4. Customization in Luxury

By Viktoria Heuer

In today’s world, where the flow of information never stops, everyone is exposed to news at all times and anybody can compare him- or herself on a constant basis, customers call for opportunities to be individual. These include all kinds of customers, whether they purchase products in the mass market, the premium market and or in the luxury segment (Cox and Alm, 1998). In the end, everyone wants to be recognized as an individual and customize their home, travels or wardrobe. Even celebrities, who clearly set themselves apart from the mass have an urge to show their individual characters and do so by individualizing their appearance or the products they wear or embody.

It is worthwhile to have a look into the topic of customization within the luxury market and assess the potential trend with regard to personalization of products as well as experiences. Customization is a big buzz word in the marketing sphere and also not a new one. It is an important aspect of the modern fashion world, because brands in luxury continue to establish new opportunities to create an even more personal shopping experience. Examples within the biggest fields of luxury show what kind of customizations already fulfil the need customers are calling for. For example, a lot of practical implementations can already be observed within the fashion industry. Many brands offer customization by engraving initials on leather goods or accessories, such as Burberry who offered the visitors of the brand’s fashion show to order items with an engraved name plate. Also Bottega Veneta and Louis Vuitton have long offered to imprint initials on leather goods, and the latter brand took it to another level by offering rollout of Haute Maroquinerie, a joint design process in which clients work with in-house experts to decide on their individual handbag style, its color and leather.

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“The challenge for any business seeking to deliver a luxury experience is to be knowledgeable enough to go beyond the standard” (Brant, 2016, p.1)

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Despite these existing approaches, the luxury industry does not yet engage with customization on a broad level (Okonkwo, 2007). Yet, due to many other different emerging trends, such as technological advancements in the organizational systems within companies as well as digital advancements on the customer front, the trend of individualization will most likely be there for another while and is still to live up to the full potential of its name. This inherent potential of customized products and experiences can be imagined by taking a look to the future. In a world, in which the dream of “one-to-one” marketing will eventually become true, communication cannot only go into one direction. “Never before have customers expected to interact so deeply with companies, and each other, to shape the products and services they use” (Rust, Moorman and Bhalla, 2010). Customers must be given a voice and be able to realize their imagination with companies. Customers are the strongest force in the luxury market und their opinion must be taken into consideration, they “seek customization as an outlet to their fashion creativity” (Okonkwo, 2007). Their tastes and preferences differ and consumers are willing to portray these differences. Increased “product differentiation has the potential to drive higher customer satisfaction with the promise of a product that’s exactly what the customer wants” (Business of Fashion, 2011). Ultimately, luxury customers think along and expect the opportunity to contribute their ideas.

“The challenge for any business seeking to deliver a luxury experience is to be knowledgeable enough to go beyond the standard” (Brant, 2016). Brands need to be involved and listen to their customers in order to be able to outreach set standards. Customization does not only relate to individualizing products but also to the ability to customize service and communication. Modern CRM systems enable a targeted approach to consumers and an individual adapted marketing of products. Also, after- sales-services would ideally mean, that the brand knows what it can do for a consumer, before he or she articulated a concern. With regards to the travel and restaurant industry, in the past, it was only granted the well-known to be individually treated before the arriving at a hotel for the first time, whereas today technology enables restaurants and hotels to know about their guests before their first visit. “Catering to the individual is what defines luxury” (Brant, 2016), catering the individual is the “critical competitive differentiator” in the luxury sector.

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The trend of customizing products and experiences offers a nurturing platform for other trends.

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Further, the trend of customizing products and experiences offers a nurturing platform for other trends: The ability to customize products online will build touchpoints to e-commerce channels and help to encourage the digitalization of brands. Technological advancements play an inherent role in the customization of products. The production of our century has evolved from a “Henry Ford era to a [global marketplace] which utilized advanced technology in several facets of commerce, especially in streamlining products and services according to individual tastes” (Okonkwo, 2007). The opportunities of complex CRM programs or algorithms should not be underestimated, they allow for digitally record customers’ wishes and respond to individual inquiries. Further, also web experiences can be customized, by recognizing the page visitor leather goods could already be portrayed with initials when a potential consumer is just browsing the product catalogue. The collection of consumer data allows for unique addressing of customers tied to their preferences and past purchases.

Closer engagement with the brand will further support the ongoing “emotionalization” of products. For example, in the watch and jewelery category, it is not sufficient anymore to buy a piece and keep it for eternity, but to be able to leave a mark and perpetuate oneself. The chance to make products more tangible, accessible and ultimately easier to “experience” is a reason why each brand should analyze its customization potential and get on board with the trend, before others do (Cox and Alm, 1998). The first reason being that taking the chance to make luxury “experienceable” is at the same time also a chance to define the path of luxury goods in the future. The brand that can best support “a large degree of individualism in its products will prove the winner in the high-end luxury segment” (The Future of Luxury, 2013). Individualization is one of the main trends that will differentiate luxury brands from the mass market in the ongoing democratization of luxury. “To build brands that mean something to customers, you need to attach them to products that mean something to customers” (Christensen, Cook and Hally, 2005) Second, customisation plays more than well into the core competency of luxury firms. Whom else should consumers trust to produce unique pieces on the highest possible level than traditional manufacturers? Luxury specializes at triggering a deliberate and conscious decision compared to only portraying a choice among many different given options.

Luxury brands need to individually determine their respective chances and risks for their brands before deciding on how they can approach the customization of their offered products and services. Advantages of customization lie in co-operating with the customer, to set luxury apart from fast fashion and underline the spirit of innovation. Customizations allows to play into the increasing “emotionalization” of products and services which integrate customer’s wishes and lock them into the brand. Luxury products gain relevance on a complete different level. From a business perspective customization offers new ways of financing as consumers pay for their individualized products before they are produced according to specifications, which limits the need for luxury brands to forecast their products’ demand and build up inventory. The ultimate goal is to evolve from a marketing mind-set that is driving transactions to a mind-set focusing on maximizing customer lifetime value. Products and brands should pay into long-term customer relationships (Rust, Moorman and Bhalla, 2010).

Customization also brings along certain risks, for example that by catering customers’ needs the sublimity of a luxury brand diminishes and the desired “dictations” of trends by fashion tsars and legends such as Karl Lagerfeld lose their charm. Good taste and 100% stylistic competence might get lost as well. With regard to services it needs to be made sure that privacy is kept in line with when trying to cater customers on an individual level. Last but not least, customization requires an increased level of complexity.

The excursus on customization has shown, which possibilities already do exist and which ones could potentially be developed in the future. Each of them not only portray why luxury brands should further engage with individualization, but outline how the customization can take form and be leveraged for an increased performance of the brand. Luxury will become more and more individual, maybe even to an extent not yet imaginable.

Author


Viktoria Heuer

LinkedIn

 

Bibliography

Brant, Ana. “The Best Luxury Services Are Customized, Not Standardized.” Harvard Business Review 94, no. 2 (2016). https://hbr.org/2016/03/the-best-luxury-services-are-customized-not-standardized, accessed January 31st, 2017.

Business of Fashion. “Finding the Luxury in Mass Customisation.” 2011. https://www.businessoffashion.com/articles/fashion-tech/fashion-2-0-finding-the-luxury-in-mass-customisation, accessed January 31st, 2017.

Christensen, Clayton M., Cook, Scott, and Hally, Taddy. “Marketing Malpractice: The Cause and the Cure.” Harvard Business Review 83, no. 12 (2005). https://hbr.org/2005/12/marketing-malpractice-the-cause-and-the-cure, accessed January 31st, 2017.

Cox, W. M., and Alm, Richard. “The Right Stuff: America’s Move to Mass Customization.” 1998. http://www.dallasfed.org/assets/documents/fed/annual/1999/ar98.pdf, accessed January 31st, 2017.

Okonkwo, Uche. Luxury fashion branding: Trends, tactics, techniques. Basingstoke: Palgrave Macmillan, 2007.

Rust, Roland T., Moorman, Christine, and Bhalla, Gaurav. “Rethinking Marketing.” Harvard Business Review 88, no. 1 (2010). https://hbr.org/2010/01/rethinking-marketing, accessed January 31st, 2017.

The Future of Luxury. “Luxury 2020: 3 Trends Reshaping The Luxury Market.” 2013. http://www.thefutureofluxury.co.uk/luxury-2020-3-trends-reshaping-luxury-market/, accessed January 31st, 2017.

 

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