It is no surprise that it’s becoming increasingly challenging for manufacturers to differentiate themselves in today’s highly competitive Consumer Packaged Goods (CPG) markets. Consumers often struggle to find real differences in the plethora of products available in our long tail economy and this can drive purchasing behavior towards the lowest price option. In this context, charging a premium for higher-end options can be difficult to sustain, sometimes leading to a commoditization effect within certain product categories. Mass customization is one possible strategy to address these challenges and reinvigorate stagnant markets.

The term “mass customization” was first popularized by Joseph Pine in the early 1990s, who defined it as “developing, producing, marketing, and delivering affordable goods and services with enough variety and customization that nearly everyone finds exactly what they want.”[1] The concept gained a great deal of attention and was thought by some as a vanguard to replace mass production as the new paradigm for manufacturing. However, it never delivered on its promise and remained a strategy only used by a few companies.
Today, a resurrection of customization is taking place across a range of markets thanks to the evolution of technology and changes in consumer lifestyles. In the digital world it has become the expected norm, with some hardware companies building customization capability right into the core functionality of their products. Sonos, for instance, provides audio systems that customize themselves to adapt to each individual home’s acoustic environment. Even amusement parks like LEGOLAND are now allowing visitors to program their own ride.
For CPG companies, the logistical challenge should not be underestimated. Enormous production runs and vast distribution networks generate significant operational and organizational complexity. But here again, the rapid evolution of technology is unlocking opportunities: by moving the customization moment closer to the point of purchase, manufacturers can simplify the supply chain significantly and engage with the consumer where it matters the most.