The luxury industry has several misconceptions regarding mass customiza- o tion of goods and services. The most prominent of these misleading ideas is that mass customization increases operations costs. Another misapprehension is that the 'supposed' high costs incurred through customization will automatically be transferred to the price tags of the end products, making the products more expensive for consumers. There is also the doubt that luxury consumers will be willing to pay more for customized goods.
The first assumption, which is that customization equals higher operations expenditure, is wrong. This is because advanced interactive technologies such as the internet can be used to identify specific product requirements and to manufacture them using automated systems. This system applies similar economies of scale advantage of mass production. So instead of higher costs, mass customization actually lowers production costs in the long run!
The second assumption, which is that the 'supposed' higher operations expenditure incurred through customization will automatically mean an increase in the price of the end products, is also wrong. This is because the same systems that are used in mass production can be adjusted to produce the standard or basic components that are required for mass customization. The question of higher product prices does not arise.
The final assumption, which is that consumers might not be willing to pay more for customized luxury goods, is wrong as well. This is because customization is highly dependent on choice and selection and not an option imposed on consumers like standardized goods. A consumer who opts for customization knows exactly what appeals to them. This means that choice would rank above cost for the consumer, making customization a strong selling factor. When consumers choose customized products, their level of expectation is higher than that of the consumer that chooses mass-produced goods. This higher expectation is also accompanied by an envisaged higher price. The price difference between customized and standardized goods should however be minimal.
The mass customization formula can be applied to luxury goods at little cost difference from the current cost of mass production. This naturally should not affect the prices that consumers would pay for the goods, although luxury consumers are willing to pay more for mass customized goods, if required. For example if a consumer can purchase a handbag for $2,000, they will likely be willing to pay an additional $50 to have their component choices or personalized message embossed on the bag!
As previously highlighted, advanced computer-aided technologies currently provide companies with the opportunity to customize virtually any product. Technology also creates the possibility of producing higher quality goods; therefore luxury brands will not compromise their quality standards by adopting mass customization techniques. In addition, mass customization allows the manufacture of products in smaller batches without substantial cost difference. This is an advantage for luxury brands as they can maintain a fast design turnover while customizing goods.
The model of mass customization of luxury goods has also been recognized by several consumer and business analysts, academics and practitioners. Amsterdam-based Trends and Consumer Research company, Trendwatching.com termed the concept 'Massclusivity' which is a combination of the words 'Mass' and 'Exclusivity'. London-based Trend Information and Consumer Insight company, The Future Laboratory, calls it 'Masstige', which combines the words 'Mass' and 'Prestige'. These two companies recognize two underlying factors, which are the existence of a mass consumer base and the need to feed these mass consumers with special goods and services; that is exclusive and prestigious offerings through customization.
According to Trendwatchers, massclusivity simply means 'exclusivity for the masses'. This is mainly achieved through understanding the driving force behind the mass consumer need for exclusive products. As earlier indicated, the major factor driving this need is the immense consumer desire for respect, privilege and choices. This partly arises from the increased access that luxury consumers have to customized products and enhanced customer services in other categories of goods. Since the same consumers are already exposed to customization, they transfer the same expectation to the luxury goods category.
The Future Laboratory defines Masstige as offering prestigious goods and services to a mass consumer base. One of the ways of providing this is through bespoke services in the form of personalized and customized goods, without compromising the design and quality features. Consumers desire recognition and evidence that their needs are important to luxury brands. They increasingly look for these qualities in the offerings of luxury brands.
Several luxury brands currently offer customized product services to a select clientele but, often, customers are required to wait for several weeks or months for delivery of the goods. More importantly, a large proportion of the mass consumer population who are yearning for this service are unaware of its existence at luxury brands. This is because the concept of mass customization has not been fully introduced by luxury brands. The majority of the luxury brands that offer customization services continue to adopt the outdated bespoke made-to-order approach for a limited client group rather than the mass customization model for a mass client base. It's no wonder that the mass luxury consumer population feels that the qualities of recognition and respect are scarce among luxury brands.
The need that consumers have expressed for customization is also being exploited and addressed by companies in the new extended segments of luxury goods and services such as hotels and spas. A noteworthy example is E the customized package offered by two London hotels, The Metropolitan and o> The Halkin, which provides guests with in-house appointments to order bespoke goods from a host of luxury brands, including Mulberry and Philip o Treacy. Also luxury brand Ermenegildo Zegna is reputed to be obsessed with w tracking customer preferences through CRM technology and providing prod- o ucts and services to suit their needs. This has led to a reinforced emphasis on customized and bespoke services to a broad consumer base as a part of the brand's core offering. Also, new luxury brand André Ross was launched on the core concept of bringing bespoke quality goods to a broad consumer base. Ralph Lauren and Tommy Hilfiger also provide all consumers with tools to customize a range of their products through their websites. The features include the inscription of customer-chosen monograms on the polo shirts for men, women, children and babies.
There are different ways that luxury products can be customized by luxury brands. As previously mentioned, several luxury brands currently provide bespoke products and services of varying scales to a select clientele. These services, however, come at very high time and monetary costs, which are often out of reach or unavailable to all the luxury consumers that desire them. Luxury brands can make product customization accessible to a broader client base through adapting the product development, manufacturing, marketing and delivery systems. A few recommended methods of customization are provided in the following sections.
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