The advantages of product customization in eCommerce

You’ve certainly heard about product customization and you already know that it’s important. But do you know how to put it into practice? 

That’s where product configurators jump in! 

Instead of creating personalized products and experiences for the customers, why not let them create their own unique products? 

In this article, you’ll learn more about product customization, using product configurators, and all about advantages of product customization. 

So, let’s jump in and start with the basics!

What are product configurators? 

In essence, product configurators are software that function as a collection of all product parameters and characteristics. Every single solution offered by this product configurator is previously determined by the configuration logic.

The process of product configuration is an interactive process between the product configurator and the user. First, the user chooses a certain feature, the configuration engine validates the user’s decision, and the user can move on to making the next decision.

On the outside, the whole process seems simple. On the inside, it’s everything but simple. Product configurators are usually complex and they feature an enormous amount of product configuration rules. 

Now when we’ve shortly talked about the product configurators, let’s see how they would be of use for your business – and would they even be of use? 

Does your business need a product configurator? 

To be clear right off the bat – not every business needs one. But if you’re handling a large amount of products and each of these products has some features you can configure – why not use product configurators? 

Let’s take a look at some common situations you may encounter (or have encountered): 

You need to test new product editions and new product features? 

Here, product configurators come in really handy. Usually, you’d need to manufacture a completely new product to test this out, meaning – unnecessary expenses! With product configurators, you can create virtual editions of your new product! Certain 3D configurators allow you to create 3D models of your products and check out the product and its new features from every single angle.

You’re looking for a winning product? 

You’ve got a ton of products, but not all of them are doing well? That’s a common situation. When we apply Pareto’s rule to this situation, we can conclude that 20% of your products will generate 80% of your revenue. So, how to find these winners? 

By analyzing all of your customers’ decisions when configuring their own products, you’ll be able to more accurately identify the winning product combinations and focus on advertising and manufacturing exactly those products. It’s a win-win. 

Your sales team spends more team recording order details than actually selling? 

Instead of having sales reps record order details, why not let product configurators do it instead? That way, your sales team can spend more time selling your products. This applies even to complex B2B solutions, where you may not instantly know accurate cost estimates. 

These situations happen every day and for a long time there was no definite solution for those situations. Finally, here’s a solution. Overall, there’s a lot more benefits of product configurators, and if you’d like to find out more about them, check out this whitepaper for more information! 

For now, let’s focus more on product customization! 

What kind of impact does product customization have on your customers?

Simply put, product customization is the key ingredient for successfully approaching your customers. Not all customers experience your product in the same way. Therefore, implementing product customization into your business as a core strategy is crucial for delivering outstanding customer experiences. 

Let’s use Youtube as a common example. When you open your Youtube dashboard, you’ll see a ton of videos that instantly gain your attention. Being owned by Google, Youtube isn’t a stranger to making data-driven decisions. Thus, your dashboard will be filled with videos you’ll most likely want to watch. 

The more videos you watch, the more data you’re giving away to Youtube, making it easier for Youtube to recommend content based on your interests. Product customization at its finest! 

Today, making data-driven decisions and enabling product customization is not optional. It’s become a necessity to appeal to customers whose demands are rising extremely fast. And let’s be honest – we’re a lot more picky and demanding than we were just 5 years ago. 

Of course, that’s not a bad thing! Such rising demands are pushing for more innovations and ultimately, creating better products. 

Another interesting point to make is – customers are ready to pay more for a personalized or exclusive product! This particular hypothesis was confirmed by Deloitte in its recent research. They found that 1 out of 5 customers is willing to pay 20% more for a personalized or exclusive product. 

Customers who customize products to their likings are confident that they’re receiving additional value through using features such as product configurators. Finally, this resulted in their willingness to set aside some extra funds to order exactly what they want. 

Now, let’s take a look at the benefits of product customization and see what are some of the many reasons behind choosing this strategy! 

Benefits of product customization

There’s a lot of advantages of product customization in general, so in this chapter we’ll take a deep dive into the benefits you’ll experience soon after implementing this strategy! 

Product customization leads to more sales revenue

The most obvious advantage of product customization is indeed the increase in sales revenue. Alongside it, you can expect your customer satisfaction level to increase! 

As Deloitte found in their research, 20% of customers are ready to pay 20% more for a customized product. In the same research, they’ve found that around 36% of customers would consider buying a customized product. This tells us that customers are no longer taking only the monetary cost into account.

Customers are looking for value, which now opens new doors for your business. When searching online, they may even find a similar product for a much lower price – but can they customize the product to their likings? Can they see it in 3D before they even buy it?

This has become the new standard and businesses like yours now have the chance to adopt this winning strategy.

Product customization makes you stand out from the crowd

The global entrepreneurial climate has never been better. Starting an online business has become so straightforward and simple that there are now countless online businesses popping each minute. And that’s great! 

This situation offers you a chance to be unique and stand out from the crowd. Product customization process and product configurators have become strong competitive differentiators. 

The fact that customers themselves have become a part of your product creation process adds huge amounts of value to the product and creates a connection between a customer and your brand.

You’ll have better insight into your customer data

Customer data is now one of the most valuable assets for your business. Having fresh information on latest consumer trends and customer behavior gives you an edge over the competition. 

By allowing customers to create their own unique products, you’ll have better insight into your most popular product combinations, and by investigating even further – you’ll know why this combination was the most popular. It’s extremely important to get to know your customers. Once you’ve done that – introducing new products and services won’t be that hard!

Your customers will be more loyal to your brand

Once you’ve enabled your customers to create whatever product they want (in the boundaries of product configuration logic of course), you’ve just earned a loyal customer! This level of product customization is the highest level of adaptation to the customer, and one of the best ways to build customer loyalty. 

By interacting with your business through product configurator, customers are establishing emotional connection with your brand. 

Just remember Nike ID! When Nike introduced its own product configurator, that was huge. For the first time ever, we could customize our own ideal pair of Nike shoes. And after this pair of super-customized shoes comes to your door, it’s needless to say that you’ve already made an emotional connection with the brand. Nike got themselves another loyal customer! 

And once you’ve got your customers’ trust, your competitors will need to do wonders just to win them over. But that won’t be so easy.

How companies implemented product customization

Now, let’s take a look at how some companies solved this product customization issue! There are some cool examples, so stay with me, you’ll want to see this! 

Nike’s product configurator – Nike ID

You’ve read about Nike ID just a few paragraphs above, but it’s such a great example that I need to emphasize once again. There is a short backstory behind this great move. 

Even though Nike was the greatest sports shoes and apparel giant at the time, Nike wanted more. Their goal was to increase the revenue that comes through their D2C (direct to customer) sales channel. Needless to say, it was a success.

In the beginning, customized shoes were sold for around $170, which resulted in an increase of both positive PR and sales revenue! Since then, such product configurators have become more common. 

Also, after some time, they renamed their product configurator! Now it’s called Nike by You. Even the name of the configurators says that you can customize the shoes. What a win. 

Tesla product configurator

If you were thinking about buying an electric car, Tesla might be a good choice. When you land on their homepage and open their product configurator, you’ll most likely be amazed as much as I was. 

Tesla sells around 367,500 cars a year online. Tesla’s success is due to its innovative sales approach. And their high quality and Elon Musk’s personality. But back to their product configurator.

There’s no need for direct contact with the company when buying the car, and it’s an extremely fast process. Never before have we been able to buy a customized car in just a few clicks (excluding GTA games). 

Vespa product configurator

Say hello to Vespa – an Italian classic now available for full customization! And although this configurator may look simple at first glance – it’s far from that. Exactly 21,606 possible product combinations are available, and it was for this reason that Vespa chose Pimcore as the platform on which they’ll build the configurator.

Interestingly, they released this product configurator recently, in 2020. And despite the COVID-19 crisis, they had huge success! Thanks to the configurator, you can now build yourself a Vespa in just a few clicks! 

Check it out, draw some inspiration, and if you’re feeling like it – buy a Vespa! It’ll happen so fast you won’t even know you did it. 

You’re already thinking about how to implement product customization into your business?

If this whole concept of product customization seems like something that may add huge value for your business, there’s no time to waste.

I’ve been working around eCommerce, customization, and personalization for quite some time, and I need to say – I’ll gladly help you anyway I can. 

So, if you’d like to know more about this topic, or you need some help with building your product configurator – feel free to reach out to me at filip.bubalo@factory.hr! And if there’s anything you’d want to add to this article – please write in the comments! 

I hope you enjoyed the article! 

Until next time.

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