in-store, fashion online and in-store.
I think this is one of the biggest growth opportunities retailers and CPG brands have globally. Some brands already have made great progress in this area of customization. For specialty apparel, I have seen dressing room kiosks and “smart mirrors” to create customized fashions and/or request assistance from in-store staff. Similar services are also growing with online apparel merchants. In the food business, custom recipe services are becoming more prevalent, especially online, but also in-store. Live in-store cooking classes are a big draw.
There could be customization if food retailers looked at my purchases and provided relevant offers on my receipt based on the ingredient-trends in my shopping basket, like what Catalina does except focused on consumer needs and not the retailer’s need to extract funds from center-aisle tenants.
I guess someone could visually scan my basket and upon seeing a few items take a guess at what might be a good suggestion, but I think this needs to be computerized.
This would require more data at the item level (ingredients) but for sure, if that system existed, it would see a drastic change in what I am buying (New Year’s resolution) and it would be nice to get offers that reinforce my new behavior.
It could work in other channels—it will mean a greater amount of data and that would require something like a semantic web for retail.
Customization can mean differentiation. A retailer of any kind has the advantage when it can customize the customer’s experience. A retailer can customize by region, by city, by neighborhood and even by the individual customer.
I’m not a huge fan of making a distinction between the channels, at least not at first. Net net, if it leads to a better experience, the relationship will be strengthened and the rewards will be sales and loyalty. How this splits between online and in-store is something yet to be discovered. At some point the experiences need to be linked from planning through execution and evaluation.
I see customization being more effective with loyal customers and influencers. These are the customers who will spread word of mouth about the product as they are able to customize the product/service. I do not believe providing customization to every consumer is efficient.