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PA OPINION

Make it personal - seizing the personalisation opportunity

Mass production has brought cheap, quality products to millions of people. But until recently, true personalisation, where a product is tailored to an individual based on their preferences or biological data, remained the preserve of a privileged few. Now, though, technological developments mean we’re on the way to a world where all consumers have access to affordable products that meet their needs and preferences.

From Netflix recommendations to personalised skin care products, companies are using diagnostic and analytic tools to work out with ever greater sophistication what their consumers want and need. L'Oréal Perso, for example, uses an app that can provide you with a moisturiser that reflects the health of your own skin, or a lipstick that perfectly matches the outfit you’re wearing.

Or look at how Disney has transformed the experience of visiting its parks from a set of fragmented experiences, such as buying park tickets and making restaurant reservations, to putting everything online in a completely integrated way using their MagicBand. This allows you to plan and personalise every moment of your experience ahead of time.

This is creating tremendous new business opportunities. Eighty per cent of consumers say they’re more likely to buy a product or experience when it can be personalised. And the global market for personalised consumer products is forecast to grow by 7-10 per cent each year to 2025, rising to $25bn. This is no longer a niche space. It’s real, it’s happening now, and increasing numbers of businesses are investing heavily in it.

Principles for transforming D2C (direct-to-consumer) to D2Me (direct-to-me)

Currently, true personalisation is dominated by small scale new entrants and start-ups, but there is real potential in this market for value-generating partnerships and collaborations.

Meaningful or true personalisation calls for a transformation in the way corporate innovators think. Those wishing to seize the opportunities will need to develop models which move them from direct-to-consumer to individualised direct-to-me models. It’s no longer about developing one product for hundreds of thousands of people, but one product for one individual. Manufacturers will need to work out how to produce units of one, with personalised formulations designed exactly for each consumer.

Successful delivery calls for new talent, skills and systems, and cultures. It will also need new technology. We’re helping clients produce individual products, with individual formulations and individual labels, at speed. Developments in low cost personalised manufacturing and 3D printing will all help drive this forward. But getting it to a scale that is profitable is still a real challenge.

The approach will vary by category, and each product or experience specifically, but there are five elements that need to be carefully addressed to make it happen successfully: consumer, channels, data and diagnostics, products and services, and commercial models.

Show consumers what they need (even if they don’t know it yet)

The consumer and their experience has to be at the heart of everything. That’s always been the case but now needs to be sharpened up so any product really focuses on the individual, what they need, what they don’t yet know they need, and the solutions to meet those needs.

The combination of your consumer’s needs and the benefit you are providing will influence the decisions you make for each of the other elements – everything should support how you deliver that benefit to your consumer. Prose is a good example. It shows consumers what their specific hair needs are through simple online consultation that transforms the way the consumer chooses which products to purchase.

Expand and integrate channels to deliver a seamless experience

Then it’s about making sure consumers know what’s available and are inspired to buy it, recognising that’s going to be a different journey than in traditional sales channels. All of this has to be seamless and integrated, from initial consumer engagement and the digital experience, to getting the product to the consumer, to demonstrating the benefits of product usage. The channel strategy must be fit for purpose to engage and motivate the consumer in this new world.

Nike is a prime example of how to deepen a relationship with your consumer across multiple channels. They offer exclusives through their app tailored to a consumer’s needs, they send push notifications in-store for items previously browsed online, and the Nike Fit app can be used to virtually measure the shape and fit of your feet giving you personalised recommendations. Ultimately, Nike is collecting and using the consumer’s data while thinking across channels to create an exciting, tailored and seamless experience.

Maximise the value of data – the new currency of innovation

None of this will be possible without data. As ever, it’s not just about capturing data and being trusted enough by consumers so they’ll hand it over, but understanding what combination of data will generate consumer insight and value creation.

There are many potential paths to acquire the necessary personalisation data, from questionnaires and AI-driven insight generation to microbiome and DNA tests. Diagnostics and devices are appearing that can track fitness, mobility sleep. And image recognition technology is increasingly being used to assess emotional health, dermatology, and a host of other personal indicators. As an example, Viome gives precise food and supplement recommendations based on your gut microbiome, cellular and mitochondrial health to improve personal health and performance. Choosing the level of diagnostics right for your consumers, and handling their data responsibly, will be key to the credibility of your personalisation offer.

Develop new tech capabilities and partnerships

Then it’s about the capabilities to deliver new and improved products and services, embracing manufacturing flexibility and advances in automation and additive manufacturing. Nourish 3D is a great example of using new technology to differentiate product offering – they use large scale 3D\ printing technology to print daily “gummies” with different layers for each supplement instead of different pills.

The path to success involves building partnerships to quickly develop new capabilities while maintaining flexibility as you scale. Partnerships allow you to test and prove what works best for delivering your new offering before you invest to build it yourself.

Embrace new commercial models and revenue streams

The final critical element is about choosing the right commercial model. It’s not just about forcing higher cost offerings into existing models but exploring new revenue sources such as subscriptions or products-as-a-service, which will only work if consumers really believe they’re getting a truly personal and valuable experience. Being creative in how you generate value from the experience and relationship is key.

StitchFix delivers a curated box of clothes and accessories based on your taste, budget and preferences at intervals you choose, and give access to a personal stylist. They then capture feedback data about style trends, fit, and all attributes of clothes and use this to create their own exclusive clothes and inform their suppliers.

By combining these crucial complementary five elements, you’ll be well underway to building a successful personalisation business. Download our Personalisation Canvas, which will help you think about how these elements apply to your business objectives.

Contact the authors

Find out more about our work in make it personal

Contact our personalisation team

Wil Schoenmakers

Wil Schoenmakers

Rhea Patten

Rhea Patten

Ramprasad Srinivasan

Ramprasad Srinivasan

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