Business selling shirts to handbags and even consumer packaged goods are realizing the importance of letting buyers design their own products. According to a research by Deloitte, nearly 40% of consumers are saying they have interest in personalized products and services. One in three consumers is interested in personalized products, whereas 1 in 5 customers are actually buying a personalized item. Nearly 44% of consumers in the age group of 16-24 old and 47% of consumers in the age group of 25-30 have interest in purchasing a product that they helped in designing.
Ben Perkins, Head of Consumer Business Research at Deloitte said – “Businesses are now postponing production until the latest point possible to allow individual customization. Beyond the ability to provide more customized products, postponing production can help reduce inventory levels and ultimately increase efficiency”
More interesting facts coming through!
1. Most customized products are in the following 3 categories
- Holidays (30%)
- Clothing (25%)
- Furniture (20%)
2. More than 70% of consumers are willing to pay a premium price for customized products
3. According to a survey of more than 1000 online shoppers by Bain & Co, it was found that
- 10% of online shoppers have already tried customized products
- 25% to 30% are planning to do so
- Shoe sales in the United States account for $45 billion and if the online customization accounts for 25% then the overall sales will account for $11 billion, which is huge
Personalised Product Works, but why? Here is the Psychology!
- Customers instead of being a passive browser, become the co-creator of the value. As they create their own product, they become a part of the product development process. As it meets the requirement of the buyer they are more likely to buy the customized product even if they were not planning initially.
- By influencing the look and feel of a product, it creates an emotional attachment among the buyers. Therefore, the finalized product reflects a buyer’s individual taste and gives a glimpse of the customer’s inner world. By taking part in creating their own product, it creates a psychological ownership which eventually leads to the actual purchase.
- For example, high school teachers get a sense of satisfaction when they see that the children they had educated have become successful. Likewise, it gives a sense of satisfaction to buyers when they see that a product they helped create will reach them and will become a part of their daily life. It gives a feeling of being ‘mine’ even if it’s not legally theirs before purchase.
- When consumers design a product of their own design they value that object more after possession. This is termed as endowment effect. An experiment showed that people are less likely to trade goods that they helped designe suggesting that endowment effect was established.
What does it Really Imply?
Online Buyers will Pay More to Own Customized Products
It concludes that online buyers will pay more for the customized products they have designed. They would also consider the additional cost reasonable as they consider self-designed products valuable.
Women Love Customized Products
When it comes to purchasing items, women are more focused towards the experience of the purchase. Whereas men just want their stuff and bail out. A study titled ‘Men Buy, Women Shop’ suggests significant differences between the shopping habits of men and women. Product after customization can cater women shoppers, and businesses alike to reap huge sales from it.
Customers should give effort but not too much
Although it has been found that customers giving effort to design their own products are likely to value them, if they give too much of an effort, they are likely to bail out by considering it as inconvenient or irrelevant. So, online sellers need to focus more on customers adding value than they adding effort.
Finally, it can be concluded that online product customization is the latest trend among buyers and the biggest opportunity for ecommerce businesses. On the other hand, online sellers need to provide an engaging website design and user experience to buyers. Moreover, they need to produce innovation, development and even take into account customers’ purchasing habits and psychology.
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August 2, 2019