Last Updated on December 18, 2023 by Tanvi
E-commerce has changed quite a lot over the last few years or so. Thanks to advances in technology and the convenience of delivery people have purchased as many goods online as they would have from brick-and-mortar stores. Grand View Research estimates that by 2027, the e-commerce market will grow to over $27 trillion where people compete to get even a percentage.
That is a large market size but the e-commerce market is over-convoluted. Different companies are selling the same type of products. That is where the product customization market is changing how we think about e-commerce. It gives customers a connection with the production of their customized product. However, there are difficulties of the product customization business.
So here, I will discuss the major problems product customization business and how you can overcome them.
What Is A Product Customization Business
Business.com quotes a line from Stan Davis’s book Future Perfect where he defined customization and personalization. He called personalization a marketing strategy to create a personal relationship with customers. On the other hand, he called customization as a product or service modified to meet individual customer’s demands. And that is what the product customization business is.
A product personalization business allows customers to customize the product they want. The customer can design the product and the business can provide the customized product according to customers’ specifications. This makes the customer feel closer to the product and closer to the business.
This is all possible with the different product customization tools available for e-commerce businesses on platforms like Shopify. It puts the customization directly in the hands of the customer. Customers can add the colors they want, customize texts on the product, and even put pictures of family on mugs and t-shirts. There are even e-commerce companies that provide engraving on jewelry.
These types of businesses resonate with the customers and it shows in McKinsey & Company’s 2021 study. They found that 71% of customers want personalized interaction with the business and 76% show frustration when they aren’t given that opportunity. Those are not small numbers and show that customers want more and more customization options for their products.
But of course, the customization business is not without its problems.
7 Problems of Product Customization With Solutions
The difficulties of product customization business are many. Let’s explore the different types of problems one can encounter in such a business. Also, I will help provide simple solutions to the problems.
- Choosing The Right Product Personalizer
- Financial Challenges of Personalization
- Meeting Individual Needs As Customization Business
- Over-customization and Purchase Paralysis
- Maintaining Quality Of Personalized Products
- Delivery Time For Personalized Products Production
- Return Policies For Customized Products
Problem #1 Choosing The Right Product Personalizer
The difficult part of a customization business is choosing the right customization tool. You could have in-house software implemented, but that takes money and time. Larger organizations may have the capital, but small and mid-sized businesses will struggle.
If not make a product personalizer software, the next option is to buy one. But this poses the other problem: which one should you choose? E-commerce platforms like Shopify have third-party product personalizers you can implement for your online store. Yet, there are so many of them that going through them individually is a nightmare for any business.
Solution: Look For The Right Features In A Product Personalizer
There are certain features that you should be looking for in a product personalizer. So let’s go through 5 such features you should be looking for and why:
Free trials: Find a product personalizer that offers a free trial because it is a risk-free option. If the software is not up to the mark, you can cancel the free trial. It is a simple feature but helps solve the problem of buying many product personalizer tools just to test which one is right for you.
Rule-based personalizers: The problem with customization is over-customization. The image of the customization might be too large, or too small to be made. But with logical rules, you eliminate that. Instead, you can control the quality of the customization and ensure customers get what they designed.
Friendly user experience: Allowing customers to make customization needs to be easy. That means the interface of the personalization has to be user-friendly. The customers don’t face frustration when using the product personalizer and you get a happy customer willing to use it.
Dynamic price generation: Giving access to customers to customize is great. However, customization can increase the cost of the base product. And increased costs discourage customers from going through with the purchase. Personalizers with dynamic price generation let them see how much their customization cost in real-time. There are no hidden costs; the customers get exactly what they want to pay for.
Supported files: Different products will require different types of printing methods. Some might require DTF (direct-to-film) or screen printing. So make sure you get a product personalizer that allows the option for different files so it is easier for you to work with the design.
Problem #2 Financial Challenges of Personalization
Custom goods are difficult to make. They have to match the specifications set out by the customers. Either you have to buy custom parts or have to make it from scratch. Because customized products can’t be mass-produced, it increases the cost of production.
Take ScienceDirect’s product customization case study using the shoe company Shoes On Prey as an example. Shoes On Prey was a business that allowed full customization to all parts of a shoe to their customers. They were doing great when they started in 2009. But with increased costs in production, they had to shut down business in 2019. The profit margins shrink and make it less feasible for businesses to produce the goods.
To recover the cost the customers are the ones who are facing the additional cost. Increased prices lead to established customers looking elsewhere. This may be competitors or other named brands for the same type of customized product. This leads to decreased sales for your business. Decreased sales lead to less revenue and recuperating costs will be difficult.
Solution: Start Small And See What Customization Works
Customization is not something that all businesses can afford. So instead, offer customization on a smaller scale to see the results. It doesn’t increase costs much and is safer than going full customization. If the costs don’t increase by much, the customers don’t have to suffer from drastic increases in costs.
With a smaller scale, you lower the risk and you get new customers trying out your personalized products. It can be only one product or certain parts of the product that you offer customization. But with time, you get to see the results of this change. As a business, data analytics on personalized products is crucial before expanding the process. With this data, you can be more confident in whether your customized products doing well or not.
Problem #3 Meeting Individual Needs As Customization Business
As Marketing Tomorrow puts it: everything from customization to delivery caters to a market of one. That is a big problem for a product customization business because you have to meet the individual needs of customers. If the customers aren’t happy with the product, that means you failed to deliver. Now multiply that with other possible customers wanting your product. It increases the pressure on your business to deliver.
Solution: Being Adaptable To Customer Demands
There is no easy way to say it, but adaptability is the only solution to such a unique problem. Every customer is different in their own way. The products that they want to be designed will also reflect that. So adaptability is the only approach you can take.
When I say adaptability, what I mean is being prepared to change to meet their demands. This could be in the form of having an extra stock of parts that you can customize again to satisfy their needs. Or it could be accepting the loss of stock and starting the customization again.
However, make sure that your business can handle the management and operations when such a situation arises. Talk to the customer and get their input to help make the customization as perfect as possible.
Problem #4 Over-Customization And Purchase Paralysis
Customization is great but over-customization might confuse your customers. Giving them 1000 customization options will lead to confusion and hesitancy. And eventually, that hesitation will lead to purchase paralysis. Customers will go elsewhere for a customized product.
Take Strategy Business’s example of Chrysler vs. Toyota and their customization. Chrysler offers over a million different customizations to Toyota’s 20,000 customization options; both for only one model. Yet Toyota is thriving with that particular car model and Chrysler is suffering. It’s a great insight that too much customization causes purchase paralysis because it’s too complex for the customer.
Solution: Limiting Customization And Offering Help
Limiting customization might seem counterintuitive, but it limits purchase paralysis. With fewer options, customers are more likely to go through with their purchase. So instead, give your customers templates and design ideas for their customization. By inspiring customer designs, they are more satisfied with the end product.
Templates and how-to tutorial videos will also encourage more customers to try customizing products and bring in possible sales. Additionally, if you have designers they can help the customers. Customers will tell you how they want the customization and you can make the design according to those specifications. It eases the purchase paralysis and ensures customer satisfaction.
You could offer live-chat services so that you can help the customers while they are customizing. This way, the customization becomes a collaborative effort. The customers will be more likely to be satisfied with the product and you can ensure that the final product will be as good as the design the customer made.
Problem #5 Maintaining Quality Of Personalized Products
The quality of standard products can be maintained. There is little differentiation between them and can be easily produced without diminishing the quality. However, personalized products have more chances of not being up to the quality that customers expect.
Add third-party suppliers who are handling the customization, the quality might vary for each personalized product. If the customers aren’t happy with the quality, this could lead to bad reviews. Bad reviews lead to a bad image of the business which ultimately leads to fewer people buying your products.
Solution: Ensuring Quality At All Steps Of Production
There is no easy solution to this but to ensure quality in all steps of production. The reason that a customer is buying it is because they want the quality with the personalization. A bad quality product will mean it will be returned, making your business suffer.
Ensure product quality at every stage of production. When a customer sends you a custom design, you must ensure it can be replicated. If necessary, make adjustments, and before making any changes, inform the customer promptly.
They might not like the changes but will appreciate you contacting them. And they could also add their comments about the design changes. A collaborative approach like this will make the product feel more personal to the customer. This builds trust and the customer will more likely be satisfied with the result.
Problem #6 Delivery Time For Personalized Products Production
With e-commerce, customers do not get the products in their hands immediately. There are wait times for such products. With customized products, the wait time is even longer and customers want their products as quickly as possible. There are ecommerce like Amazon that can provide same-day delivery. That is difficult for SMBs to be able to attain.
Customized products require more time to make which increases its delivery time. Therefore, customers might be hesitant to complete the purchase leading to cart abandonment.
Solution: Customers Are Happy To Wait For Customized Products
The good news, about 48% of people are willing to wait a longer time to receive the customized product according to Kickflip. Custom products need more time and care to be produced. Customers empathize with the business and are willing to wait an extra few days to get the delivery.
As a business, you have to make sure that the product matches the quality that they are willing to wait for. The wait will satisfy the customer even more once they see that the product is of high quality and exactly how they wanted it to be.
Problem #7 Return Policies For Customized Products
Almost 30% of products bought online get returned according to Invsep. This shows customers are not satisfied with what they bought and want an exchange or refund for the product. Most online stores can return the product by offering a replacement. However, personalized products are difficult to exchange. They have to be remade to replace and the business suffers losses because they cannot resell what was customized.
Solution: Offering Custom Product Replacement
The good news is that Kickflip says that customized products are 40% less likely to be returned. While that does not mean there won’t be returns, having returns might not be negative for your business.
A study by Esenduran, Letizia, and Ovchinnikov found that businesses should return personalized products instead of offering back standard products. This creates a bond between the customers and businesses. Customers gain confidence in the business that they will not be cheated by the product that they want.
The study goes on further to how these will be the customers who will become repeat customers in the future. They are more likely to pay premium prices for customized products instead of standard products which results in higher profits for your business.
Above all else, you should make return policies for personalized goods as transparent as possible. This gives customers confidence in buying your products. With a transparent and hassle-free return policy, you gain more loyal customers. These loyal customers are more likely to recommend your products to others and be repeat customers in the future. Read this to know about effective ways of making customers loyal.
Is Product Customization Right For Your Business?
The product customization market is booming. More and more companies around the world are adopting such practices. More than 50% of customers express interest in customizing products according to Deloitte’s 2015 study. That statistic might be from 2015 but it is more relevant now than ever.
Without product customization options, a business is likely to see reduced CAGR growth per year. The McKinsey study on personalization saw that product personalization can generate 40% more revenue than a company that does not. Both the Deloitte and McKinsey case studies show that product personalization is the future for ecommerce businesses.
However, the difficulties of product customization business mean it is not possible for all businesses. So, is product customization right for your business?
Here are some tips that you can use to introduce product personalization for your business:
Start with who wants the customization. Conduct surveys and ask your customers will they be interested in having custom products made for them. These surveys will help you understand what type of personalization your customers want in your product. That way you can segment your customers to those who want customization. Additionally, you can follow market trends to see what type of customization you can offer to your customers.
Focus on smaller customization. Instead of a complete change in business operations, start with small customization options for your customers. It can be as small as just changing the color for certain parts of your product or giving design templates for customers to choose from. It adds to the customer experience and helps them personalize your products without affecting the production process for your business.
Have a product personalizer that is user-friendly. If your customers do not understand how to use the product personalizer, then they will simply not use it. Make sure that they can customize your product as quickly as possible with a user-friendly interface. Key features such as dynamic price changes, rule-based customization, and custom size options are what you are looking for in a product personalizer.
As a business, your priority should be the customers. If they are happy with the product, your sales increase. It is a win-win situation for everyone.
Bottom Line
Product customization is a strategy that companies can take into account because more customers want customized products. E-commerce has to start providing such services or risk losing customers. However, there are many difficulties in the product customization business. From the product personalizer your company is using to ensuring the quality of the product. All steps in the production process will run into problems.
Luckily, the major issues have easy solutions I highlighted above that you can use to help your product customization business prosper. Just remember that you are catering to the customer and you want to get the best quality product. If they are happy, your business will thrive.
