People want different things. In the modern world, where customisation and personalisation are becoming increasingly common and expected, it's no longer enough to make a single product that you ship everywhere in the world.
From regional level to individual level, there are preferences that are increasingly dictating the variations needed in products. A winning strategy now combines diversity with scale. You have to accommodate the customer’s desire for difference – the diversity part - without giving up the economies of scale that make a business work and generate profits. That is the real challenge of personalisation.
It's easy to build one off products; it's just hard to build them in any volume profitably.
So the strategy of balanced diversity with scale is critical. There are a couple of phases that companies are going through to make this happen:
#1 The first phase is to accommodate regional variability.
#2 The second phase is to accommodate personal variability.
In the UK, we drive on the left of the road, so manufacturers have to make changes to their product to accommodate, when selling here. In other regions, it might be that they use different fuel or their power supplies have different voltage. There are a lot of reasons why, regionally, products end up being different. This gets companies started down this path toward mass customisation.
To retain the economies of scale, a lot of companies look for a smart way to do this. They land on the idea of a platform strategy with variants and options that are configurable. This means, in essence, there is a single product, but we can put it together in many different ways resulting in an explosion of possibilities. Within that range of possibilities we can meet most of the needs of most our customers.
But, you can only go so far with mechanical variability.
It’s a challenge to achieve mass customisation because those parts are expensive to produce. If you end up with a lot of sizes of one part, you get manufacturing costs that are hard to amortise, which leads to price points that don't work well.
But software starts to break this rule. Software has no manufacturing costs (in the traditional sense). Companies are beginning to understand that they can get so far with mechanical variability, but if they then switch to software variability they can get a lot further. This is where the second phase - the ability to accommodate personal variability - comes in. If you think about smartphones, the last step of the manufacturing process happens when the customer brings that phone home. They connect it to the Internet and they start loading it up with the software that reflects their personal preferences. If we all compared our phone, they’d all be different because we’ve been able to customise them ourselves.
This approach to customisation is starting to show up in many places and, ultimately, it will show up in lots of different products.