The prospect of customizing products and services to a wide audience constituting of millions of global consumers is a task that holds several challenges for luxury brands.
The first major challenge of mass customization is the transformation and integration of the complete internal organization for mass customization. This is a challenging task as it involves a complete change of operations systems and processes as well as the reorientation of the employees to be receptive to customization. It also involves the absorption of the different functional units involved in the customization process and the separation of specialized resources and dynamic boundaries. The luxury brands that seek to implement a successful mass customization strategy must first launch an internal change process that involves every employee, department, unit, function and process being attuned towards a relentless focus on the individual customer and their personal needs. This is no easy task.
The second major challenge that luxury brands could encounter in the process of mass customization is the issue of ethics in retail marketing. This is related to customer data collection methods and use. Mass customization involves interaction with consumers on an individual level, with an implication of the exchange of vital personal information such as name, age, contact
details, marital status and other key personal data. The information is often stored in a database with the aim of being retrieved when required, to track the customer's shopping habits and preferences. It can further be used to tailor products and services to the customer.
The key ethical issues related to sensitive personal data are the methods of collection and the methods of execution. Several luxury brands wrongly collect and store consumer data without informing or obtaining permission from the consumer. There are numerous cited cases when customers have been surprised to find their personal details being retrieved from the database at a luxury store's counter. Although luxury brands recognize and respect the personal data protection act, this does not justify the storage of the personal data of consumers in an internal database without permission. It is both unethical and goes against the laws of permission marketing. Consumers should choose to have their personal information stored in a company's system and not have it imposed on them. Also the relationship with the brand is strengthened when consumers willingly make their personal data available to luxury brands.
Ethical marketing also extends to the ways that consumer personal data are used. In most cases, the information is retained in-house and used to design products and services that would appeal to customers. In some other cases, the information is passed onto third parties that often partner with luxury brands in consumer data exchange and tracking. In this case, the luxury consumer sometimes receives unsolicited marketing messages from different companies. This is both tacky and a complete consumer turn-off. It also diminishes the image of the luxury brand.
The strategic objective of customization, whether offered to a narrow luxury market or to a mass luxury consumer base, is to increase customer satisfaction, improve brand loyalty, foster stronger customer relations and increase sales and profitability. Therefore mass customization and bespoke services should form an important part of every luxury brand's strategy, package and communications. If offered in a timely and uncomplicated way, customization has the potential of being an asset to luxury brands.
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