'The one word definition of true luxury in the 21st century will be "bespoke".'
Daniele de Winter, CEO, Daniele de Winter Cosmetics, Monaco
Henry Ford, the man who founded the Ford Motors Group and brought automobile ownership to the masses, famously made a statement in the early twentieth century about the colour and design choices that his customers could have of the Ford Model T car. He said:
'The customer can have any colour as long as it is black.'
His unenthusiastic comment about providing customers with multiple colour choices of the Ford Model T (all the cars were black) was made mainly from a technical and manufacturing viewpoint. This is because, at the time, production flexibility in terms of multiple colours, designs, styles and other forms of customization had very high time and monetary costs that would have increased the prices of the cars substantially. However, Ford's competitor, General Motors, came along and by the middle of the 1920s was able to offer customers multiple colours and annual model changes at no additional cost. Through this method of product variety, they encroached on the market share of Ford and soon surpassed Ford in popularity and sales.
Fast forward 90 years to 2006 and, quite startlingly, several business practitioners still think like Henry Ford did in the 1910s, despite the enormous advancement in technology. It is not uncommon to find executives in the luxury goods sector that still believe that standardized goods are manufactured at low cost while customized goods are manufactured at high cost. The same perception is widespread in other sectors.
Now, fast forward again to 2050 and think of what the consumer society would feel like if we were all treated like the character Tom Cruise played in the futuristic American movie Minority Report. When he visited a shopping centre, he was greeted with his first name by digital screens. Computerized customer services teams were also at his constant service, and while he strolled around the stores, he was asked if he would like the same product as the ones he had previously purchased? This implies that a record of his personal tastes, preferences and shopping habits was kept and consulted for his benefit. It also shows that the stores understood his needs and applied them in their offerings to him. He was recognized, respected and appreciated as a customer. This scenario would be a consumer's dream world and should E be the luxury brand manager's ideal world. o>
The reality we currently live in is perhaps decades or even centuries away from the techno-savvy world portrayed in Minority Report. However, the o global marketplace has evolved from the production-based Henry Ford era to w that which utilizes advanced technology in several facets of commerce, espe- o cially in streamlining products and services according to individual tastes. This includes the customization of products and services on a broad level for an extensive consumer base.
The concept of customization currently exists in several business sectors on different levels. For example, several companies in the computer sector such as Dell provide customized products to consumers through the internet. This type of customization is on a broad level because it addresses a mass consumer base. In the luxury goods industry, customized products are currently provided on a narrow level to a small and select segment of consumers. The industry is yet to adopt customization on a broad base.
Customization of products and services is one of the key requirements of current luxury consumers. The previous chapters of this book have repeatedly emphasized the importance of understating the luxury customer and designing products and services to exceed their expectations. This is because luxury consumers are the biggest opportunity luxury brands have to gain competitive edge. This cannot be said often enough. The luxury consumer desires an exceptional and exclusive total experience with luxury brands and this can be achieved through products and services customization. Luxury consumers are also becoming more individual in their fashion tastes and increasingly seeking customization as an outlet to their fashion creativity.
Customization ensures that consumers are ushered into an exclusive experience area where their individual preferences are addressed on a broad and equal level. It provides them with the empowerment to apply their imagination and desire to be in control of their choices. It also enhances their satisfaction and creates a deeper relationship with the brands, paving the way for brand loyalty. Customization also provides luxury brands with the opportunity to tap into the intellectual capital of their consumers and to understand their design expectations better.
The luxury fashion goods sector is yet to make customization a core aspect of the corporate strategy. Currently, several luxury brands offer bespoke products and services but this service is often reserved to a narrow client base of very important personalities (VIPs) or very important clients (VICs). The reality is that every luxury fashion consumer has become a VIP and desires to be treated as one. Consumers perceive the offerings of luxury brands to be exceptional, and they desire to be treated as exceptional people by luxury brands. One of the ways of treating all customers as exceptional and endearing them to a brand is through offering an exceptional experience through customization. Also customized products can now be manufactured en masse as advanced technology has made their production cheaper. Although this strategy is now feasible for luxury goods, several luxury brands seem reluctant to adopt mass customization and determined to remain in Henry Ford's world of mass production. It is now past the time to rethink this stance.
The history of the luxury goods sector shows a strong link to customization, although mass production later overtook this. It is interesting to note that the majority of the successful luxury brands of today were started by skilled artisans and craftsmen who produced made-to-fit goods mainly by hand, with the assistance of a limited number of machines. This process was rewarding but also time-consuming, expensive and labour intensive. As time progressed and innovative manufacturing techniques were developed, luxury brands adopted the use of machines that produced more goods at less costs without compromising the product qualities and style. This however led to the standardization and uniformity of goods. Several brands, however, retained a limited range of products that continued to be manufactured by hand. These products are currently classified as 'bespoke' or 'made-to-order'. They usually have a high price cost (approximately €5,000 for a Hermès bespoke Birkin bag); and high time cost (six to eighteen months waiting period for a Hermès bespoke Birkin bag and approximately four months for a Gucci made-to-order men's shoe).
However, the current provisions of technology have made it possible to produce more personalized goods using mass production techniques without substantial additional costs. Companies that manufacture goods in other categories, including mass fashion brands, effectively utilize these techniques to optimize production and sales. Luxury brands are, however, yet to apply advanced systems in the production of customized goods for a mass client base.
The view of some luxury practitioners regarding mass customization is that it is at odds with the need to retain the 'exclusivity' attribute of luxury brands. It has been argued that if customers are provided with the tools to customize their products, the products might lose their 'superiority' appeal. This rationale is however negligible as luxury goods are currently purchased by a mass group of consumers globally and luxury brands have increased their production capacities to welcome this 'mass' consumer base. It is, however, purely logical to streamline the operations approaches of mass production to include one of the major needs of this mass consumer group, which is customization. Satisfying the needs of consumers has nothing to do with diminishing a brand's attributes but everything to do with enhancing the image and equity of the brand.
Previously, the product design and manufacturing process of luxury brands was driven by standardized products and services, parallel markets and long product lifecycles. Today, the situation is the reverse and the consumer has become the strongest market force in the luxury market. These consumers exhibit several strong attributes including the need for personal attention through the products and services they're offered. Luxury brands have to E wake up to the real consumer world. The rules of the game have changed. o>
The consumer market has evolved from a mass-production based one to a market where products and services need to be streamlined according to indi- o vidual consumer needs. To assume that the luxury marketplace is still a global w homogeneous scene will be to live in bygone fiction. The days of uniformity o and sameness are over. Individual consumer tastes have risen above semblance. These consumer tastes are also no longer predictable. A European City Mayor has the same likelihood of riding around the city on a bicycle or in the public underground train as a blue-collar worker has of using his/her earnings to shop at Chanel. Customers must be thought of as individuals with varying needs and not continuously grouped together as a bunch of 'luxury brand loyalists'. Today, the key to success in the luxury business is to understand the consumer and the market. This however is easier said than done.
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