closed for business: Learning from a major mass customization experiment

We regret to inform you that Reflect will close for business on June 13, 2005. As a subsidiary of Proctor & Gamble (P&G), the Company has decided it is not currently in its long term strategic goals to continue the Reflect business and brand. We want to thank you for your amazing support and patronage over the years, and for helping us make the concept of custom beauty a reality!

With these words one of the most promising ventures in the mass customization world announced that it will close its doors. The experiment in selling customized cosmetics online started in September 1999, and I used it many times as a premier example of a large company investing in and potentially profiting from mass customization. So this announcement was a real surprise for me in the first moment.

After a second thought, however, closing Reflect in its recent form may come not as such a surprise. In an interview with the Cincinnati Enquire, P&G Spokeswoman Cheryl Hudgins said P&G has learned from Reflect and would apply some of the same techniques to its beauty-care brands (like Cover Girl, Olay, or Pantene). „What happened was, we learned what we needed to learn,“ Hudgins said.

Reflect’s presence online and in the retail world has provided P&G with valuable information and insight on custom beauty. One example of this, now available at retailers in the US, is Cover Girl’s Custom Compacts, a simple customization solution of cosmetics. And indeed, it may make a lot of sense for P&G to operate Reflect not as a stand-alone-customization business any longer, but to connect this strategy with its established product lines.

Connecting mass customization and mass production is a very important step for success (This is, by the way, also the theme of this year’s MCPC 2005 conference). To connect customization with an established brand name – and not with a new brand in a brand-driven industry like cosmetics – will help to build trust of customers to purchase customized products, still a new experience for most consumers. Also, knowledge gained from interacting with the customers of the custom goods can be transferred more easily to the standard assortment if the customization takes place in the same organizational unit and builds on the same product architectures.

In addition, building the distribution network and interaction system for customization may be much easier if existing points of sales can be used. To find the right point of customer interaction was one of the largest struggles for Reflect. The company experimented with many different web site layouts, but also with various own store formats. It realized that for a product like cosmetics a pure online version was not enough. Here, an existing retail network may provide a huge advantage.

Concluding, I am curious to see how P&G will utilize its experiences with to include customization in its established core businesses. Nevertheless, for the team, the corporate decision to close their business unit was tough. Ginger Kent, who was CEO of from December 1999 until May 2002, said the Cincinnati Enquire, she was disappointed by the Reflect’s demise. For her, it was more than an experiment. „In 1999 when I joined it, it was definitely a business proposition for the company,“ Kent said. „It was very much forward thinking. Maybe it was too far ahead of its time, who knows?“

By | 2018-05-07T15:35:20+00:00 August 26th, 2005|Cases-Consumer, Failures and Flaws|

About the Author:

Frank T. Piller is a Co-Director of the MIT Smart Customization Group at the MIT Media Lab, Massachusetts Institute of Technology, USA, and a chair professor of management at the Technology & Innovation Management Group of RWTH Aachen University, Germany, one of Europe’s leading institutes of technology. Before entering his recent position in Aachen, he worked at the MIT Sloan School of Management (2004-2007) and has been an associate professor of management at TUM Business School, Technische Universitaet Muenchen. Frequently quoted in The New York Times, The Economist, and Business Week, amongst others, Frank is regarded as one of the leading experts on strategies for customer-centric value creation, like mass customization, personalization, and innovation co-creation. His recent analysis of the crowdsourcing business model “Threadless” (co-authored with Susumu Ogawa), an innovative crowdsourcing business model in the fashion industry, has been elected as one of the Top-20 articles in MIT Sloan Management Review.