Personalization - is it right for your brand?
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This presentation explores the options that brands must consider when look at personalization of products and services. Presented at the Beauty & Money Summit in LA by Eric Cohen and Andrew Beddoe
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Personalization - is it right for your brand?
- 1. 30 April 2019 S3908B-P-013 v1.0 PERSONALIZATION Right for your brand?
- 2. 30 April 2019 S3908B-P-013 v1.0 Personalization in the factory Personalization at retail Personalization at home Product curation
- 3. 30 April 2019 S3908B-P-013 v1.03 Personalization in the factory Personalization at retail Personalization at home Product curation Front-end POP PERSONALIZE MAKE DELIVER
- 4. 30 April 2019 S3908B-P-013 v1.04 Front-end Personalization in the factory Order Online Personalization algorithm Make @Factory Ship Made-to-order It’s really hard Capital intensive Not as spontaneous
- 5. 30 April 2019 S3908B-P-013 v1.05 Front-end Personalization at retail Order online / kiosk Personalization algorithm Make @Retail on-demand Pick up More spontaneous POP diagnostics On-demand dispense It’s really hard to scale Mini distributed factories
- 6. 30 April 2019 S3908B-P-013 v1.06 Front-end Personalization at home Part of daily Routine Personalization algorithm Make/use @home on-demand Immediate use Immediate gratification Habit forming Cost of ownership Maintenance & inventory management
- 7. 30 April 2019 S3908B-P-013 v1.07 Front-end Product Curation Discover & order Personalization algorithm Curation & Recommendation Delivery Least complex approach Most scalable Do customers really want customized products or just the right product Brand may limit available subset of products BIRCHBOX
- 8. 30 April 2019 S3908B-P-013 v1.08 HOW MUCH IS ENOUGH? Factory Retail Home Customizability
- 9. 30 April 2019 S3908B-P-013 v1.09 Predictions Your competition is not your competition
- 10. 30 April 2019 S3908B-P-013 v1.010
- 11. 30 April 2019 S3908B-P-013 v1.011 Predictions Your competition is not your competition Biologics and supply chain- next distribution challenge Contextual data necessary for any true front- end Prove it! Efficacy will become the currency of beauty Consumers will prioritize peer opinion over brand Smart phones will get smarter The future of Retail will be… Personal devices will replace professional functions
- 12. 30 April 2019 S3908B-P-013 v1.012 IS PERSONALIZATION RIGHT FOR YOUR BRAND?
- 13. 30 April 2019 S3908B-P-013 v1.013 1 2 3 4 DO YOU FEEL LUCKY?
- 14. 30 April 2019 S3908B-P-013 v1.0 UK Cambridge Consultants is part of the Altran group, a global leader in Innovation. www.Altran.com www.CambridgeConsultants.com USA SINGAPORE JAPAN. . . Registered no. 01036298 England and Wales www.CambridgeConsultants.com
Editor's Notes
- How do we transform our business model through technology?| Front End Services The energy industry faces a huge challenge - how to help people actively reduce their energy consumption when their usual engagement with their energy provider is only when they have to pay them or switch providers. Our client, the Energy Systems Catapult, a government-funded technology and innovation centre focussed on the transforming the whole UK energy system to low carbon, asked us to help answer the question – "how do we use technology to completely change the buying model in our market, from a commodity (kWh) to a high value service (comfort)?“ We built a trial system, deployed in consumers’ homes for a winter season allowing them to engage in new ways with their heating. This created the data and insight on how to deliver the desired behavioural changes.
- Within the industry… We see 4 primary forms of personalization… These being Personalization at the factory … at retail … at home Product curation Each of these have different levels of complexity and customizability that impact both business systems and customer level decisions And they are not mutually exclusive
- The common thread among all these Is each form has a front-end …that Interfaces with the customers… That creates point of purchase (POP) space And gathers information for use in the personalize process… …the interface can range from Smartphones and web apps to real people …with many variations in between, including Web based questionnaires Kiosks interfaces Sensor inputs Remote beauty consultants Etc... How and where the product is made and delivered differs across these forms. Parts that varies here is where and how you make the product And how you get that product to the customer
- Personalization at the factory is about the …ability to customize products at a centralized manufacturing setting. From a nuts and bolts perspective…This involves, … Taking an order online Gathering personal information about the customers wants and desires Which can come from a variety of front-end inputs Online Questionnaires Beauty consults Wearable and remote sensors Online profiles and browser histories Selection of customizable options Etc. All this information is fed into an algorithm to generate a personalized specification Which is then passed to the factory to be made and shipped to the customer Companies innovating in this space are… Function of Beauty Nike eSalon Prose What is great about this? …. Made-to-order And can allow almost unlimited customization options depending how the basic building blocks (e.g, ingredients) are mixed. It is scalable because it leverages centralization The downside of this are… It is really hard Capital intensive Not as spontaneous because of lead time between order and receipt by customer which can been in weeks.
- Personalization at retail is about customizing products at the store and on-demand Orders can be taking online in advance or at a kiosk or over-the-counter. As the customer stands there, personal information is run through the algorithm to generate the personalized spec. The product is made directly in the store, allowing the customer to take it home right then. Companies innovating in this model are Skinmade eSalon L’Oreal Lancome It is not just about a product It is also about tools and devices that can help customize to customer needs: For example the NEXA skin imaging and retail beauty consultation booth What is great about this? More spontaneous POP diagnostics On-demand dispense, mixing and delivery right in the store The downsides of this are… It’s really hard to scale… It is not a centralized model…. Which means You have to build and manage… Lots of Mini distributed factories …with complex inventory and maintenance challenges Must be compatible to retail environments …which can limit materials and processes
- Personalization at home is about the ability to customize products at home For example mixing base ingredients in different ways to create a custom formulation right in the convenience of someone’s bathroom NuSkin and Romy are example of this But it isn’t just about product It is also about tools and dedicated devices that allow you to monitor, measure, and customize to your needs. For example… A magic mirror that says your skin is dry and you need to add moisturizer A razor that adjusts to your skin’s unique characteristics Or home devices to print makeup and skin care products Companies innovating in this model are NuSkin Romy Hi Mirror Kohler What is great about this? Immediate gratification… you get it when you want it…very spontaneous Habit forming… these can be habit forming because they are embedded in your home and become a part of you daily routine. The downsides of this are… Cost of ownership Higher upfront cost and recurring costs to maintain working device and inventory Barriers to entry More complex to use, and Need to maintain device and manage inventory
- Product Curation isn’t about customizing the product but finding the best product from a subset of available products already on the mass market. It is essentially product-as-a-service Companies innovating in this model are Amazon is a great example of this with features like Customers also shopped for Frequently bought unruffled Recently viewed Companies like StichFix and Birchbox are building successful businesses around curation, by hand-selecting products to individual tastes, budgets and lifestyles. Companies like CVS, and Walgreens and boots are perfectly positioned to curate products and offer custom kits as a service What is great about this? Least complex approach Can be brand agnostic depending on the company Can allow curation by different attributes, such as Ingredients, where made, physical characteristics, etc… Most scalable Pars well with dedicated devise The downsides of this are… Do customers want customized products or just the right product? Available subset of products may be limited by brand for some companies If you are Unilever or L’Oreal the subset would fall within their own brands Slide 17/18 0.5 min
- How much is enough? The ability to customize decreases as you move across the forms…from factory to home Do customer need the unique benefit and satisfaction the customized products that requires capital expense to deliver that promise, or are there enough products available globally that an appropriate product can be found? Segway to predictions…