Consumer Products Blog
How personal is personal?
By Duncan Smith - Last updated: Wednesday, July 21, 2010
Personalised Panel
The second Cambridge Network Consumer SIG meeting was held last Wednesday night. The topic was personalised products, and there were excellent talks from P&G, Hypertag, Samsung and Tonejet followed by a lively discussion. Having been somewhat busy I’m a bit late to write a review as I did last time, and anyway Matt Scofield has done that very nicely here. So instead here are some thoughts on the topic.
What do we mean by personalised products? Do we mean a “batch of one”? Not necessarily, and the personalisation discussed seems on reflection to fall into four categories, with their own challenges.
Strategic Personalisation
Best practice marketing is an example of personalisation – targetting products at specific customer profiles. We were introduced by P&G to “Charlotte”, one of P&G’s target consumers for certain brands. She is an early thirties mum who wants the best for her family, likes to be active. Innovative consumer product development companies have of course been doing this for years, but we still meet many who don’t have such a clear view as P&G. We tend to introduce them to Martha and Steve (see slides 40 and 41 here) who are, the personae we often use to make this point. The challenge is to address as large a market as possible with the least number of SKUs to control cost. P&G have certainly achieved this with Charlotte – although she is a specific (albeit fictional) consumer, she represents 24% of the market for that product. And using her in their innovation process has driven the successful development of products like First Defence.
Post-sale personalisation
I can personalise my phone, either by adding physical accessories or by changing the user interface and applications to suit my requirements. Why not other products? This may only be applicable to consumer electronics, such as the latest generation of TVs, but even here there are many challenges associated with making this kinds of customisation coherent for the consumer, although Samsung are working hard at that, even looking at products where the applications can be developed by the consumer.
Pre-sale personalisation
Is it possible to make individual products for each consumer creating a “batch of one”? For high value products like cars this is economically possible, but how can it make sense for shampoo or beer? At least part of the answer lies in the packaging. How it looks on the shelf is still the “first moment of truth” interaction with the consumer for brands like P&G’s, despite advertising and internet sales. It is here that the consumer decides whether the product is sufficiently right for them for them to put it in their trolley, and this is all about the packaging. Digital printing technologies are allowing this packaging to be done in increasingly small batches, made just-in-time, without escalating costs too much. However digitally printed packaging still only accounts for 3% of the $450Bn packaging market, which suggests to me that the high cost of changing over to digital technology, and its inappropriateness for very high volumes, is what constrains this approach.
Point of sale personalisation
If I can mix Dulux paint to my individual taste at a hardware store, why can’t I get my own shampoo, or smoothie, or perfume, on demand? Or why can’t I have my own personal packaging? Because again, the economics don’t stack up unless the vast majority of your product is homogenous, with only the tiny part, e.g. the pigment in paint, providing the differentiation.
But I wonder how much customisation of the product is actually required to make the consumer feel that they have had a personal experience… maybe it is more that the sales process and the interaction with the brand that has to feel personal. Dynamic pricing is more common than you might think – McDonalds do it routinely, changing their pricing through the day – so we are only a small step from individually tailored pricing and offers. If my shopping trolley knows who I am, whether from my loyalty card, the proximity of my phone or even my credit card, then that exclusive offer just for me is an obvious step. Alternatively, why customise the actual packaging when I could use augmented reality to personalise it for me? I could hold up my camera phone to a generic product, and the phone could read the 2D barcode and superimpose, on the picture of the label, custom information on its suitability for my dietary regime, hair colour and so on.
This may sound very sci-fi but the technology to enable this is only a few steps away and, actually, the cost for this type of personalisation may be partially passed on to the consumer, by virtue of including their phone in the system, or at least to the retailer where there is already a technology-rich environment keen for differentiation. This may make a lot more economic sense than pushing up the cost of the packaging to make it personalised.
There’s a pause now for the summer but the next #ConsumerSIG event . That was a hint by the way – if you are of a tweeting bent then you can follow the events using that hashtag. If you don’t you can always actually come to the event and enjoy it in full 3D reality.
