16 11, 2007

Personalization in Retail: How RFID tags are helping a German retailer to provide customization of the retail experience

By | 2018-06-14T12:56:47+00:00 November 16th, 2007|Cases-Consumer, Long Tail, MC Alternatives, Personalization, Technologies & Enablers|

Personalization in Retail at METRO (Source: baselinemag.com)Roland Piquepaille wrote in a ZD-Net Blog about RFID tags that help you to choose your clothes at a German retailer close to my home.

This application fits perfectly to the discussion we had at the MCPC 2007 Business Seminar a month ago in Montreal on „A total makeover of retail“. Here are some quotes from the posting:

„A German department store, the Galeria Kaufhof in Essen, part of the Metro retailing group, is using RFID technology in a new way. … Men buying clothes in this store will get automatic suggestions. For example, when you go to a dressing room to try a suit, a ’smart mirror’ will tell you what kind of shirt or tie you need to buy with it. Will this technology be deployed elsewhere? Time will tell.

… An RFID reader on a “smart mirror” in the change room determines which clothing has been brought into the room from the RFID tag attached to the apparel, then displays complementary clothing choices or accessories. The system is used in combination with ’smart shelves,’ which can read what merchandise is currently in stock, so that customers can be shown choices in sizes that are available, and in various styles and colors.

… RFID readers are installed in walls, tables, and clothing racks of the men’s department. In addition to providing METRO with data on store floor inventory in real-time, the readers enable a number of consumer-facing applications that METRO hopes will both wow customers and make their buying experience richer and more convenient. The RFID tables are hooked up to an accompanying flat screen, which displays what sizes and styles are immediately available on that table. The RFID mirrors detect which garment the customer is wearing or holding and offer recommendations for complementary items.”

And of course, all this information is extremely valuable to the retail chain. Let’s return to the Baseline article for its conclusion. “Bill Colleran, chief executive of Seattle-based Impinj, says the exciting thing about the Kaufhof deployment is that it demonstrates that RFID can be used in retail for much more than to wring out cost savings in the supply chain. With the use of business intelligence systems like smart mirrors and smart shelves, it can be a new sales driver. ‘People joke that this is the ideal place to start because men need more help” in making choices,’ he says.”

Context information:

– The full blog posting of Roland Piquepaille.
Report in Baseline Magazine which was the source of Roland’s article
Metro press announcement
Press release by the technology providers

10 11, 2007

MIT Technology Review on Ponoko: „Ponoko wants to give customers the tools to design and sell whatever they want.“

By | 2018-05-07T15:31:10+00:00 November 10th, 2007|Co-creation, Customization Trends, Fabbing, Long Tail, MC Alternatives, User Manufacturing|

How Ponoko works (Source: Ponoko.com)Last week, Michael Gibson published a very nice analysis on Ponoko in the MIT Technology Review. I wrote about this company before, and the article has a nice summary of the recent developments of this user manufacturing start up.

Gibson writes:

„For most companies, product design and development is a long process of trial and error, involving, among other things, in-house designers, committees, timed product releases, and, ultimately, customer feedback. Until a product sells, or if it doesn’t sell, it takes up costly shelf space in either stores or warehouses.

But by letting individuals dream up, make, and then sell unique products on demand, Ponoko is attempting to eliminate the product-development wing. Ultimately, it hopes to eliminate the need for a centralized manufacturing plant as well, by recruiting a large enough community of digital manufacturers–people scattered around the world who have 3-D printers, CNC routers, and laser cutters. Moving the site of production as close as possible to the point of purchase will reduce the need for long-distance shipping.

„Just as personal computing went from the mainframe to the desktop, and the result was distributed desktop computing, we see the same trend occurring with digital manufacturing, as it moves from the warehouse to the desktop,“ says Derek Elley, the chief strategy officer for Ponoko.“

At the end of the article, Gibson quotes Phillip Torrone, a senior editor at Make magazine, who tried Ponoko to create a custom stand for his iPhone:

„They did everything that was required for me to get my product,“ Torrone says. „Their tutorials are fine; the templates were good examples. Pretty much, they did everything right. Now the question is, is there a demand? How much money does a company like this need to make to stay afloat?“

Ellery’s answer is that, eventually, Ponoko’s revenue will come entirely from digital services, not from manufacturing fees. The company intends to develop six revenue streams, including ad sales and commissions on design purchases.“

For more analysis, head to the full article.

Ponoko and related services, and the corresponding business model, are the theme of my upcoming webinar with Pure Inisghts. More information here!

9 11, 2007

Webinar: The Next Gen of Mass Customization: User Manufacturing, Instant Companies, and Customer Co-Creation (Nov 29, 2007 on your desktop)

By | 2018-05-07T15:31:14+00:00 November 9th, 2007|Co-creation, Co-Design Process, Crowdsourcing, Design, Events, Fabbing, Long Tail, MC Alternatives, Open/User Innovation, Technologies & Enablers, User Manufacturing|

How a new infrastructure is enabling consumers to become instant manufacturers – and your future competitor — 10% discount for MC&OI Blog readers

Webinar on the future of mass customization

I am coming back to your desktop. After the large success of an earlier webinar on mass customization, London based Pure Inisghts is organizing a second webinar on the theme, this time around my new favorite topic of user manufacturing.

The topic: We are used to have a networked laser printer on every desk in our office and in every home, enabling us to print documents on the spot which a few decades ago demanded a specialized manufacturer. The same may be happening with the production of many other goods. Today new production technologies („fabbing“) and advanced design software allow average users to produce almost everything – on their own desk. Welcome to the factory in your kitchen.

This session will discuss the upcoming user manufacturing trend, a development that recently is taking shape in larger scope and scale: User manufacturing refers to a public available software, manufacturing, and distribution infrastructure that enables creative users and customers to design, build, and sell own creations to a larger public – without the traditional investments in setting up a business. User manufacturing supplements – or substitutes – mass customization strategies which many companies have implemented. It also may become the most efficient strategy to serve the long tail of variants in many industries.

Consider Spreadshirt, one of the world’s largest producers of graphic t-shirts. This company just allows everyone to create an own assortment of designs, and then sell this assortments in highly targeted retail outlets, online and offline, to a small market segment the user knows best. Thus, Spreadshirt does not have to predict the long tail of heterogeneity of fashion products, but just focuses on allowing users to create and sell this assortment by their own.

User manufacturing is enabled by three main technologies: (1) Easy-to-operate design software that allows users to transfer their ideas into a design. (2) Design repositories where users upload, search, and share designs with other users. This allows a community of loosely connected users to develop a large range of applications. (3) Easy-to-access flexible manufacturing technology. New rapid manufacturing technologies („fabbing“) finally deliver the dream of translating any 3-D data files into physical products — even in you living room. Combining this technology with recent web technologies can open a radical new way to provide custom products along the entire „long tail“ of demand.

User manufacturing builds on the notion that users are not just able to configure a good within the given solution space (mass customization), but also to develop such a solution space by their own and utilize it by producing custom products. As a result, customers are becoming not only co-designers, but also manufacturers, using an infrastructure provided by some specialized companies.

The webinar will discuss recent trends and case examples of the user manufacturing trend. We also will compare the business models of companies which are building on the user manufacturing trend and which implement and operate the underlying infrastructure ´for creative users to become manufacturers.

WebinarPlanned session outline:

– A short review of conventional mass customization thinking

– Which recent trends and developments enhance these strategies and how mass customization is related to “The Long Tail” phenomena

– What is user manufacturing, and which trends does this strategy support?

– What are the components of an infrastructure that supports user manufacturing?

– A review of business models of established companies and recent startups which already successfully benefit from the opportunities of user manufacturing

– A discussion of the major challenges and open issues in this domain

– Session wrap-up: Idea for further action

To register, please go to http://www.pure-insight.com/webinars/mass-customization-next-generation and use promotional code aix (case sensitive!) wenn registering for a 10% discount.

Note: You also can download the webinar after its initial live broadcast – but only when joining live, you can interact and ask direct questions.

All further information can be found here.

Context information

– If you prefer to see the content of this webinar in action, a seminar on Fabbing and User generated Manufacturing in Essen, Germany, provides a great opportunity on Nov 22.

– My earlier posts on user manufacturing

Article in CNN online on the fabbing trend

Article in New Scientist on the fabbing trend

Article in Make magazine on how to use a fabbing device

3 06, 2007

User Manufacturing and Crowdsourcing in New Zealand: How Ponoko enables creative users to create, manufacture, and sell digital products online

By | 2018-05-07T15:31:58+00:00 Juni 3rd, 2007|Co-creation, Crowdsourcing, Customization Trends, Fabbing, Guest Articles, Long Tail, MC Alternatives, Open/User Innovation, User Manufacturing|

How Ponoko worksPonoko is a user manufacturing platform based in Wellington, New Zealand, where anyone can click to make, buy and sell digital products. Users upload designs, Ponoko manufactures them for them using rapid manufacturing technology, and send the result to users. If they like and approve the result, users then can start to sell their designs (and products) to others using Ponoko’s online shop and distribution system. And as in many ventures, the initiator of the business was a frustrated user who could not buy what he wanted to fulfill his needs. After reading about the idea of personal fabrication by Neil Gershenfield at MIT, a business was born.

I asked Dave ten Have, Ponoko’s founder and CEO, to describe how the company was founded and what the team wants to achieve. With the help of Steven Kempton , Ponoko’s chief blogging officer, the following guest article came in:

Ponoko was founded on the idea that making or buying individualized products shouldn’t be so complex, time-consuming and at a high cost, both financially and environmentally. It should be an enjoyable experience, where you can focus on the design and not be overly limited to what resources, materials or tools you may or may not have or know about.

The idea for Ponoko came from software entrepreneurs Dave ten Have and Derek Elley, both of whom have made a number of things where each experience left a sour taste. A particularly disappointing project was Dave’s experience in designing some wall art – a skateboard shape made of dark rich wood with mother of pearl inset designs. This small project took way too much time than Dave had anticipated – two years in fact. It took an incredible amount of phone calls and emails to multiple parties (mostly engineers who didn’t have an interest in creativity/art). In the end, it cost a huge amount for an unpleasant making / buying experience – and when it turned up, it was wrong and had to be sent back. The worst part was having to go through the horrid process all over again. (You can see Dave’s personal blog for pictures). After this and other disappointing experiences in making individualized projects, they founded Ponoko.

Encouraged by the rise of the Internet connected ‚creative-class‘ along with smarter, faster, smaller and cheaper digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), Dave and Derek formed a plan to solve these problems. They started with the premise that the personal computing and the personal manufacturing industries have strong parallels, realizing that one day everyone will be able to create and make any product from their own home. This led to the idea of mass-individualized products created by the Web community and made on a globally distributed network of manufacturing hardware controlled from any PC.

Today’s product making and distribution model is financially and environmentally unsustainable. It’s also under pressure to digitize like the music and video industries have. Because today’s 100-year old product making and distribution system is so ingrained into our every day lives and delivers so much benefit, problems are not so obvious. But when was the last time you made something?

Making products today does not come easy – some major problems exist:

* Making and delivering (individualized) products is a time consuming, complex and expensive process. This pain does not fit well in a world that is increasingly in demand for instant satisfaction from mass personalized and customized products at low cost.

* Product making and distribution is cost prohibitive for new entrants without relatively deep financial reserves. This is stifling mass creativity of real products and the progress of humanity on unimaginable fronts.

* Low cost mass production and global distribution relies upon using lots of cheap energy and labor. But these two resources are running out.

* Product making and distribution is a major contributor to the global warming problem (according to the WRI, perhaps 20% of the problem). Being environmentally unsustainable, the increasing ‚carbon currency‘ costs also make the current model financially unsustainable.

* Finding individualized products is very difficult and buying such products is a time consuming, relatively complex and expensive burden. Why is there no easy to find supplier of low cost personalized products?

These pressing problems illustrate that a new product making and distribution process is required. Our solution is made possible given the rise of the Internet connected ‚creative class‘ along with digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), and production materials.

The idea of Ponoko is to address these challenges and to deliver the future of product making and distribution to the mass market, today. Ponoko shall deliver the following benefits:

Less risk. On-demand design and manufacture is made possible, so work does not need to be commenced until a consumer makes a purchase. And because product designs can be sold to a large global audience from day one, pay back periods can be shortened.

Lower costs. With Ponoko, creators can now ship digital product designs with the click of a mouse, not physical products requiring a pocket full of cash. This is Apple iTunes for products, but with YouTube style user-generated content.

Instant scalability without cost. Ponoko’s distributed manufacturing model means the creator’s cost and time frame to manufacture a product for 1 customer is the same as for 1 million customers. Creators can sell millions of products on-demand at ’no‘ extra cost.

Increased control. Ponoko is specifically designed to provide end-to-end visibility & control over the entire product making and distribution process.

Less complexity. By connecting creators direct with consumers, the traditional supply chain complexity involving a manufacturer, distributor, wholesaler and retailer is eliminated.

But also for consumers, the system has a number of benefits. The main advantage are low cost individualized products. Because no physical product exists until purchase, product design collaboration makes it possible for everyone to co-create and personalize ‚almost anything‘ they need & want. As adoption increases, prices for Ponoko’s design-to-order and made-to-order commodity type products will become unrecognizably low.

We are in beta phase at the moment, so if you’re interested to find out how this all works and to help us make it the best making/buying experience you’ve had, please sign up.


Ponoko Blog
– Previous posts on the user manufacturing trend
Neil Gershenfield on personal fabrication

4 05, 2007

CNN on User Manufacturing and Fabbing Your Products at Home

By | 2018-05-07T15:32:10+00:00 Mai 4th, 2007|Customization Trends, Fabbing, MC Alternatives, MC/OI on the Web, Open/User Innovation, Technologies & Enablers, User Manufacturing|

Fab at home printerDean Irvine from CNN Online reports in a recent article on a new project, Fab@Home, that wants to provide a machine that can make anything, even itself — and this in the comfort of your home. What sounds like the dream of a science fiction author is a device developed at Cornell University by Hod Lipson, Assistant Professor at Cornell’s Computing and Information Science department, and Evan Malone, a PhD student.

Lipson and Malone’s machine is different to conventional rapid manufacturing technologies in several reasons: First, it can use a number of materials, from plastics to metals with a low melting point. „This makes them useful for making parts or components, but not for making complete systems. We’re aiming to make integrated systems, including circuitry and sensors,“ Lipson is quoted in the article.

Second, the machine is not a proprietary technology, but open source machinery.

DIY fabbers have been able to download plans on how to make their own Fab@Home devices from the web site and are able to build it using off-the-shelf components for around $2000, or buy a kit for $3,000. The machines can then be run from software on a desktop computer. Unsurprisingly the current model is more rudimentary than professional rapid prototyping machines.

Lipson: „Since the machine has been out there people have been experimenting with all sorts of materials including food. We’ve seen a lot of chocolate, cheese and peanut butter-based creations. This might not be the way the machine is used in the future, but it just goes to show how adaptable and open the creative impetus it is.“

Lipson thinks that digital fabrication is currently in a similar situation to that of computers in the 1960s, but instead of kits in the hands of enthusiasts and boffins, the fabbing machines can be developed by creatives across the world thanks to the Internet, freeware and open source software.

„It’s a project that will be perfected and improved thanks to the online community of designers and creatives. Getting it into the hands of the people is very important. All the software and components are open source so can be changed or modified according to what people want,“ he said.

While the machine still is in its early stages of development, the article comments on the potential impact of such a machine. This discussion fits into the vision of user manufacturing. In some quotes in the article, I am saying (please excuse this shameless act of self-promotion):

Piller: „It’s hard to say if

[Fab@home] will be in everyone’s home in the next 20 years. It might follow the same trajectory as the laser printer. Who predicted that nearly every home would have one of them 20 years ago? What is certain is that in the long run it’s sure to transform the manufacturing process, big companies won’t have to focus so much on economies of scale. … [For consumers], you won’t have to wait for products. It will be similar to being your own publisher online, but with an enormous scope of what you can produce.“

And how about replicating some Prada shoes or Aquascutum cuff links, Irvin asks in his article. Well, just look on Google Sketch-up and its repository of 3D designs. you will find an amazing number of reverse engineered IKEA furniture here.

„Already people are customizing designs of existing products, like Ikea furniture, using designs tools and these types of machines. It’s small scale now, but if this becomes big, then Ikea are going to step in and say:’Hey, you can’t customize our designs.‘ [But] if they’re smart then they’ll put these machines in their stores,“ said Piller.

And the basic idea of the IKEA business model of self assembly would become one of self-design (modification) and self production.

Read the full article here: http://edition.cnn.com/2007/TECH/science/04/26/fs.fabmachine/

Context: – The CNN article refers to a fabbed ladies shoe that is wrongly credited to my group. I wrote about the first laser sintered shoe in this blog, but its inventors and designers are Marc van der Zande from TNO Science and Industry and Sjors Bergmans from Concept Design who developed the shoe in a joint EU-funded project called CEC-made shoes.
– Another nice article about the project.

Read More
28 02, 2007

Nike is Trying Threadless‘ Crowdsourcing Model

By | 2018-05-07T15:32:29+00:00 Februar 28th, 2007|Co-creation, Crowdsourcing, Customization Trends, Footwear, MC Alternatives, Open/User Innovation, Sneaker|

More Co-Creation at Nike

NikesneakerplayCoolhunting has an interesting small report on an upcoming NikeID project: They are offering their top-end (fashion) shoe, Nike Air Force 1, in a special co-design version. Starting 6 March 2007, users can design a custom Nike Air Force 1 using the NikeID configurator (how it works in detail). Designs are exhibited on the web, other users vote on the winning designs, and the winning design will then be specially made only for the winner, complete with bling sneaker jewelry.

For this project, Nike is collaborating with Sneakerplay, a social networking site of sneaker enthusiasts (only Sneakerplay members can particpate). While this sounds a bit like Threadless‘ collective customer commitment (crowdsourcing) model, it is different:

Nike takes the community, co-creation, and community evaluation idea, adds an easy-to-use toolkit to enable easier co-design (at Threadless, you have to know Photoshop), but then produces the winning design in a custom manufacturing step just for the winner.

[UPDATE: Just after I wrote this post, Bill commented on this post, saying that this is a good old design contest and not a new crowdsourcing model. And I agree! ]

Why not for everyone? Don’t ask me … it seems to be more like a clever PR pilot then a new business model. But at least it is a start and great idea to live their new „The consumer decides“ philosophy with a different twist.

28 02, 2007

Pill Boxes 2.0: Vuru personalizes nutrition packaging

By | 2018-05-07T15:32:31+00:00 Februar 28th, 2007|Cases-Consumer, General, MC Alternatives, Service Customization|

VuruSometimes it’s all about the (re)packaging. As Springwise, a new Miami-based company called VURU sells nutritional supplements in personalized daily packs. Vuru is the brainchild of Grant Kornman, who says that his (heavy pill using) father inspired him to open this service, as Grant was fed up with selecting pills from many bottles to assemble the daily intake.

At Vuru, customers choose from over 2,000 name brand supplements and vitamins, select how many weeks worth they want to purchase and then have their personalized packs shipped to them. Each pack contains the daily dose into a slick little pack that fits 2-15 pills.

The idea: To spare customers the hassle of collecting pills from several bulky bottles into daily dosages. Vuru packs can be tossed into a handbag or pocket, and are perfect for travel. Each order comes with an information sheet, which has a picture of each pill, the supplement facts label, directions, warnings and any other information pertinent to that supplement or vitamin.

This is how the process works:

1 Name your pack: customers are asked to enter a name they would like to appear on their pack. This is an old personalization trick, that always works: Give something your own name, and you build commitment and involvement with this (standard) thing.

2 Fill your pack: From a long, long list, users now have to select their individual pills. In case you know exactly what you want, this is easy. In case you don’t the site lacks a really important feature here: recommendation and advise. How should I know which nutrition supplement is best for me, what is the difference between the 15 kinds of vitamin C they offer, etc.

However: Besides creating their own unique blends, customers can pick one of Vuru’s pre-selected mixes, varying from ‚Woman’s Yoga Pack‘ to ‚The UrbanDaddy Pack‘.

3 Choose the nubmer of packs to pick how many weeks supply you want and if you would like auto refills.

4 Checkout. Leave your credit card and money. Prices totally depend on the pills you choose.

Springwise comments on this idea:

„Several elements make this concept quite appealing. First of all, customers will love the ability to pick and mix their own, ultra-personalized blend from a wide variety of supplements. Secondly, there’s the convenience angle: time-saving and life-hacking, Vuru is what our sister-site trendwatching.com would call a daily lubricant. One of those products that make people’s lives just a little bit easier. Last but not least, the packaging is simple, shiny and chic. Which all combines to create a luxury ‚health hack‘ that many consumers are willing to pay a premium for. The same concept could no doubt be applied to other industries. How about skin care products? Just be sure to think green and keep packaging to a minimum.“

My comment: Nice idea and a good example how you can offer customization with standard products. This is just a nice packaging service, but one that may create customer value for heavy users of these products.

But: Sovital and other companies already go one important step further: They really customize the pill! and just produce a customized batch of nutritions just for you So that there is no need to take several pills (even if they come out of one nice bag) but just one that contains all the stuff your body needs.

26 02, 2007

The Consumer Decides: Nike Focuses Competitive Strategy on Customization and Creating Personal Consumer Experiences — Data about the Nike Plus Personalization System

By | 2018-05-07T15:32:34+00:00 Februar 26th, 2007|Cases-Consumer, Customization Trends, Footwear, MC Alternatives, Personalization, Sneaker|

NiketitelDuring its recent Investor Days, the Nike top management board announced a strong shift of its strategy from being a sportswear brand to becoming the enabler of customized, personal experiences. “Investor Days” are an extensive briefing for analysts; taking place only about every two years (the last was in June 2005). During its recent briefing at the company’s headquarters in Portland on Feb 6, 2007, the company placed a strong focus on its new global theme “The Consumer Decides” and revealed some interesting facts about its customization ambitions and ways to sustainable consumer experience.

During the meeting, also a number of interesting performance data of the Nike Plus system were provided, the Apple-Nike cooperation that allows runners to customize their running experience in a simple but very clever way. It is a strong contrast to the exploding variety Nike is facing today, offering more than 13,000 product different styles in every single quarter.

First, Nike CEO Mark Parker explained the theme “The Consumer Decides”:

“The Consumer Decides is one of Nike’s 11 maxims that really define who we are and how we compete as a company. Today, consumers have never held as much power as they do today. They have more choices and more access to those choices. They connect and collaborate with each other over the world. … Clearly, the power has shifted to consumers. For every Nike employee, there’s ten million consumers out there deciding whether or not the products and brands we offer really matter. … The ability we have to connect with consumers is the single most important competitive advantage in business today, and nobody does that better than Nike. There is no substitute for connecting with consumers, but it’s really just the beginning.”

Nike’s Brand President, Charlie Denson, focused in his speech on the changing consumer and the particular demand for customization:

[Consumers] want to be part of a community, whether it’s a digital community or a virtual community, or whether it’s a physical community. They want to feel like they’re a part of something. They want to be engaged. …

And another thing that is very, very important to us as we look to the future is the value that the consumer is placing on customization. It’s a very, very important part of the way that they interact with anybody or with brands today. We used to talk about the consumer in what we thought was specific, but in today in retrospect, feels like generalities, the fact that we used to put a 18 and a 22-year old in a same set of psychographic, demographic targets. Today, I can very comfortably say that the 18 and the 22-year olds are working on different — they’re living on different planets or at different places. As Mark said, these consumers have more choices than they’ve ever had.

What our challenge is to keep it simple, make those choices as simple as we can, and make them personal. We’ve spent the last, or in our case, 20 or 30 years trying to bundle things, adding value to a purchase or a relationship. And now, it’s almost in reverse, because you have to unbundle everything if it’s going to become customizable.

During the event, the Nike Plus system was described as a perfect example of this strategy. Trevor Edwards, VP Global Brand & Category Management, describes the system and gives some numbers on its acceptance:

Nike2nikeplusNike Plus „combines the physical world with the digital world. We put a sensor in the shoe that speaks to the iPod, and you can hear how far you went, how long you went and how many calories you’ve burned, pretty simple thoughts. And then, when you dock it, you have a world of information at your fingertips. You get to see all that you’ve done, all your runs stored in a very simple, intuitive web experience where you can set goals for yourself. You can see how you’ve progressed. In fact, this week, I think we’ve put up — you can actually map your run anywhere you go. In addition, you can join in the Nike Plus community where you can challenge your friends or other community members to run physically, but compete virtually. And since our launch, we have close to 200,000 members.

What do the numbers tell us today? First important fact, 35% of the members that we surveyed are actually new to using Nike footwear. So, we’ve brought more consumers into our franchise. The second part is, more than half of them are actually using the survey to service four times a week. And this is probably the most important statistic, 93% said they would recommend it to a friend, 93%. This is an incredibly sticky proposition, a great way to build loyalty for our brand and obviously build the business.”

Charlie Denson describes the growth plans Nike has with the system:

“That is a dedicated consumer experience. It is changing the game, and it’s creating that competitive advantage for us. We would like to see 15% of all runners using Nike Plus, 15%. Now, that’s not a very big number, except for there’s 100 million people who call themselves runners worldwide. ….”

So in summary, this sounds like a big success and stresses that this really has been a clever idea to provide customization in this industry in a rather simple way, but in one that matters for consumers. And with the target of 15 million users, this would be one of the largest mass customization programs ever.

In another section of the event, Don Blair, Nike’s CFO, provided some interesting figures on the scope of variety that Nike is facing today. I often mention in my presentations the explosion of SKUs and variants that global brands today think to have to offer to create appealing products in heterogeneous markets. Nike seems to have recognized that just increasing the number of variants is not the ultimate way to appeal to consumers:

SKU productivity. One of the great strengths of our company is our ability to create compelling innovative products that excite consumers. But there can be too much of a good thing. Each quarter we sell about 13,000 different styles of footwear and apparel and because of our high rate of seasonal turnover, we sell tens of thousands of different styles every year. And there are many additional styles that make it part way through the process, but don’t end up in the final line that goes to market.

Each one of these tens of thousands of styles drives costs; costs for design, development, sampling, transportation, storage and sales. For footwear 95% of our revenue comes from about 35% of our styles and for apparel the figure is about 40%. …”

Costs of samples to provide this variety were given with more than $100 million. Given these numbers, an adaptable product like Nike Plus or a truly mass customized product, produced on-demand, sounds very appealing and much more efficient.

For the full transcript of the investors meeting, go to nike.com.

23 02, 2007

Automotive Customization 2.0: The MIT City Car project

By | 2018-05-07T15:32:38+00:00 Februar 23rd, 2007|Cases-Consumer, Customization Trends, Design, MC Alternatives, MCPC 2007, Personalization|

The MIT city Car - Personalization in the auto industryThe MIT City Car project was one of the initiators to host the upcoming MCPC 2007 World Conference on Mass Customization & Personalization at MIT. Coordinated by the MIT Media Lab, this project looks into the future of the car. And this future is much more than faster engines, a futuristic shell or more entertainment features in the car, but it is all about delivering a highly personalized mobility solution.

The main idea: The future of the car is a shopping cart. Well, a very special shopping cart. Sponsored by General Motors Corp., a team lead by MCPC 2007 conference chair William Mitchell and MCPC 2007 coordinator Ryan Chin, is building a prototype of a lightweight electric vehicle that can be cheaply mass-produced, rented by commuters under a shared-use business model, and folded and stacked like grocery carts at subway stations or other central sites.

The Boston Globe recently published a nice update about this project, and also has a great interactive graphic on its site that explains the concept. “Dreamers have been reinventing the wheel since the days of cave dwellers. But the work underway in „the Cube,“ the Media Lab’s basement studio, may be the most ambitious remake yet.”, Globe writer Robert Weisman reports in this article.

The main idea to totally redesign the car was to move everything what today drives and controls the car into the wheels. Embedded in each of its four wheels will be an electric motor, steering and braking mechanisms, suspension, and digital controls, all integrated into sealed units that can be snapped on and off. With this design, the rest of the car can be designed totally new from the sketch. By removing as much hardware from the car as possible, a totally new design is possible.

Citycyr2The main visible feature is the car’s stackability. The idea is that you do not own a car, but just take one within a city when you need it – a modern interpretation of the (perfect) Boston based car sharing service ZIP car or Germany’s “Call-a-bike” system. As space is often a constrain in the city, cars will be foldable away to occupy as little space as possible when not in use. It is much easier to see than to explain how this will work, so have a look at this interactive graphic.

But the MIT team still recognized that cars often are an object of personal impression and more than just a seat in a public transportation system. This is where personalization comes into this system. . „We think of the car as a big mobile computer with wheels on it,“ Ryan is quoted in the Globe article. „This car should have a lot of computational power. It should know where the potholes are.“ And it also knows how you like your car. Once you have rented a car, the software that sets passenger preferences, changes the color of the cabin, controls the dashboard look and feel, and even directs drivers to their popular parking spaces next to their destination.

As the MIT researchers envision it, the City Car won’t replace private cars or mass transit systems but ease congestion by enabling shared transportation in cities. Commuters could use them for one-way rentals, swiping their credit cards to grab a City Car from the front of a stack at a central point such as a school, day-care center, or office building. „What you’ll be buying is mobility,“ Chin said.

„The existing infrastructures can’t support the population growth that we’re seeing, so we’re going to have to find viable alternative vehicles like the one MIT is designing,“ Rebecca Lindland, director of automotive research at Global Insight in Lexington, is quoted in the Boston Globe article.

The MIT City Car concept transfers a piece of hardware into a product-service-system that delivers a truly customized service as a bundle of products and service components, some mass produced, some adaptable, some customized for each user. The first real working prototype of this car is scheduled for presentation on the MCPC 2007 conference. „I think we’ll be driving it around the interior of our building,“ Chin said, „and hopefully ask the MIT police to let us drive it around a parking lot.“

In a dedicated track on this conference, we invite researchers and managers to discuss this concept and present their own visions of the custom car of the future. (http://www.mcpc2007.com). In general, the idea of product-service-systems is a promising option for many customization offerings in several industries:

– Why not add a custom training plan to your custom sports shoe? (a great example for this is the Nike Plus Personalization program)
– Customization of cell phones may not only include a custom cover or your personal ring tone, but a service that configures your phone to your profiles, adds your phone books – and comes with your personal service plan that adjusts the pricing structure to your personal need.

5 12, 2006

User Manufacturing: Amazon’s Next Twist: Will the Online Retailer Become a Key Enabler of User Manufacturing?

By | 2018-05-07T15:33:02+00:00 Dezember 5th, 2006|Co-creation, Customization Trends, Fabbing, MC Alternatives, Open/User Innovation, User Manufacturing|

User manufacturing as an alternative model to mass customization – and how this can become the next big trend of user-driven value creation

The Credo of User ManufacturingUser manufacturing is an alternative (or supplemental) idea to mass customization, building on the notion that (some!) users are able not only to configure a good within the given solution space of a manufacturer, but also (at least partly) to develop such a solution space by their own. And then transfer their individual creations in a product.

Consider a PC: Most of us are now used to the idea to mass-customize a PC using an online configuration toolkit as, e.g., Dell offers it. Here you can just select what the manufacturer has already provided. Indeed, a main task of a configuration toolkit is to exactly ensure that a custom configuration meets the pre-developed manufacturing specs and design of the producer.

But there are also some more extreme users that really build their own, very custom PCs. They do not just configure what a manufacturer has done, but really craft very individual PCs (see the projects at pimprig.com to see what I mean). In this industry, the actual manufacturing is not too difficult, as PC architectures are modular and build to be interchangeable. But you still need some skills and dedications to do so.

Here now the idea of user manufacturing starts: I have included this within the last year or so frequently in my talks and lectures, but have not blogged too much about it yet. But this posting is the start of a series of articles to formulate this idea better:

User manufacturing (perhaps there is a better term?) is a business model were users (customers) are becoming not only co-designers, but also manufacturers, using an infrastructure provided by some specialized companies.

[Update] User manufacturing is enabled by two main technologies:

(1) Easy-to-operate design software that allows users to transfer their ideas into a design without much experience in how to operate a CAD software. eMachineshop’s software is a good example for this (see below). Eric von Hippel called this tools „toolkits for user innovation“: Think of mass customization configurators with a much broader solution space.

(2) Easy-to-access flexible manufacturing technology. New manufacturing technologies, first of all rapid manufacturing (e.g., laser sintering or 3D printing) enable users to transfer their ideas into concrete objects — even of they are no pure digital products. Laser printers made publishing possible for anyone (combined with DTP software to design the stuff). Similarly, future manufacturing technology will make the manufacturing of physical goods possible for everyone.

Well, perhaps not everyone but everyone interested and involved enough with the product to invest the time in the design and manufacturing. At the beginning, user manufacturers will show lead user characteristics, i.e. users that really are ahead of a trend with regard to an application and who really hope to benefit from getting a specific product design. With a continuous improvement of tools and manufaturers, however, user manufacturing will turn mainstream.

This also allows (expert) users to set up an instant company that designs, makes and globally sells physical products could become almost as easy as starting a blog or creating an eBay store — and the repercussions would really change the way we still think about manufacturing today.

In such a world, „user-generated content“ would not solely refer to media (blogs, citizen reporters, YouTube movies etc.) but to just about anything: user-generated jeans, user-generated sports cars, user-generated candy bars.

Some examples:

In the world of printed goods, user manufacturing is pretty much established: Companies like Lulu.com enable everyone to become their own publisher and provide publishing and fulfillment infrastructure that up to a few years was only of the hand of a few specialized, huge publishing houses.

eMachineshop.com is a great venture that provides full-scale manufacturing capacity to everyone. Over the internet, users can here access the entire infrastructure that before was only available for „real“ manufacturwrs, or demanded complicated and transaction-cost intensive search process for local job shops. But with a very flexible toolkit at eMaschineShop, users now can design their own components and place them on diverse manufacturing outlets.

A similar idea has Big Blue Saw. The company was founded by Simon Arthur, who, as a hobby and later job, build fighting robots for Battlebots, the Robot Fighting League and other robotic sporting events. Doing this, he thought about ways to make it easier for inventors, artists, and hobbyists to create anything using modern machining technology. Big Blue Saw is the result. Its customers can upload their designs to their website. We then make these designs come to life in metal and plastic through the use of advanced robotic machining technology like waterjet cutters.

These companies are doing something really new:
They provide technology that before demanded high investments and operating skills not to everyone. Well, everyone that really knows to design and assemble.

To increase the potential of user manufacturing, some other companies come in. They offer not only manufacturing, but also some supporting services. And actually provide a product, but not only components. Consider Crowdspirit. This company tries to provide everyone the capability to become the make of next ipod. Their focus is electronic manufacturing. Springwise recently reported about this idea :

User Manufacturing Picture by Springwise What blogs, citizen journalism and YouTube have done for media, CrowdSpirit hopes to do for product development. … How it works: Inventors submit ideas for innovative new products and contributors submit problems for inventors to work on. Members vote, define a product’s specifications, and can invest money to finance development. After a first prototype has been created, selected members test and help fine-tune in cooperation with manufacturers. Once the stage of product development has been completed, contributors continue to be involved, for example by acting as a product’s ambassador and promoting it to retailers, or by providing product support, like translating instruction manuals.

CrowdSpirit’s primary focal point is electronics with a market price below USD 190. If all goes well, this will be followed by more expensive electronics, and other sectors as the concept develops. A selection of inventions will be launched in parallel, so that the community can work on several projects at the same time.

And now Amazon:

In an interesting article (thanks to MIT colleague Ethan Mollik for this link!), USA Today technology reporter Kevin Maney places the known activities of Amazon to let others use their infrastructure in the new light of user manufacturing:

Kevin Maney from USA Today„Point, click, make a product to sell to the world … That’s the future Amazon.com CEO Jeff Bezos hopes to set in motion with the company’s new direction. If you tease out Bezos‘ plan, you get to a point where a high school cheerleader sitting at home with a laptop could theoretically harness computing power, design capabilities, manufacturing and distribution from around the world, and make and market a cute little pink hot rod that would compete against General Motors.

… You can rent space on Amazon’s computers to run a business, or rent out its transaction capabilities to sell things and collect money, or rent pieces of its warehouses and distribution system to store and ship items — or all of the above. So, with almost no start-up costs, anyone anywhere could become a retailer. It’s not just contracting with Amazon to sell your stuff, the way Target does. It’s leasing pieces of Amazon to create something totally unrelated to Amazon. …

What’s new about Amazon is the leap to physical products. This might be one of those evolutionary milestones, like when the first fish crawled up on land, or Jimi Hendrix discovered feedback on his electric guitar and altered the path of rock music.

Amazon’s platform will be the first to include physical distribution. „You could notify us to expect inventory from you, tell us when to pick it (from warehouse shelves), and we’ll send it to any address,“ Bezos says. „We’ve spent 12 years getting good at these things, so why should somebody else have to start from scratch?“

Bezos‘ idea cracks open an intriguing can of worms. Why shouldn’t an established manufacturer do the same, leasing out factory space and industrial design teams and its expertise the same way? Sure, there are limitations. Factories aren’t as flexible as warehouses or data centers, which can handle business from just about any industry. So a manufacturer’s markets would be narrower. …

Maybe this trend would not be such bad news for GM. It has excess capacity and nearly 100 years of manufacturing expertise. If it created a carmaking platform, GM could enable the creation of dozens of new niche-market car companies, all using GM to make and distribute their designs.“

As Kevin Maney observes, this model is not far afield from today’s contract manufacturers in Asia, which make batches of cellphones or toys or shoes on demand for Western brands. User manufacturing would transfer this model to everyone in much smaller batches, using rapid manufacturing technologies and easy, but flexible design tools.

Just imagine what would be possible if Amazon would add to its shared online-selling and distribution capabilities some physical manufacturing capacity as, e.g., offered by e-machineshop (they do this already in the context of book printing with print-on-demand). Then we all could design, click and manufacture a product to sell to the world. Welcome to the world of user manufacturing.

Context information:

– The Elite Vintners wine customization toolkit can be interoreted in this way: This is not a real configurator (as much too complex), but more the provision of the infrastructure of a professional vinery to everyone.

Spreadshirt, Cafepress and Zazzle enable user manufacturing within a bit more constrained solution space in the fashion industry. They allow much more than the usual t-shirt configurations.

Tim O’Reilly characterized recently Threadless as a model of user manufacturing, but I disagree. This is crowdsourcing of design, but otherwise a more traditional (if revolutionary) business model. But Tim has a number or other good examples in his post.

– The review of the history of mass customization by Donal Reddingtion also makes this bridge from mass customization to more active users.

– And researchers of user innovation like Eric von Hippel have always noted that innovative (lead) users, who find no manufacturer that would produce their idea, turn themselves into manufacturers. Lead users, however, had to build their own manufacturing capabilities. Here is a great study by Eric with Christoph Hienerth and Clariss Baldwin about this area.

Books: Neil A. Gershenfeld: FAB: The Coming Revolution on Your Desktop–From Personal Computers to Personal Fabrication. And in GERMAN: Andreas Neef: Vom Personal Computer zum Personal Fabricator, a book on fabbing, rapid manufacturing and new flexible manufacturing technologies.


– If you live in Singapore, joint this workshop exactly to the topic on Feb. 27, 2007: http://genometri.com/DIY/

– Paul Krush reports his story of opening a user manufacturing service bureau in his new blg.

20 11, 2006

Today Is MC Day in the Blog Sphere: History, Future, and a Missed Trend

By | 2018-05-07T15:33:10+00:00 November 20th, 2006|Customization Trends, General, MC Alternatives, MC/OI on the Web|

Today was mass customization day in the blog sphere: Two great and one interesting post on mass customization and creative customers stroke out the mass of general postings just mentioning the term. And an update on Zafu in the NYT.

Tim O'ReillyTim O’Reilly on Threadless and custom fabrication. Tim O’Reilly, master guru of Web 2.0, today posted about Threadless and why he loves this business model. Why I do not share his evaluation that Threadless is a perfect example of the Long Tail (see my comment on his post), Tim makes a good observation where this will lead us in the future:

Right now, Threadless is just making t-shirts. But custom fabrication devices like laser-cutters, water-jets, and 3D printers are currently at about the price points of typesetting machines back when desktop publishing took off in the early 80’s. Even traditional manufacturing techniques can now be harnessed by small companies and individuals, who can hire overseas factories to make short runs of custom designs. How far off is a future in which the creative economy overflows the thin boundary that separates „information“ from „stuff“?

We’ve been fascinated with this idea since Marshall Burns and James Howison gave a talk entitled Napster Fabbing at our first P2P Conference in 2001. They pointed out, quite rightly, that in a world of personal fabrication machines, stuff could be shared as easily as music is shared today.

But what would the mechanisms be by which new designs first come into play? Will they merely be copied from traditional manufacturing and brands, or will there be a new economy in which users compete in creative abandon?

I am preparing a longer review posting on user manufacturing and the new infrastructure that is just coming up to help consumers to turn their creative ideas into physical outputs (and sell those to others) – an alternative model to the today dominating mass customization model. Stay tuned for this next week or so.

But Tim’s post is a summary of the idea and what will come up. Or, as he says with William Gibson’s words at the beginning of his post, „The future is here. It’s just not evenly distributed yet.“

Tom EvslinTom Evslin on the history of mass customization. Tom Evslin, a technology veteran and pioneer of many core technologies of the information age, posted in his blog today – in a comment of Tim’s post – a great story on the history of mass customization.

Until today, I always paid tribute to Alvin Toffler for mentioning the concept first, who quoted (in 1970) Robert H. Anderson, at this time Head Information Systems, RAND Corporation, that „The most creative thing a person will do 20 years from now is to be a very creative consumer… Namely, you’ll be sitting there doing things like designing a suit of clothes for yourself or making modifications to a standard design, so the computers can cut one for you by laser and sew it together for you by NC machine …“

But Tom has the following story to share:

In 1963, IBM paid me overtime for attending courses and lectures at its System Research Institute subsidiary – plus an all-expenses-paid drive into NYC. One Tuesday night the lecture was on the kind of future that computers would make possible. Those who thought about that at all thought of a Big Brother sort of world and enforced uniformity since computers liked dealing with millions of items which were all formatted just the same.

But the speaker at SRI said that computers would make mass customization possible.

“Imagine,” he said, “going to a store and seeing a dress you like (nb. no online shopping in the dark ages). The clerk takes your exact measurements but then asks if you would like any changes to the design. You say ‘I’d like the fleur de lis a little smaller, the straps a little wider, and the hem an inch higher.’ After just a short wait a machine disgorges just what you want. Computers will make it possible to undo the uniformity and conformity that began with the industrial revolution and mass production.”

Wow! Not that I bought any dresses with or without fleur de lis in those days but I was really turned on by this. Didn’t really have anyone to discuss it with because my co-workers at IBM were much older than me and not as given to bursts of enthusiasm and no one else knew what a computer was.

So why are we not all customize our dresses (or dress shirts) today? Here the third provides an answer.

Robyn WatersRobyn Waters on Mass Customization. Business Week today posted an interview with Robyn Waters, a „Trend guru“ on „spotting what is next“ and former vice-president of Trend, Design, and Product Development at Target.

While I really love her work for Target and how she turned this company in place for great shopping experience and discoveries (Target’s high-profile, high-revenue „design-for-all“ marketing strategy, developed by Waters, is a industry benchmark), she really missed the point when asked about the which companies she recommends watching that are great in mass customization? Her answer:

„Mass customization refers to products for a mass market that are designed so customers can personalize them to their exact needs or desires.

Companies doing a wonderful job of mass customization are: The U.S. Postal Service and the www.mystamps.com site. You can design your own postage stamps…upload a photo, chose a color, a border, a denomination, pay by credit card. Jones Soda uses digital technology to customize labels. The customer uploads a photo, writes a label, selects the flavor of soda, and a case of custom-labeled soda is shipped to their door. Starbucks allows you to customize your cup. There are purported to be over 19,000 ways to order your coffee drink at Starbucks.

M&Ms allows you to select special fashion colors, and 95% of Mini Coopers are customized. Cold Stone Creamery customizes your cone with mix-ins. My Twinn is a doll that is customized to look exactly like your child. TiVo turns you into your own TV programmer. iPod gives you all the controls for your music when you want it.

I prefer the term „customer-made“ to „custom-made.“ These examples turn a customer into a designer.“

I totally share her last comment. But are the companies she quotes really good examples for mass customization worthwhile watching. I doubt this. Most of them are examples of online mass customization of the first generation. Are you really a designer of you order a latte with skimmed milk and extra cinnamon at Starbucks? Are you a designer if someone create a doll that looks exactly like you? Is a custom soda label the future of customization? Well, then I should stop writing this blog.

Tom’s 1963 quote of mass customization of much more insightful and futuristic — almost 45 years ago! I just mention this as it are exactly this kind of examples that make it difficult to bring mass customization forward and shift it out of the niche of custom embroidery etc. If forward looking thinkers like Robyn Waters use these kind of old examples and narrow ideas, then it will be difficult to motivate other managers to really see a sustainable business model behind the concept.

One post that I just found today: The New York Times has a good review of Zafu.com, the mass customization alternative I wrote about some while ago. While the article in general praises the Zafu service, it remarks that it does not weigh heavily enough a user’s brand preference. But the label of a jeans is a as a big factor as the fit. The article also comments on the increasing use of other personalization services, like gift-finders or recommendation engines. Nothing new, but finally getting implemented.

24 09, 2006

Printing T-Shirts and Money – Inside Story in the Chicago Tribune on Threadless

By | 2018-05-07T15:33:33+00:00 September 24th, 2006|Cases-Consumer, Clothing, Co-creation, Crowdsourcing, Design, Long Tail, MC Alternatives, T-Shirts, User Manufacturing|

Threadless in the Chicago TribuneThe Magazine of the Chicago Tribune, one of the large US quality newspapers, recently featured a LARGE (7 page) cover story on Threadless and their user-design t-shirt business. I talked extensively with Steve Johnson, the article’s author, some weeks ago about the business idea behind Threadless. He did a great job in documenting the past, present, and future of Threadless. Read the entire story here.

Here are some interesting quotes from this article:

The Art-Gallery Model.


[Threadless] have this innate understanding that what they are really selling isn’t a T-shirt so much as the tale of how it came to be, a narrative that involves an artist, a community and a company that sets itself among, rather than above, that community.

„I always compare it to an art gallery,“ says Nickell, who’s 26 and holds the title of president because, in addition to programming the site … and doing designs of his own, he deals with the lawyers and accountants and landlords. „You have people who come in and look at the art, people who made the art, people who are buying the art.“

User manufacturing. In the article, Jim Coudal, a Chicago based consultant, summarizes the Threadless model with the great phrase „If they come, we will build it.“ And indeed, that is some of the quintessence of the Threadshirt business model — and of other businesses which focus on providing manufacturing capabilities to users:

Threadless is „not building something and selling it to an audience. They’re building an audience and selling them what they say they want. .. The Internet has also helped Threadless find and take advantage of the world’s „distributed creativity.“ Just as there are great writers who now have an outlet via blogging, there are great designers who have an outlet via things like the Threadless competition.“

Interactive value creation. Steve Johnson then quoted me very neatly, summarizing why Threadless is a perfect example of „interactive value creation„:

Distributed creativity „is a very difficult thing to get. In a normal company, you identify the coolest artist and commission him or hire him. What they do is they broadcast their problem: Who makes me the best T-shirt? From an economic point of view, you don’t have to know who is the best person. You let them self select. Of course, it only worked because, in their case, they have a lot of desperate artists out there. You have a lot of unemployed graphic design graduates. And they somehow exploited this, but to mutual benefit.“

Fashion as Pop-Songs. Patric King, a prominent Chicago designer, compares in the article the Threadless model with a pop song:

„What [Threadless is] doing is just sort of building the wearable equivalent of the pop song,“ King says. „They throw it up and see what climbs up the Top 40. I’ve run across a couple of other companies trying to do the same thing, but the work’s just not as good. For some reason they just get prettier stuff. Their community has just sort of trained themselves that that’s their standard.“

A new support industry. Share of labor is the oldest economic principle. And it also helps at Threadless. The article reports about Cody Petruk, a graphic designer for a Canadian software company who owns „about 60“ Threadless tees and has seen three of the 13 designs he’s submitted get printed. But Petruk also runs a web-site, threadies.org, which supports user designers to participate and win in the Threadless contests. A consultancy for t-shirt designer (McKinsey and BCG, listen!).

The limits of the Threadless model.

„But there are also questions about how much growth a community can endure before it stops feeling like a community. Right now the site is a free-flowing and very entertaining mix of design submissions, which registered users grade on a scale of one to five, blog postings about the designs, links back to other projects and, of course, the store. In a recent week, Nickell says, they had almost 10 million page views from just 500,000 unique visitors.

But already, some longtime site users grumble that as the group has grown, the designs have moved away from their artsy roots and become too cutesy, too clever or too pop. The all-time best-selling Threadless shirt certainly isn’t cute. Called „Flowers in the Attic,“ it depicts a svelte young woman shooting herself in the head, causing birds to fly out. The company has sold 30,000 already, compared to a typical first printing of 1,200 shirts, and is printing another 10,000 for the holiday sales rush.“

And the article finishes with a job offer: The Threadless founders are currently considering to hire a COO to run the daily business of the company. Condition: a suit and no t-shirts.

After the article has been published, the Threadless users commented quite enthusiastically. One comment, posted by Radioactivejosh a few hours after the article was published, provides a great perspective why users love Threadless:

„The article hit it right on point; we don’t just buy the shirts for the design, but for the story, the meaning, the explanation and the excitement of new prints. It all plays a factor. If I didn’t read the explanation of Poet-Trees and I just saw it in Target, it would mean nothing to me. …

I LOVE when i see people with Threadless tees, because i feel like I know them. They understand the shirts, they visited the site and browsed and saw something they liked. They weren’t just trying to be trendy and went into Urban Outfitters ad bought a tee shirt they saw. Threadless tees have a lot more going into them than just buying them.“

More information:

The entire Chicago Tribune article in full text.
– The article with all pictures as an user scan.
Discussion about the article at Threadless with more customer voices.
My report on Threadless in this blog
How Look-Zippy developed the Threadless model further

PS: If you want to know EVERYTHING about the upcoming T-Shirt-Economy: Adam Fletcher, who wrote his master thesis about Threadless and is now working for Spreadshirt, maintains a great blog about t-shirts, with plenty of references to mass customization and user co-design: www.hiphipuk.co.uk

9 08, 2006

This is so long tail: Newly Launched ZAFU.com Helps Women With Personalized Jeans Recommendations to Find their Perfect Jeans

By | 2018-05-07T15:33:40+00:00 August 9th, 2006|Cases-Consumer, Clothing, Customization Trends, General, Long Tail, MC Alternatives, Personalization, Technologies & Enablers|

Personalization as a more scalable alternative to mass customization?

Zafu.com HomepageMany women I know share this experience: Looking frustrated at thousands of jeans listed on a search engine, or carrying a pile of denim into a changing room – just still to find not the jean that really fits. ZAFU.com. a new venture by Archetype-Solution’s Rob Holloway, wants to provide help – and is the perfect example of an application riding the long tail.

Remember (see post from July 28) that the idea of the now bestselling The Long Tail“ book by Chris Anderson is that today there are (a) unlimited choice and variety, (b) more consumers that want to utilize this variety to find a better fitting product, (c) large profit opportunities for companies not focusing on a few large blockbusters or hit products but on helping customer to explore this variety.

Anderson’s book focused on long-tail-applications in the digital sphere, music, books, and movies. But zafu.com brings this into the world of apparel.

CNN described in a press coverage Zafu’s concept quite well:

Zafu: How it works„Sizing jeans to the myriad shapes of women is a challenge even in a department store dressing room, let alone online. Zafu.com, launched this week, arrives as the industry shifts from years of marketing baggy or flare-cut jeans to a skinny silhouette that is much harder to size and wear. „We’ve taken the trouble to actually measure and check the jean and try it on people to see how it really fits,“ Chief Executive Rob Holloway told Reuters. „We are the friend in the dressing room, I guess.“

Zafu asks women shoppers 11 questions about how they prefer jeans to sit on their hips or waist to create a body profile. That alone is a departure from the incongruous body-type descriptions of „pears“ or „triangles“ found in fashion magazines and retail catalogues.

The results are used to match the user with as many jeans as could suit them from a database of hundreds of styles, from broadly marketed Gap to pricey Seven, then link them to a retailer to purchase.“

Robert HollowayIn a recent phone conversation with Rob Holloway, he described the laborious process it took them to set up this fit database. They invited hundreds of women in their offices, each woman hat to try on 32 different jeans, all fits being evaluated by the company’s own apparel experts. This gave them both information about women’s shapes and figures and information about the cuts and fitting secrets of dozens of different jeans brands. To update this information, Zafu has created a streamlined process so that new models can easily being integrated into their database and assortment.

Correct sizing is one of the biggest obstacles to the growth of online apparel and footwear sales, which are expected to rise in the US to $13.8 billion this year from $11.3 billion a year ago, according to tracking firm Shop.org data. Almost 14 billion sounds a lot, but is only 6 percent of total U.S. apparel and related sales.

The jeans market is an interesting market segment. Market research firm NPD Group reports women’s jeans sales reached $7.8 billion for the 12 months through March 2006 — a 10.8% increase over the $7.04 billion reported during the same period a year ago. This data is on top of a 13.7% growth rate of jean sales between 2004-2005. Much of this growth comes from new jeans models and niche designer brands – offering more choice and options, but making the entire selection process also more difficult for women to navigate.

CNN quotes Ellen Tolley Davis of Shop.org saying „Many consumers still want to touch and feel merchandise before they buy it. When it comes down to particular sizing for shirts and pants, there’s still some room for retailers to make improvements.“

This is exactly what Zafu does. They also provide a service that you will get not from many retail associates: Zafu’s web site will tell you also when there is NO jean at all in their assortment to fit your body – asking you to postpone your purchase.

Zafu will tell the consumer outright and suggest she check in periodically as styles are updated. „We wondered, should we be completely honest here and show someone zero

[results] or fiddle a bit,“ said Holloway.

They decided to be honest – and this is exactly where the value of such an intermediary comes from. But according to their estimations, their assortment of analyzed and databased jeans is already large enough to provide an exact fitting jean for 94% of all consumers. And loosing this 6% of sales (theoretical) is a good price to pay to show to the other users that they are really serious and honest about fit! Early users of the service seem to love it a lot, as this customer review suggests.

Zafu also allows women to save their profile making the process even easier next time they return. This helps them also to inform customers when a new jean is added to their assortment that exactly fits their body style. However, if a user does not want to leave any data, she does not have to do register etc.

And how does Zafu make money?

First, there are provisions for each sale. Zafu does not carry any inventory, but directs customers directly to the web sites of affiliated retailers and gets the usual commissions between 5-20% of each sale.

Second, they will provide in-house fit recommendation services to online and offline retailers, helping the customers of just one brand to navigate the assortment in a store or online shop better.

Third, I believe there is a lot of potential to extend the service to other product categories, becoming the one-stop style adviser for women with regard to fit. This could also provide some nice aggregated market research data, another potential source of revenue. For this, a cooperation between My Virtual Model and Zafu would be a perfect option.

For me Zafu is also an interesting business model as it provides another alternative to real mass customization. Zafu’s parent company, Archetype, launched in 2003 a fit consulting business that provides mass customization services to some of the leading apparel retailers and brands in the US, including Land’s End’s Mass Customization business.

Zafu’s personalization service is an alternative model. It may not have the inventory advantages and value prepositions of mass customization, but provides a much more easy to implement and much better scalable system. The future will show where there is more value for customers. I believe that both models will work hand in hand and supplement each other: For most consumers, a better matching service as zafu.com will provide sufficient value. For others, however, the ultimate product will still be the truly custom jean — providing not only perfect fit, but also all the hedonic satisfaction connected with a custom product.

Updates:Customized online fashion finally clicks with consumers„: A journalist tests zafu.com (and competitor myshape.com) [Thanks to madeforeone.com for this link]

Report on Internet-Retailer (Nov 7, 2006): Shopping.com, a large shopping portal, has partnered with zafu.com to launch a women’s jeans finder on the shopping engine. The new feature, accessible under a link from women’s clothing category pages on Shopping.com, carries shoppers who click on it to a co-branded web site that guides them through the process to yield a selection of jeans and then links to the merchants where they may be purchased. The feature exposes shoppers using it on Shopping.com to brands they might not have previously known about or considered, but which might be a fit for them. “By suggesting new brands, styles and fits for shoppers, Shopping.com can offer them more relevant choices via a recommendation expressly tailored for them,” the company notes.

Update (20 Nov 2006):
The New York Times had a good review of Zafu.com. on Nov 20, 2006 While the article in general praises the Zafu service, it remarks that it does not weigh heavily enough a user’s brand preference. But the label of a jeans is a as a big factor as the fit.

30 07, 2006

Consumer Created Branding: Rob Walker on Minibrand Entrepreneurs, The T-Shirt Economy and Why This Is an Alternative to Mass Customization

By | 2018-05-07T15:33:47+00:00 Juli 30th, 2006|Cases-Consumer, Clothing, Co-creation, Crowdsourcing, Design, General, MC Alternatives, Sneaker, T-Shirts|

NYT Magazin July30, 2006The NYT Magazine (July 30, 2006 issue) has an interesting cover story on („The Brand Underground“). It provides a great insight study in the world of consumer created branding, the minibrand entrepreneurs. In great detail, NYT columnists Rob Walker draws the picture of leading-edge consumers who turn their lifestyle into business.

Trendwatching.com called these consumers minipreneurs. Their scope of activity is broad, „Some design furniture and housewares or leverage do-it-yourself-craft skills into businesses or simply convert their consumer taste into blog-enabled trend-spotting careers.“ Walker writes. „Some make toys, paint sneakers or open gallery like boutiques that specialize in the offerings of product-artists.“ All of them produce products which are a perfect illustration of the Long Tail.

Most of them also serve the need for uniqueness for the people buying them. You don’t purchase (often for a large amount of money) a product from a small sub-brand because you want to look like every teenager in Urban-Outfitter clothing. This makes these minibrand entrepreneurs an interesting alternative model to mass customization: Instead of co-designing an own product, a consumer may turn to one of the minibrands to feel individual. Interestingly, the categories where minibrand entrepreneurs are most active, t-shirts and sneakers, are also two of the largest categories of mass customization in the consumer good field.

Rob Walker’s main theme in the article is how corporate or anti-corporate these consumer-generated brands are. On the one hand, their founders see their brands as a „cool“ way to earn a decent living. But still:

„Many of them clearly see what they are doing as not only noncorporate but also somehow anticorporate: making statements against the materialistic mainstream — but doing it with different forms of materialism. In other words, they see products and brands as viable forms of creative expression.“

To look into this paradox and generate a better understanding of the minipreneurs, Walker focuses on the t-shirt economy. He quotes three trends or enabling factors that helped small t-shirt labels, which pop up in an enormous variety, to become one of the largest categories of consumer-generated brands:

„One thing that has changed since the days when they

[the first sub-culture t-shirt labels of the 1980s] scrambled to make a living is that Japanese consumers have embraced certain small New York brands as something culturally significant and worth a price premium. Nigo, a Japanese designer, built a fanatical following for his A Bathing Ape brand partly because he collaborated with so many graffiti writers and others who had an aura of authenticity that impressed young, hip Japanese consumers.

The second change is technology, which has allowed production to become more accessible. (It is easier than you think for a two-person brand to work with factories overseas, using computer files and the occasional package.) The technology of the Internet has also acted as an amplifier. … There are blogs like Hypebeast and Slam X Hype dedicated to this practice, reporting dozens of new products or design collaborations from the brand underground every day.

There is a third factor: manufactured commodities have in fact become accepted as quasi art objects, and there is no more stark example than the sneaker. Hunting for unusual sneakers and modifying them with markers or different laces has been cool for decades, a phenomenon defined in Harlem and the Bronx.“

While other minipreneurs may not build on the willingness-to-pay of Japanese teenagers, the two other factors are main enablers of many co-creation products as well. After reviewing the story of several user-created t-shirt labels (an world that sometimes even Walker as an expert admints not to understand totally), Walker comes to his conclusion — and provides a great insight into the motivation of consumers to become active producers:

„If the dance between subculture and mainstream has always been more compromised than it appears and if every iteration of the bohemian idea is steadily more entrepreneurial than the last, then maybe a product-based counterculture is inevitable. Maybe subcultures are always about turning lifestyles into business — or the very similar goal of never having to grow up.

And I have to admit, the more time I spent with the minibrand entrepreneurs, the more I had to concede that what they have been up to is more complicated than simply imitating the culture they claim to be rebelling against. They believe what they are doing has meaning beyond simple commercial success. For them, there is something fully legitimate about taking the traditional sense of branding and reversing it: instead of dreaming up ideas to attach to products, they are starting with ideas and then dreaming up the products to express them.

Rob Walker's blogSite note: Rob Walker has a regular column in the NY Times Magazine, where he often writes about a other great minipreneur, mass customization and customer co-creation businesses. He also has a great new blog site that should be worthwhile reading for you. This blog regularly links to his latest column, follows up on issues and ideas raised there, and „wants to advance the conversation about matters relating to what we buy and who we are“: http://www.murketing.com/journal.

24 07, 2006

Collective Customer Commitment and Crowdsourcing: How Look-Zippy is bringing the Threadless model to the next level

By | 2018-05-07T15:33:50+00:00 Juli 24th, 2006|Cases-Consumer, Clothing, Co-creation, Crowdsourcing, Customization Trends, MC Alternatives, Open/User Innovation, T-Shirts|

A recent report in Business Week about our SMR paper on Threadless and Muji’s strategy to use early customer commitment to reduce the new product development risk brought us some good feedback and comments on the concept (see the updated original post ).

[And of course we are just proud that after The New York Times and Der Spiegel another major publication refers to our work :-)]

Threadless uses crowdsourcing in three ways: (1) To generate new designs, (2) to evaluate submitted designs, and (3) to sell its products via an affiliate marketing system and social network.

SpreadfraiseBut the market is already progressing faster. As you may already have read in other blogs, Spreadshirt, the German T-Shirt Customizer working like Zazzle or Cafepress, just announced a take-over of LaFraise, the French Threadless clone. This will provide Spreadshirt the ability to integrate its users even further in the design process and to supplement its highly flexible, but expensive on-demand printing concept with the business model of screening demand before (mass) production. I am curious to see which innovative business models will be resulting from this merger.

Another company however has already brought the Threadless concept to the next level: Look-Zippy, a Sénergues, France, based t-shirt seller (thanks to Jochen Krisch for the link).

Remember that the key aspect of Threadless‘ model is the aggregation of commitment of its customers. Threadless does not face the conventional risk of a fashion company whether new design variants will become a hit or miss. This risk is reduced tremendously by the participation of its customer community in the assortment planning process.

The evaluation of new designs by its customers helps Threadless to pick exactly those new designs which find the highest appeal in its community. On top, customers express their informal commitment to purchase a design variant in case it would be selected and printed by ticking a small box. While this works very well, some uncertainty remains for Threadless: Exactly how many t-shirts they shall print, and in which size dispersion. This decision can be only based on forecasting and rule-of-thumb guessing.

Even if t-shirts are a product with high margins and low inventory-cost, the „special sales“ periods at Threadless indicate that there are some overstocks of t-shirts which do not sell as well as the customer evaluation predicted, or where Threadless‘ management ordered too many of the wrong sizes.

LookzippyThis is where Look-Zippy has perfectioned the Threadless business model. At the beginning of the process, these French entrepreneurs crowdsource everything like Threadless: An open design competition captures the distributed creativity of creative users, and the selection of the best designs builds on the evaluation capability of the entire community.

But then the process differs: Instead of scheduling the winning designs immediately for production, Look-Zippy starts selling first by taking binding orders. Selected new designs are listed for exactly two weeks on the web site (a ticker prominently shows the remaining time – Woot.com pioneered this strategy online). Customers can place an order only during this period, once the time is up, no more orders are possible — and only then production starts.

The result: The shirts are produced in exactly the right volume and size dispersion. This binding commitment of customers allows Look-Zippy to mass produce only the products that really fit their customers‘ needs – a marketer’s dream. This model is much closer to the original model of collective customer commitment which was developed by Elephant Design and Muji in Japan at the end of the 1990s (more info on Muji): The risk of new product development and planning is outsourced to the customers.

The disadvantage for customers of this model however is a slightly longer waiting time/ But this may be counterbalanced by the „limited edition“ feeling of the shirts. Also prices should remain low on the long run, as an successful product has not to cover the wrong forecasting of other variants.

Combining the creative talents of the crowd (open innovation), the commitment of a community for a new product (collective customer commitment method), and the limited edition approach of consumer markteters seems like a winning strategy for other industries as well. I am curious to see in which other consumer good industries this model will catch up first. Please leave a comment or e-mail me if you have any candidates or examples!