Understanding the mass customisation business model and ...

Understanding the mass customisation business

model and the opportunities it creates to

increase profits and develop new markets

This white paper has been written to help you understand the products, customers, suppliers and markets for customisable, configurable and personalised products.

It then explores the software, business processes and other critical success factors required to sell, produce and market these products.

Andrew Talbot @customgateway +andrewtalbot

July 2015

custom-gateway.com

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Understanding the mass customisation business model Page 1 of 24

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Contents

Executive Summary

The Products Explained Personalised Products Configurable Products Print On Demand Products

The Business Case

The Technology Drivers Production Technology Public Technology Adoption Software & Browser Evolution

Cultural Influences - Why Customers Want Personalised Product

The Software Required Product Management System Online Proofing (Website Personalisation App) eCommerce Website Auto Artwork Creation Auto Order Routing Order & Workflow Management

Types of Customisable Products

Current & Future Markets Industries currently using Customisable Products

Product Groups

Ways to Customise

Sales Platforms eCommerce Websites Social Media Instore / Kiosk eMail & QR Codes Other Websites Marketplaces

Critical Success Factors

Conversion Ratios

Case Studies

References

About Custom Gateway

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Executive Summary

The market for the supply of customisable products is growing rapidly, driven mainly by modern manufacturing methods, increased adoption of eCommerce and many different cultural factors. It is now commonly referred to as Mass Customisation and can be summarised as the production of personalized or customized products to meet individual consumers’ diverse and changing needs, using mass production techniques. Enabled by technologies such as online configurators, new printing techniques and lean production. It is the ultimate example of one to one marketing segmentation where every customer can have exactly what he or she wants. The market is already worth many billions globally and is expected to continue to grow for the foreseeable future, as both consumers and businesses understand more about the options available to them to personalise a product and demand more and more flexibility. The variety of products that can be customised and types of customisation are changing everyday. This white paper categorises them into three main groups - personalised, configurable and print on demand. For each category we then breakdown the different markets such as photo gifts, fashion t-shirts, promotional products, greetings cards or work / teamwear etc. As providing the customer with the tools to create products is also essential, we will also explore what software is needed to create customisable products and how this then links to the manufacturing process to make these types of products economically viable. Finally, we will cover the critical success factors and conversion rates for these type of products, as they are quite different to conventional ecommerce products. Both manufacturers looking to enhance their existing product offering for retailers/businesses and retailers/distributors looking to create their own unique products are being attracted to customisable products and with no additional investment in stock usually needed and the ability to offer almost unlimited choice, it is clear getting into customisable products is a very attractive option for more and more companies. This paper focuses on the decoration of existing products or the ability to make a product from a series of parts, but many of the topics explored will equally relate to the future opportunities offered by 3D Printing. What is very clear is that both manufacturers and retailers cannot afford not to understand this market and the opportunities technology offers their business to sell customisable products going forward.

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The Products Explained

Customisable products are created by taking an existing or blank product and customising or personalising it either by adding your own design/images/text or by changing the product configuration. This is mainly done by the customer online but the concept has now been expanded to products where the personalisation is done by the supplier / retailer by the addition of a unique design or theme not previously part of the product offering and not held in stock - Print On Demand Products. The diagram below illustrates the 3 core product types:

Personalised Products

Are available in both B2C (Business to Consumer) & B2B (Business to Business) marketplaces. B2C tends to focus on orders for single products bought as gifts and decorated with images and/or text - whilst B2B is more about logos with products being used for marketing.

Configurable Products

Are mainly focused on the B2C marketplace where a consumer builds their own bespoke product from a range of options available so their product is totally unique - customers are mainly ordering for themselves and is currently used for fashion based products.

Print On Demand Products

As production techniques have improved for manufacturing/printing small volumes of personalised products, the same processes have become viable for products that would have previously had to be stocked. This is usually supplier driven where a supplier can add a wider choice of designs or offer limited edition products which are only created as they are ordered. Some sites are now allowing consumers to create their own products which are sold to other consumers online. The section on Types of Customisable Products further breaks down these 3 main product types into more detailed product categories and markets.

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The Business Case

To understand why demand is increasing for personalised/on demand products, we should first explore the business drivers that have created the demand. There are many clever things that can be done with technology nowadays, so before investing or committing to a strategy it is important to make sure there is a sound business case. Listed below are the main reasons why the concept of mass personalisation, on demand production and web2print are without doubt becoming one of the major drivers of both B2B & B2C eCommerce:

1. Unlimited Choice - by not having to commit to a stock holding, it enables you to offer a virtually unlimited choice of products.

2. Reduced Stock / Capital Investment - although the cost per item may increase overall by not having

to tie up capital in stock reduces the overall costs.

3. Reduced Lead Time for New Ranges - for the reasons described in (2) barriers to entry for smaller retailers. It is also quicker to launch a new idea related to current events - eg Football Score.

4. More Unique Products - in a world where larger shops are stocking the same ranges, there is a strong

demand for products that are truly unique and both personalised and on demand offer this possibility.

5. Streamline Processes - by enabling the customer to design and sign off a product online and by creating print ready artwork, it is possible to make the production of even one product profitable.

6. Changing Profile of Consumers - younger consumers are growing up with mobiles in their hands and

they expect more original products - they enjoy the idea of creating their own art or searching for a unique design.

7. High Impact Promotions - companies like Coca Cola and Heinz have already proved the power of

personalisation as part of their marketing mix, so many other organisations are now looking into harnessing personalised products as part of their own campaigns.

One of the most exciting things about the concept is the number of products/market sectors it can be applied to. We will explore these options later in this paper in the Current & Future Markets section.

“Any industry can allow mass customization and is prone to change. Individuals need to feel

empowered when purchasing and technology has made this possible. Whether is next year or 10 years from now, mass customization will become massively popular”

“It has the potential to turn more and more people into makers instead of just consumers, and we

know from history that when you give makers the right tools and inspiration, they have the potential to change the world”

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The Technology Drivers

Hopefully the business case is now fairly clear, so let's turn our attention to the technology that makes the delivery of personalised / on demand products possible. These drivers can be divided into 3 main areas - production technology, public technology adoption and software / browser evolution:

Listed below is a brief explanation of how these make the business objectives possible:

Production Technology

1. Digital Printing - full colour printing with little or no set up time is now possible on hundreds of different substrates from T-Shirts to Greetings Cards to Promotional Pens.

2. Other On Demand Production Techniques - sublimation, transfers, embroidery and engraving also enable products to be decorated cost effectively for small production runs.

3. 3D Printing - as the name suggests, technology now allows us to create 3D objects as well as decorate existing products.

4. Just in Time Production - many factories are now set up to build products to individual specifications - their processes, machinery and logistics have all evolved to cope.

Public Technology Adoption

5. Increased Acceptance of eCommerce - has meant people are comfortable to order online and enjoy fun applications such as those that enable you to create your own products.

6. Rise in Use of Social Media - means people are sharing a lot more images and other content that are often ideal for creating products - there’s no doubt that social commerce will become an important channel.

Software & Browser Evolution

7. Smart Phones with Cameras - also mean people have a lot more images at their fingertips ideal for making products.

8. Mobile Artwork Apps & Software - artwork packages or software for manipulating images is widely available via mobile apps or cloud apps - giving us lots of ways to create artistic content.

9. HTML5 & Modern Browsers - perhaps most importantly of all, most of our web browsers now support HTML5, so it is easier for companies like ours to create fun applications that allow the customers to make product on websites, social media and mobile devices.

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Cultural Influences - Why Customers Want Personalised Product

Cultural influences also play a significant part in driving the increased demand for personalised/on demand products - not only is their a strong business case, suitable technology but people and organisations are actively seeking something different . Detailed below are some of the factors we have identified that are creating demand:

1. The Rise of the Maker Movement The Maker Movement is a global trend or sub culture where people want to create or make their own products. It encourages people to learn new creative skills, so the concept of consumers creating their own products fits perfectly into this. Sites like zazzle.com that enable makers to sell their creations to others further capitalise on the movement.

2. Mass Personalisation

Is another global trend that encourages manufacturers to differentiate their product offerings by enabling users to customise almost every part of the product. Many have credited Dell as starting this concept, which is being increasingly used in the fashion industry. Nike have built a new factory focused solely on producing personalised trainers from their www.nike.com/nikeid website.

3. Mass Customisation

According to web2print market leaders Vista Print - mass customization is about producing, with the reliability, quality and affordability of mass production, small individual orders where each and every one embodies the personal relevance inherent to customized physical products. By producing a high volume of small orders, you gain the benefit of conventional mass production.

4. Brands Culture

Brands are keen to use personalised and on demand products to keep themselves in the consumers thoughts - experimenting with different products. Just look at how Construction Equipment Supplier Caterpillar became a major footwear brand. Brands like Apple promote tremendous loyalty amongst their customers and consumers want to share their allegiances.

5. Attitude to Technology The phenomenal rise in popularity of the smartphone, coupled with the role of social media in our lives makes everyone more comfortable with creating and sharing images. Consumers are used to services like Instagram filters and the number of products and services that have sprung up around the social network alone just illustrates that tech savvy consumer want more outlets for their creations.

6. Emotional Bonding with Personalised Products

When somebody creates a product from their favourite images or their own design preferences, it is fairly safe to assume they will have a stronger bond with that product making them more likely to show their friends and inspire others to buy personalised products. The 2009 article by Mugge, Schoormans and Schifferstein called 'Emotional bonding with personalised products' published in the Journal of Engineering Design focussed on this topic in much more detail explaining “designers are increasingly focusing on the ‘emotional responses and experiences’ that products can bring about rather than on their functional benefits”.

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http://www.nike.com/nikeid

A well designed personalised product is an ideal way to deliver that emotional response and create advocates for a companies products or services.

7. The Long Tail - Unlimited Choice

The best selling book by Chris Anderson introduces us to the concept of unlimited choice and what better way to offer this than with Personalised or On Demand Products.

In summary the theory of the Long Tail is that “ our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare”.

People gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest (whether we think of it that way or not).

By printing on demand or allowing people to personalise a base design it enables the retailer to market an unprecedented range of niche products helping them satisfy the long tail but remaining profitable.

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The Software Required

By now we hope you are clear about the business case, understand the technical and cultural drivers that make personalised and on demand products an important area to consider for most ecommerce websites. This next section explores what software solutions you will need to exploit the opportunity - Mass Customisation success is dependant on having an appropriate technology platform not just a flashy website. The diagram below illustrates the core components you would need to put in place.

Product Management System

Products need setting up to enable them to be personalised online. There are lots of factors to consider and you will need a database system that enables you to:

● Choose a base image to personalise ● Apply print/customisation areas with bleed options or split into component parts ● Add image areas with image resolution checking ● Add product colour or texture options ● Add galleries of images or patterns ● Add text areas and specify fonts, font sizes and font colours ● Add predesigned templates ● Select effects to represent different decoration methods ● Select other variables such as size ● Add backgrounds and thumbnail images ● Set up different print output options

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Online Proofing (Website Personalisation App)

Although it would be possible to collect information for product personalisation without an online preview via a series of text boxes or image upload options - research by leading retailers has indicated that sales conversions are 60% higher if an online preview is available so it is highly recommended that when selling a personalised product online you factor in the ability to have a preview or preferably a live preview. Other features that are desirable for online personalisation software are:

● Ability to connect to social images sources such as Facebook, Instagram, Flickr, Google+ ● Ability to measure the quality of images uploaded ● Tools to manipulate text and images ● Ability to auto format text to fit boxes ● Ability to curve and move text ● Option to have multi sided or 3D products ● Ability to save products as well as add them to basket

On Demand products do not really need an online preview just a product image but ideally these should be set up in your product management system so that when ordered they auto create a print job in just the same way as a personalised product.

eCommerce Website

To sell products an eCommerce website would be required. The Personalisation App can either be created as part of the website build or provided by a specialist personalisation software company and added to the website via an iframe or similar technology. As a general rule only the larger organisations can afford to develop their own personalisation technology as hopefully this section of the white paper has explained - a six figure budget is generally required to do this well. That is why the most popular approach is to use packages developed by specialist providers such Custom Gateway, Deco Network or Direct Smile. Products can either be added to an existing website using an API (Application programming interface) or in many case are sold via a specialist microsite linked from a company's main website - the choice really depends on available IT resource, budget and strategy.

As creating personalised products is usually a fun experience and can take quite a few minutes many customers enjoy creating products but do not always go straight on to purchase them - research suggests conversion from creation to purchase is about 50%. There is also a real desire for users to be able to save their work or projects or products - so this feature is recommended for the app or website to improve conversions. At the moment not many simple or DIY eCommerce systems would support the sale of personalised or on demand products - the easiest way to find out if an ecommerce website could be used to sell personalised products would be to ask if the website has an API to enable third party application to add products to its shopping cart. Systems like Magento, WooCommerce, Virtuemart & Opencart are fine - systems like Big Commerce, Shopify would require a specialist app developing, For more eCommerce platforms see chart on the next page.

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An eCommerce website is not the only platform where you can sell personalised and on demand products but it is currently the most common - please see the section on Sales Platforms for more information. Current Market Share of eCommerce Platforms

Auto Artwork Creation

For the process of producing personalised or on demand products to be economic then the workflow system must generate and print ready artwork that can be auto batched. For higher volume personalisation websites it is recommended that artwork is not actually created until the customer has paid for the product - as we know that 50% of products created may not be actually ordered and when dealing with large file like images it can be important to save processing power. Large file sizes also mean artwork storage is a potential issue so cost effective cloud based storage such as Amazon S3 is often used. Most companies involved in this industry would not keep print jobs for more than say 3 months as the volume of images stored could become vast and by their nature not many personalised products are re-ordered. At this point you can either use workflow or RIP solution provided by specialist software providers such as CADLink or your personalisation software provider may also have a workflow solution. Adding barcodes to artwork to enable easy identification of a job is also a common requirement. Another important factor to consider is artwork formats as different decoration methods will need different artwork output formats:

● Sublimation, Digital & DTG Print - jpg, png or pdf ● Engraving, Embossing or Foil Blocking - eps or svg

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● Embroidery - dst or emb ● Transfer or Vinyl - vector cut line around pdf ● Product Configurator - parts list

Auto Order Routing

Another important feature is the ability to auto direct the order to the appropriate fulfilment house. Retailers are able to use a wide range of suppliers if the orders are seamlessly routed to the appropriate fulfiller based on product type. A correctly configured system should need no human intervention for an order to arrive at a printer or work station. The software system should then enable each fulfiller to perform the following tasks:

1. Download artwork 2. Print off branded delivery notes 3. Communicate with customer (if required) 4. Confirm order has been despatched 5. View an audit trail of order processing history

Order & Workflow Management

The final piece of software needed for the delivery of personalised and on demand products is an order management system. Many fulfilment companies may have their own workflow / order management system where products orders would need to be automatically transferred . This is usually done via API so all orders can be displayed and managed in a single system. As mentioned above when dealing with orders that could be as low as a single item an automated “no touch” product system is essential. Features that could be required are:

● Batching Orders by product type ● Auto Resizing Artwork ● Barcode scanning to confirm processes completed ● Carrier Integration ● RIP Software Integration ● Customer & Retailer Notifications

Example Order Workflow

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Types of Customisable Products

The infographic below illustrates the wide range of markets and applications that personalised and on demand products are currently used for. The three columns across the page focus on the strategic uses of the products and how they fit into an organisation’s product mix.

Each of the markets in the left hand column can be further broken down into industries and are detailed in the next section - however as detailed below in the Current & Future Markets section of this paper almost every industry has a potential application for a personalised or on demand product. The top 4 markets in our Infographic brands, designers, manufacturers and consumers will all traditionally be sold by retailers however one interesting dynamic about personalised products is that because specialist

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online software is required to sell them organisations that have invested in this software often trade direct via a website as well as supplying via retailers/leading ecommerce websites.

Current & Future Markets

As products can be sold in so many diverse industries from car sales to photo gifts to footwear it would be almost impossible to come up with an exhaustive list. However, detailed below are just some of the main industries where these kind of products are currently sold - but challenge yourself and I am sure you will come up with applications not listed below.

Industries currently using Customisable Products

Key Note forecasts that the UK giftware market alone will be worth almost £5bn by 2014 so this gives us.some kind of idea of the potential market for personalised and on demand products on a global scale. Detailed below is an overview of markets with potential volumes for customisable products:

Industry Details £s Million

B2C - Fashion & Footwear Create your own using product configurators 1000

B2C - Photo Gifts & Products Upload photos for prints, wall art & gifts 250

B2C - Personalised Gifts & Products Personalise a template to make unique & stylish gifts

400

B2C - Home Decor Unique home decoration like wall paper & cushions

100

B2C - Artists & Designers Print on Demand Wall Art & Gifts 500

B2C - Fashion Print on Demand Licensed content on t-shirts & clothing 300

B2C - Greetings Cards & Calendars Design your own cards & calendars 250

B2C - Trophies & Awards Personalised for achievement, incentives & motivation

250

B2C - Clubs & Charity Products Personalised or Demand to Promote membership of a club or raise money for that organisation

200

B2B - Print Wear, Sports Wear & Workwear Printed & Personalised Garments for teams, uniforms and promotions

500

B2B - Promotional Products Branded Marketing Products made with company logos for B2B promotion

850

B2B - Sign Industry Create your own signs 500

B2B - Web2Print Create your own literature, stationery, forms & promotional print from templates

1500

B2B - Corporate Incentives & Awards Add names and details to awards & gifts 400

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Even if we take conservative figures for the UK, the market for customisable products would be 6.9 Billion - in very basic terms, this makes the US & European Markets worth 69 Billion each and the rest of the world perhaps another 30 billion - making the total global market 176 Billion.

Product Groups

We have already covered the different product types at a high level, so this section breaks down further the actual product groups - however it is also worth pointing out that almost any product is potentially customisable

Personalised Gifts & Photo Gifts

Greetings Cards & Stationery

Awards & Incentives Fashion

Phone Cases Mugs & Water Bottles Sweets & Chocolates Textiles Toys & Games Leather & PU Photo Panels Keyrings & Magnets Engraved Gifts Pet Products Golf & Outdoor Calendar

Greetings Cards Invitations Postcards Thank You Cards Announcements Seasonal Cards

Crystal Awards Trophies Plaques & Shields Crystal Gifts Silver Gifts Medals Watches & Jewelry Clocks

Shoes Shirts T-Shirts & Polo Shirts Coats & Jackets Suits & Ties Hats & Caps Licensed Designs Sunglasses

Wall Art Newspapers & Books Packaging Confectionery & Food

Canvas Acrylic Collage WoodPrint 3D Wall Art

Personalised Papers Personalised Books Personalised Posters Framed Prints

Boxes Stickers Packaging Tape Bottle Sleeves Bags

Wines & Spirits Water & Juices Cookies & Biscuits Cakes Chocolate Hampers

Web2Print Workwear & Uniforms Promotional Products Signs & Display

Posters Leaflets Business Cards Counter Cards Stickers Wall Chart Stickynotes Note Pads

T-Shirts & Polo Shirts Shirts & Ties Sweatshirt & Hoodies Coats & Jackets Hi Visibility Trousers & Skirts Headwear Aprons & Catering Scrubs & Medical

Clothing & Headwear Drinkware Mugs & Ceramics Pens & Writing Umbrella & Outdoor Pads & Paper Food & Drink Executive Bags Calendar & Diary USBs

Signs Badges Point of Sale Banners Flags & Bunting Balloons Door Hangers

Teamwear Photo Books & Prints Home Decor Events

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Sports Kits Training Kit Kit Bags Balls Awards

Photo Prints Photo Books Photo Posters

Door Mat Name Plates Wallpaper Light Switches

Marques Banner Stands Wristbands Golf balls

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Ways to Customise

The previous sections have covered the types of customisable products, different market sectors and product groups - this section focuses on the different ways to customise and how these influence production methods:

The infographic opposite summarises the main methods people are currently using to customise the different types of products. Detailed below is an overview of how these relate to the specific design and production types:

● Text - adding a name to a product is commonly known as “personalisation” and is often used within a pre designed template or high quality gift. For web2print text can be full paragraphs or just drop down lists

● Images or Logos - images can be taken

from many different sources and are used on photo gifts, wall art or corporate merchandise. Galleries of clip art or images are often used to aid the creation process

● Colours - choosing single or multiple

colour / material combinations is a popular way to create clothing and fashion products. You can offer unlimited or a selected palette dependant on production capabilities

● Components or Parts - more complex to

set up but enable people to build what we call a configurable product

● Effects - can be used to simulate a

decoration method such as engraving / embroidery or used to enhance images

● Designs - templates are created that

allow users to customise part of the design by modifying text or images. As detailed previously fixed designs can also be offered where there is no user customisation but the products are printed on demand

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Sales Platforms

Although the eCommerce website is easily the number 1 channel for selling personalised and on demand product - there are many other potential options:

eCommerce Websites

As introduced in the software section earlier in this paper you can either add products to existing websites using a personalisation app or build a dedicated micro site just focussed on personalised / on demand products. This is currently the most popular way to sell personalised products as it is easier to cross sell to existing customers and use techniques like pay per click and SEO to drive additional traffic to the website - see the section on Conversion Rates to understand more about the relationship between visitors and orders.

Social Media

As so much content is now shared by social media this is potentially a very good channel - it is now possible to create apps for facebook that enable you to sell off the page. As these type of products are focussed on special interest groups it makes them the perfect content for a fan page or group - lots of likes or fans means a captive market. Over the next few years we expect this to become a very popular channel.

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Instore / Kiosk

As detailed earlier these kind of products need some form of terminal to create and sell. Many retail outlets have kiosk systems which are essentially a locked down computer in a display stand which could be suitable for selling personalised products if they have an Internet connection. However there is now an easier and cheaper alternative in the tablet - there are many secure retail cases for tablets and it is fairly simple to use a personalisation app on a tablet enables personalised and on demand products to be sold Instore. The fulfilment can then either be handled off site via a network of fulfillers or by using modern printing equipment it can be produced Instore on demand. This is a particularly powerful idea for personalised products at tourist attraction or to enable a shop to offer a massive range of designs that can be supplied on demand. At a simple level this concept has been used at Amusement Parks like Alton Towers selling photos, key rings and phone cases but can also be found now at major sports clubs like Manchester United who do a substantial turnover on personalised products in their club superstore.

eMail & QR Codes

As a personalisation app is in simple terms just a URL, it can easily be added to an email or turned into a QR code. This has several important implications for use as a sales platform. As we cover in more detail in the Conversion Ratios section, a targeted email campaign can attract conversion rates of up to 40% - with a personalised product you have the ability to insert a link into an email that carries forward personal details from the email onto a product and allows the consumer to buy directly from that link - as you can imagine this has an even bigger impact on conversion. By creating a QR code from a link, it enables you to sell personalised or on demand products anywhere without the need for a physical shop - imagine walking around a historic building and having the opportunity to purchase products including your family to remind you of your visit from your smartphone or perhaps as a souvenir at a major sporting event just by scanning a QR code.

Other Websites

Using the link concept described above you can also sell product on non e-commerce websites such as blogs, information and catalogue sites. This enables you to add products next to appropriate content and reach target audiences more effectively.

Marketplaces

It is currently quite difficult to sell personalised on marketplaces such as eBay, Amazon and Play as they do not allow you to use external links on their pages so you cannot launch personalisation apps. However as these marketplaces have a lot of traffic they are ideal for selling on demand products where the orders can be sent direct to an order management system which creates a print job for the product ordered in the same way as if it was a one off personalised product. At a very basic level the more SKUs you put on a marketplace like Amazon the more sales you will get as we know they already have the traffic. It is also anticipated that in the near future the marketplaces will allow the creation of customised products online and they themselves represent a significant sales opportunity.

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Critical Success Factors

There are 4 key factors that dictate how easily an organisation can add personalised / on demand products to its range. In simple terms if an organisation can meet all 4 criteria then they have the most chance of success.

1. Products - there are many trade suppliers that can now offer a fulfilment service for personalised / on

demand products if a company does not have its own production - so really all companies can boast of this option. It is also fair to say that equipment has also improved and it is fairly easier to purchase multipurpose digital printing equipment.

2. Content - this is really important to achieve that emotional attachment to products discussed in the

cultural factors section - do you have any content for products? - logos, images, licenses and designs that would interest new or existing customers.

3. Customers - have you got many customers already where you can cross sell these products.

4. Website - as demonstrated in the next section Conversion Ratios if you can deliver the visitors then

you can calculate your returns and research is fairly clear on average selling price and conversion %.

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Conversion Ratios

Typical eCommerce Conversion Rates:

Source - Monetate eCommerce Quarterly Survey

The good news is that typical conversion rates for personalised/on demand products are considerably higher because of the emotional attachment to something created yourself and that fact that with on demand, you can more accurately target unique content to a user's specific interests. Typical conversion ratios are as high as 7.5% - more than double conventional ecommerce products.

The most important factor that drives conversion is the ability to see an online preview of your product before you buy. Research carried out by leading personalised gift suppliers indicates that conversions are typically 60% higher with this feature enabled. Another key factor is the ability to save / share a created product - research indicates that around 25% of all saved products do then convert to order and shared products drive visitors with a higher than average chance of converting. The final factor to consider is traffic source:

● EMail drives higher conversion as it’s possible to target a product personalised for the recipient. ● Social media can also be very effective, as you can target products from relevant content on a page or

group - such as a club or hobby.

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Case Studies

There are hundreds of great examples of companies adopting personalised and on demand products as part of their business strategy, but detailed below are some very successful high profile sites that best illustrate the products sold and markets supplied. Moonpig - Personalised Cards & Gifts B2C Website http://www.moonpig.com Approx Turnover - £55 Million Moonpig have revolutionised the greetings card market in the UK and are one of the pioneers of the entire personalisation market. They have changed the way the Greeting Card industry sells cards and could be considered a key factor in the recent bankruptcy of Clintons Cards. Now owned by photo gift company Photobox, they have linked the two websites and are starting to push into other related products that can be personalised. They are a great example of taking the personalisation concept into a new market and gaining rapid market share. Nike - Configurable Trainers B2C - Product Range Extension www.nike.com/nikeid/ Nike have set up a dedicated production facility to enable mass personalisation of shoes & boots. This is linked to a slick website that enables consumers to create their ideal shoe or boot. As the factory has been built to enable the benefits of mass production for individual orders, it is a great example of creating a new product to fulfil,customer demand. Nike have responded to the demand for personalised products and changed their production to accommodate. Coca Cola - Personalisation for Marketing B2C & B2B https://www.mycoca-cola.com/uk/ In 2013, Coke discovered the power of personalisation when they launched their campaign to add names to their standard bottles. This concept has then evolved to enable them to offer their distributors and end users opportunities to create personalised coke gifts. This is a great example of both brand building and using personalisation to sell more products. Vista Print - Mass Customisation B2B Website http://www.vistaprint.co.uk/ Approx Turnover £1.5 Billion Market leaders in web2print for traditional print products like business cards & leaflets. Vista Print are now branching out into other product lines such as clothing and promotional products, where their concept of large volumes of individually customised products have all the production advantages of mass production can also be applied. They are also a great example of enabling customers to design online and then manage production using computer integrated manufacturing as described in the The Software Required section of this white paper. Zazzle - On Demand Products B2C Website http://www.zazzle.com/ Approx Turnover £250 Million Great example of how to sell both user defined content (customer designed product), licensed designs and personalised products. On Demand Product sales outperform ‘design your own’ by more than 10 to 1 and their website is a great example of the concept of unlimited choice, with over 1 Million products available to purchase on demand. Zazzle also put computer integrated manufacturing and mass personalisation at the heart of their business philosophy.

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http://www.moonpig.com/

http://www.nike.com/NIKEiD

https://www.mycoca-cola.com/uk/

http://www.vistaprint.co.uk/

http://www.zazzle.com/

References

Detailed below are the main academic, company and media services that have been referenced in this white paper and have been used to research and test the concepts explored in this white paper. Mass Personalisation 500 - Dominik Walcher and Frank Piller http://masscustom.info/mc500-study/ Disruptive Technologies for eCommerce - http://netonomy.net/2013/07/30/three-technologies-that-are-disrupting-online-retail/ Making it Personal - Bain & Co http://www.bain.com/publications/articles/making-it-personal-rules-for-success-in-product-customization.aspx InfoTrends Highlights Key Market Drivers in the Online Photo Services Market http://www.infotrends.com/public/Content/Press/2012/03.19.2012.html Is Mass Customization the future of eCommerce? http://netonomy.net/2014/04/03/mass-customization-future-ecommerce/

Having It Their Way: The Big Opportunity In Personalized Products http://www.forbes.com/sites/baininsights/2013/11/05/having-it-their-way-the-big-opportunity-in-personalized-products/

PIRA Global Print Trends http://www.slideshare.net/mobile/adampage1976/global-print-markets-to-2016 The Long Tail - Chris Anderson http://www.longtail.com/about.html Emotional Bonding with Personalised Products https://drive.google.com/file/d/0B-v2Btf_xVSsMTM5MmMyNTEtNWU5MC00ZmEzLTk0OGItOGNmZDBiNmY1NzQ3/edit?usp=sharing Monetate eCommerce Quarterly Survey http://www.monetate.com/research/ Vista Print Investor Relations http://ir.vistaprint.com/phoenix.zhtml?c=188894&p=irol-IRHome

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http://masscustom.info/mc500-study/

http://netonomy.net/2013/07/30/three-technologies-that-are-disrupting-online-retail/

http://www.bain.com/publications/articles/making-it-personal-rules-for-success-in-product-customization.aspx

http://www.infotrends.com/public/Content/Press/2012/03.19.2012.html

http://netonomy.net/2014/04/03/mass-customization-future-ecommerce/

http://www.forbes.com/sites/baininsights/2013/11/05/having-it-their-way-the-big-opportunity-in-personalized-products/

http://www.forbes.com/sites/baininsights/2013/11/05/having-it-their-way-the-big-opportunity-in-personalized-products/

http://www.slideshare.net/mobile/adampage1976/global-print-markets-to-2016

http://www.longtail.com/about.html

https://drive.google.com/file/d/0B-v2Btf_xVSsMTM5MmMyNTEtNWU5MC00ZmEzLTk0OGItOGNmZDBiNmY1NzQ3/edit?usp=sharing

https://drive.google.com/file/d/0B-v2Btf_xVSsMTM5MmMyNTEtNWU5MC00ZmEzLTk0OGItOGNmZDBiNmY1NzQ3/edit?usp=sharing

http://www.monetate.com/research/

http://ir.vistaprint.com/phoenix.zhtml?c=188894&p=irol-IRHome

About Custom Gateway

As we hope this paper illustrates, we have a deep understanding of the mass customisation marketplace and have become an important strategic partner for many of our clients in implementing new strategies or launching new businesses. We are passionate about the concept of personalisation and are focused on becoming global leaders in end to end software solutions for product manufacturers, printers, retailers and entrepreneurs in both the B2B and B2C marketplaces. Our Custom Product Platform (CPP) offers what we believe to be the world's first end to end solution for all the modules of software needed to implement a personalised/on demand product business, as described in the section on The Software Required. Based in the UK, but now with offices in the US & Europe and Asia, we currently have a customer base of more than 200 companies and our software is used on in excess of 1000 websites processing thousands of orders every day. Customer can either use our whole suite of applications or connect to individual components via our API For example add print jobs created on a third party website to our order management system or add print jobs from our personalisation app to a third party production system. Here are just some of the brands who have product delivered by our systems Google, Coca Cola, Hallmark, Marks & Spencer, Boots, Punch Taverns, Skinit, Cewe, Jessops, Tesco, Kruidvat, Lifestyle Fitness. For more details about our solutions please contact: UK - [email protected] Europe - [email protected] US - [email protected] Rest of the World - [email protected] Or visit our websites and blog http://www.custom-gateway.com https://www.facebook.com/customgateway https://www.linkedin.com/company/customgateway/ http://www.productpersonalisationapps.com/ http://www.custom-gateway.com/blog/

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mailto:[email protected]




http://www.custom-gateway.com/

https://www.facebook.com/customgateway

https://www.linkedin.com/company/customgateway/

http://www.productpersonalisationapps.com/

http://www.custom-gateway.com/blog/

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