Custom products market landscape

Here’s a nice graphical representation of the customization, personalization, mass customization, crowd-sourcing market landscape. Pretty!  Thanks, Musen Lin.

The building blocks of social commerce

Send the Trend founders

Send the Trend is a great example of a ground-up social commerce company.  In a video interview with Entrepreneur Magazine, CEO Divya Gugnani explains the company’s core DNA:

Curated content

Like Fab.com or Gilt Group, Send the Trend takes on the role of fashion curator by constantly editorializing their product mix.    Visitors who come to the site expect a level of fashion quality, just as they would from any trusted luxury brand.  Consumers depend on Send the Trend’s fashion expertise and contribute their own style by creating their own MyStyle page.

Social by design

The brand experience is based on the way fashion shoppers inherently search, browse, and share great fashion finds, ie social by design.   The curating and sharing environment created among like-minded shoppers generates a community ecosystem.

Send the Trend already has a strong social media presence with nearly 250,000 Facebook fans and 12,000 Twitter fans.  Additionally, they use Youtube to publish rich content, Pinterest for first-view photos, and Tumblr for an inside peek at the company itself.

Social incentives

For starters, Send the Trend uses a classic “tell a friend” marketing technique.    Users are asked to invite a friend with $10 cash credit.   When that sendee purchases, the sender gets $10 credit.

Like Polyvore or Pinterest, users can collect items and place them in their virtual, hosted collection.  The user is then asked to promote their MyStyle page.  They earn a commission when someone registers on the site or purchases via their MyStyle page.

Additionally, users are literally given store credit when they share Send the Trend items on Facebook or Twitter.   Users become brand advocates just by sharing their favorite items with their network.  The social insight here that fashion-find sharing feels nature because shoppers have always behaved this way, even before social media.   Send the Trend community members are proud of their finds and happy to share them among their fashionista friends.

Geo targeting + personalization

In addition to product curation and incentives to share, the Send the Trend website detects your location and services geo-specific recommendations, like sweaters for visitors from the Midwest and sunglasses for visitors from California.     Together the combination creates a more personalized browsing experience.

Focus on sales

Lastly, Gugnani emphasizes the importance of sales in every faction of the business.  Remember that your brand and all your shopping features are built to sell.  The entire social commerce flow needs to optimize the shopping experience.  The entire brand experience, including all the social building blocks, is a finely tuned, guided sales experience.

Democrotizing design-your-own tools

Instagram filters

Innovation often focuses on improving usability in order to access a broader audience.  Photography is a good example.  You can buy a powerful, complicated SLR camera and take a photography course, or you can buy a point-and-shoot camera and get started right away.  Further, you can upload any basic image from your phone to Instagram and add a filter without having to know anything technical about film processing.

The Internet economy has always been focused on improving usability and empowering the masses.   Successful Internet companies provide self-service tools that allow non-technical users to engage with their products and services.  eBay, for example, empowers anyone to become an online merchant, SurveyMonkey empowers anyone to write and deploy their own web survey, and WordPress empowers anyone to become a blog publisher.   The theme is “no programming skills required.”

Any product or service that can be templatized or configured via an admin panel will be.   We’ve written previously about such trends as “democratizing fashion” and the proliferation of product configurators (customization) and online design tools (personalization).   Here are a few examples of the next frontier of the digital do-it-yourself movement.

Design your own video game

In the education space there are many self-service training tools like CodeAcademy, Treehouse (no relation), Lynda.com, and Khan Academy that give aspiring web developers the tools to learn new skills.    Along these same lines, Game-o-matic allows aspiring game developers (or aspiring computer science students) learn the basics of object relationships through an interactive video game development platform.   The interface is drag-and-drop intensive with no exposure to the game code itself.

Design your own toy

Cubify lets anyone design their own toy.  The 3D product configurator allows a user to make functional and color selections.    According to Cathy Lewis, Vice President Global Marketing, 3D Systems,  “Cubify Bugdroids underscores 3D Systems commitment to democratize creativity.”  Indeed the online product customization tool enables anyone to play the part of an industrial designer.  The experience is limited and guided, of course, minimizing the risk of user error.  “Creativity loves constraint.”

Cubify

Similar to the maker’s movement transforming the US economy, we’re seeing an increased interest in “pride of authorship.”

As we’ve often written on this blog, there is a fine line between designing and shopping.  Designing used to mean manual aesthetic creation by trained professionals, while shopping used to mean selecting and buying mass produced products off the shelf.    Now we’re seeing the worlds of product design, product selection, product customization and crowd-sourcing merge together as the Internet continues to produce innovative, browser-based, do-it-yourself, design / shopping tools for the masses.

Personalization tools round-up

Customization is a $1 Trillion market

Personalization, in the context of ecommerce and mass customization, can be defined as providing consumers with a web-based toolkit to input custom text and images on to the surface of a product.  Most often personalization applies to printable commodity products like t-shirts, mugs, tote bags and stickers.  Anything that can be printed can be personalized.

How big is the personalization market? 

According to the CafePress SEC filing, “Based on 2009 U.S. Census Bureau data, we estimate the U.S. market for customizable retail goods is approximately $1.0 trillion.”

What is personalization?

A personalized mug

Personalization can also be classified as cosmetic customization, as per Joe Pine’s definition:  “Cosmetic customization, where a standard product is presented differently to different customers. The cosmetic approach is appropriate when customers use a product the same way and differ only in how they want it presented. Rather than being customized or customisable, the standard offering is packaged specially for each customer. For example, the product may be displayed differently; its attributes and benefits advertised in different ways, or the customer’s name may be placed on each item.”

As outlined in a previous post, personalization services are built with online design tools, which is a separate kind of toolset from Treehouse Logic’s unique hosted product configurator solution.  These design tools are essentially hosted editing tools – like a lite Photoshop in the cloud.  And, much like desktop editing tools, these design tools often include desktop-like navigation features like drag-and-drop.

Here’s a snapshot of a few sub-segments of the personalization market.

Print shops

Dozens of online printers offer personalization.   Examples include Custom Ink, Uber Prints, and Funky T Shack.   (Yes, seriously).   These consumer-facing printing companies offer design-it-yourself web tools that include text overlay and image upload.  Once an order is taken, printing and shipping are handled at the company’s manufacturing facility.

Personalization marketplaces

Additionally, print shops like Zazzle, CafePress, and Spreadshirt invite the community of quasi-designers to post their designs on their site and sell it to the public.  Like an eBay or Etsy marketplace, buyers and sellers converge in an ever growing network of virtual goods.  Designs are crowd-sourced by micro-entrepreneurs, and the network makes money by charging a commission on every sale.

This consumer/designer model differs from other crowd-sourced print companies like Threadless that require that designers submit more professionally designed image files (in Photoshop or Illustrator format) rather than using standards-based, consumer-facing browser based design tools.

Embedded design tools

Threadless drives customization innovation

Some software companies make their front-end design tools available to back-end printing businesses.  Spreadshirt offers an API that enables anyone to embed and skin their design tool, but printing itself must be processed via the Spreadshirt supply chain.  Inksoft offers printers a front-end design tool template that they can used to process print orders, but the template is not very flexible.

The worlds of customization and personalization toolkits are colliding and evolving quickly.   Although many of these t-shirt designers brought innovation to the market by publishing design tools on the Internet, the market is demanding more flexible toolkits that allow brands to build their own branded personalization experiences.  We’ll see a lot of disruption in the personalization space in the next few years, especially now that social commerce is taking a leading role in ecommerce innovation.

Customization gets celebrity endorsement

Maybe what the mass customization movement needs is more celebrity endorsements?  Golf has always been an example of an industry that is heavily driven by professional endorsements.    Golfers want to put like Tiger, drive the ball like John Daly, and win like Arnold Palmer.  And why wouldn’t they want to design their own golf clubs with an online product configurator like Phil Mickleson?

Golf club customization

“Golf is already the most personalized sport there is in terms of custom equipment options, and our new udesign by Callaway platform brings personalization to a new and exciting place,” Jeff Colton, SVP of Global Brand and Product at Callaway said. “The opportunity to design your very own driver in the colors of your favorite team, alma mater or whatever you happen to feel looks best has never been offered on a mass scale.”

Customization meets social commerce

Custom jeans

Mass customization legend Frank Piller recently posted about custom jeans up-and-comer Getwear.   “The website seems to be very carefully designed and somehow a “best of breed” of best practices for a good co-design toolkit.”

Is Getwear any really any different that other custom jeans companies Indi, Make Your Own Jeans, and DoMyJeans?

GetWear believes that their site is new and different.  “None of them is social,” explains Yaakov Karda of Getwear.  “It was you (the customer) and the company.  Basically, it is an analogue of web based “atelier”. There’s not much fun in buying atelier made clothing for young people; the concept looks and sounds outdated.   Getwear is all about social commerce. From my point of view, mass customization has perfect potential if coupled with community but will not succeed on the large scale if it is not.  All other “custom jeans” businesses mostly target people with special requirements (and though an established need for a custom product). It’s a very limited market (and with harsh competition).”

Are Buyer / Sell communities "social?"

Is Getwear an example of social commerce?  Yaakov is referring to “crowd-sourced,”, not “social.”   Of course co-creation (ie open innovation) and social are not the same thing, but they are often confused.   Does social just mean community-enabled or does it imply tapping the trusted opinions of friends or connections?   Certainly, giving quasi-designers the ability to sell their creations in your marketplace is democratic and taps into the power of network effects, but it does not merit the title ‘social commerce.’

Social as a collaboration enabler

Nicholas Marx of Besposkable says this about their open portal approach:  “Through social, we’re enabling collaboration: both sides – buyer & seller – can make edits to our product configurators. We’re finding that many people want a relationship with the maker of their things. They want to be able to ask them for their advice, etc. Only the personal attention of single craftsmen or a small team can provide the attention to detail needed for true customization. We’re finding that people want to buy from other people, not really from factories. I think many of the custom DIY outfits out there are missing that.”

Although the Bespokeable model leapfrogs conventional buyer / seller marketplaces like eBay by enabling creative collaboration, this may not merit the title “social commerce” as it doesn’t tap into power of trusted referrals.

Social commerce as a lead generator 

Pinterest is probably the best example of social commerce in that it taps the tastes of your Facebook friends.   Pinterest enables an aspirational, “pre-shopping” experience rather than a conventional yellow-pages marketplace.   Like Facebook, Pinterest feels more at home as a marketing tool than a sales tool.

 

So you want to sell custom products? (Part 2)

Here at Treehouse Logic we talk to a lot of start-ups about launching new, design-your-own business models.   This post is second in a series of tips for new entrepreneurs entering the mass customization space.   Here is the first post.

Remember the product configurator is a sales tool

Limit the amount of control your configurator offers.  Your customers wouldn’t want to walk into your retail store and be handed scissors and raw material, would they? Yes, they want to be involved in the design process, so give them control, but insist that options and combinations they select have been pre-approved by you.   Customers depend on your expertise to design, build, and deliver the product.

Don’t ask your customers to make difficult design decisions.    The backlash of control is frustration.  Customers who ask for power will in fact abandon the process if they feel like they are asked to do too much work or make tough style decisions.

Keep in mind that the risk is not necessarily in a long purchasing process, but in creating a difficult purchasing process.  The same customer who abandons your website after trying to design a custom dress shirt for 40 minutes will happily spend 4 hours pinning images on Pinterest.   Why? Pinterest is easy, intuitive, social, fun, visual, and low risk.   Configuring a dress shirt is loaded with risk.

Self-measurement

Many new build-your-own companies get distracted by new web technology and sexy visualization gimmicks.   Customers don’t need a space-age hologram of your product; they just need an accurate, elegant picture of the customized product to help increase their confidence.    Remember, you’re not in the technology business, you’re in the customer satisfaction business.   Simplicity is key to sales.

Avoid self-measurement

Online apparel retailers have the highest return rate in eCommerce. On average, 1-in-4 garments bought online are returned to the retailers. The return rate is higher – over 40% – for fitted and more expensive fashions. Most of the returns are due to bad fit.”

Anytime you are asking customers to step away from the computer to find a measuring tape and measure themselves you are losing a big chunk of your audience.    There is too much risk of error.

No one has cracked “the fit problem,” but many are struggling with the measure-yourself-at-home approach.

Custom by design

Many companies fail at custom products because it contradicts their core culture.    Company’s like Levi’s could not simply bolt-on customization to their mass production business.  Build your culture and business model around customization from the ground up.     Just like many new business models are re-defining themselves as “social by design,” (like Spotify for music, or the Washington Post for newspapers) build up your company to be “custom by design” at it’s very core.