The personal touch

Delivering personalised products and experiences can provide benefits for both the brand and the consumer. And although offering personalisation might require a rethink of business operations, companies that embrace personalisation have an opportunity to create a differentiated proposition, command a price premium and improve consumer traffic and conversion.



The world of business is in the midst of a revolution.

Since the first smartphone went on sale a decade ago, digital devices and social networks have empowered consumers and have raised purchasing expectations. As a result, consumers are increasingly dictating what they want, where they want it and when they want it. They want their interactions with businesses and the products and services they buy from them to be personalised.

Consumers have become both critics and creators, demanding a more personalised, bespoke service and expecting to be given the opportunity to shape the products and services they consume.

The definition of ‘personalisation’ has continually changed. For some time, personalised signified exclusivity: personalised products were status symbols, a way of making consumers feel special and stand out from the crowd – whether that be a monogrammed shirt or engraved watch. While exclusivity has traditionally been expensive, rapid developments in technology have now made personalisation more affordable and accessible.

Today, consumers are able to put their own mark on a product, perhaps by selecting which new flavour of crisps should go to market, or being part of the marketing campaign, through social media and user-generated content.

The origins of personalisation go back to before the Industrial Revolution when, in the absence of factories or mass production, virtually everything was personalised. Fast-forward to the end of the second world war and the focus moved to the globalisation of consumer brands and economies of scale in manufacturing. By the 1960s, this approach had led to the rise of mass market products and mass consumerism.

The former focused on the homogenisation and mass production of goods, while the latter was the natural response to the former; where society enjoys the benefits of increased productivity and variety of the goods they consumer.

However, by the 1980s, the focused had started to shift once more, with the individual becoming all important, thereby establishing a demand-led consumer industry.

But personalisation rose to true prominence with the advent of digital, through modern manufacturing processes and technology. Businesses have not only developed the capabilities to measure specifically what each individual consumer wants, they can now link their processes and resources to provide it.

Market data and consumer segmentation has long been used to personalise marketing communications, first through direct communication in the post, and then, with the emergence of the internet, through email and text messaging. When consumers started to buy goods online, they shared not only more of their personal information, but also their purchasing history.

Digital marketing and e-commerce offered businesses advantages over high-street stores, including the ability to target consumers with personalised offers based on their online shopping and browsing data.

The modern consumer, typically glued to the screen of their smartphone, tablet or laptop, will find it almost impossible to avoid this direct digital marketing while browsing social media or swiping through an article.

Demand for personalisation, and coping with it

Perhaps most importantly, the demand for personalisation is there: more than a third (36 per cent) of consumers are interested in purchasing personalised products or services.

Clearly, consumer businesses, whether retailers or service providers, have a real opportunity to capitalise on this trend. In some retail categories, more than 50 per cent of consumers expressed interest in purchasing customised products or services, and a fifth of these would be willing to pay a 20 per cent premium for them. These proportions will only rise as society becomes more affluent and manufacturers seek to satisfy customers.

This is not just confined to younger consumers either: the over 55s are more likely to book a personalised holiday than millennials. Given the cross-generational demand, it is clear that retailers and service providers that do not incorporate an element of personalisation into their offering risk losing revenue and customer loyalty.

In personalisation, knowledge is power

However, for many B2C businesses, the demand for personalisation runs counter to the dominant model of providing high-volume products en masse. The move from mass production to mass personalisation can have considerable cost implications, so decision-makers have a challenge in understanding the net benefits to a shift in the business model.

Economies of scale have helped to ameliorate some of these cost concerns. Innovations and new technologies, such as digital commerce and content, data analytics and artificial intelligence are all making personalised product and service offerings more cost efficient. Flexible manufacturing and 3D printing enable mass customisation at lower costs and can also allow manufacturers to rethink their supply chains radically, to the extent that businesses are now delaying production until the last possible moment in the chain in order to provide customisation.

"Businesses are now delaying production until the last possible moment in the chain in order to provide customisation."

The growing use of data analytics means that product and service providers are getting better at knowing what customers want – and do not want. This means they can adapt their operations and product range to respond according to current tastes. Big data and analytics is a critical component of the personalisation process; matching the right consumer to the right product or service for them. It has never been more important for retailers to mine their data for rich insights on their customers. Customer relationship systems (CRM), website cookies and loyalty schemes will be key tools for the capture of this valuable data.

However, Businesses need to do more to demonstrate the value they are offering consumers in exchange for the data that they gather from them. Deloitte’s research shows that two-thirds of consumers (66 per cent) are concerned about the amount of information businesses hold about the, and only one in five (22 per cent) is happy for businesses to use their information to offer them personalised products or services. Furthermore, on a regulatory level, the use of customer data will almost certainly require an increased level of data governance in order to give customers control on how their data is used. Trust is therefore a vital component as personalisation becomes more pronounced.

You scratch my back…

It is important to realise that delivering personalised products and services can provide benefits for both the business and the consumer. As we have seen, consumers are not only willing to pay more for these services, but they are also keen to be actively involved in the customisation process. Receiving this kind of personalised experience will make the consumer feel more valued and recognised, and will in turn help drive long-term customer loyalty. It is much cheaper to retain customers than entice new ones, and businesses that do not incorporate an element of personalisation into their offering risk losing revenue and customer loyalty.

Offering personalisation will certainly require investment in technology, both to facilitate the design and manufacture of customised products and to execute personalised marketing campaigns. An evolution of business models and operation process is also required in order to adapt to consumer demands, rather than offering products and services in a one-for-all approach.

Those that embrace personalisation will have an opportunity to create a differentiated proposition in their market, and this could command a price premium and improve customer conversion. As we have already seen, personalisation could lead to improved efficiency, reduced wastage and lower costs, offering a path to sustainable growth.

"Those that embrace personalisation will have an opportunity to create a differentiated proposition in their market."

It may seem daunting, but in order to retain and grow their customer base, businesses will need to get personal with their consumers.

For more information on this topic, please read the Deloitte Consumer Review: Made-to-order: The rise of mass personalisation

Céline Fenech

Céline Fenech is consumer business research manager at Deloitte. She is a research expert with 17 years market intelligence and consumer research experience, predominantly focused on researching trends in the consumer goods and retail sectors. At Deloitte, she provides insights on consumer related sectors through the origination of research in the form of briefings, POVs and white papers. She is the lead author of the Deloitte Consumer Review series and the Deloitte Consumer Tracker, Deloitte’s own consumer confidence survey.