The Wall Street Journal published an informative article on its first front page of the year, entitled “Covid Slashed Consumer Choices. This Is Why They Aren’t Coming Back.”, on how Covid-19 caused many companies cut down the number of choices they offered.
Amazingly, The Coca-Cola Company cut down the number of drinks on tap by 50% (including every last choice product of Honest Tea, one of this tea drinker’s favorites).
As journalist Paul Berger asserts, this was exactly the right choice for many because of all the supply chain issues at the time, where cutting down on variety helped decrease manufacturing times and smooth logistics.
Kimberly-Clark, for example, “cut more than 70% of its toilet paper and facial-tissue products over a single weekend in 2020 as it rushed to satisfy a fourfold increase in demand”, according to chief supply chain officer Tamera Fenske.
Forego Variety For Mass Customization
Much of this variety is not coming back, which may very well be the right move, but there are many worrying aspects that I see here.
Regarding customer choices, Macy’s president and CEO-elect, Tony Spring, is quoted as saying, “the customer today does not want an endless aisle”.
No, no, no, no, no.
Executives must understand that there IS NO “the customer”.
Banish that phrase from your vocabulary!
There are only individual human beings with their own idiosyncratic needs, wants, and desires.
It’s fine to not cater to all of them, but never think the ones you do want to buy your products are some monolithic “the customer”.
And supply chain expert Inna Kuznetsova says, “Today, people would rather lose a portion of consumer demand as opposed to spending extra on too much variety.”
This certainly can be the right strategy for many companies, for no doubt variety adds costs.
But a better option for many – I think most – is to forego variety and instead mass customize their offerings.
Mass customizing means efficiently serving customers uniquely – offering each individual customer exactly what they want, but with low-costs, high-volume, efficient operations.
Variety is Not The Same as Customization
When I first wrote about Mass Customization over 30 years ago, I freely admit I got something wrong myself.
I thought customization included increased variety, which was exploding at the time. But variety, I eventually learned, is not the same thing as customization.
Variety is still producing customer choices in advance of customer demand, in hope that a customer will come along and buy the set choices out of inventory.
Variety is Mass Production’s last-ditch effort to save its old paradigm, which is why car companies have months of “tired iron” sitting around at various points in its supply chain, depreciating more every minute (but at least not rusting as much as it used to).
And that’s why apparel companies get rid of and even destroy 30% of their inventory after the selling season is over, wasting the earth’s resources by producing things no one wanted.
Customization Means Producing on Demand
Customization, on the other hand, means producing on demand when customers come along and say exactly what they want.
It’s the difference between Coca-Cola’s bottling supply chain – a paragon of push – and its Freestyle machine, where customers, yes, choose exactly what drink they want in their cup, but from an easy-to-navigate digital menu, not an “endless aisle” of finished products.
All the choices lie there as in-process inventory until individual customers effectively pull their personally preferred drink options out of inventory and into their cups, finished products just for them.
Mass Customization Offer True Customer Choice
One last thing journalist Berger points out: offering customers too many choices can yield overload, a “paralyzing choice” according to Nick Jensen, vice president of product at Malouf Companies.
(BTW, always pay attention to the last paragraph of news articles; that’s usually where you get the reporter’s true feelings on the issue.)
Choices can indeed be paralyzing.
So understand that fundamentally customers don’t want choice; they just want exactly what they want.
Shifting from producing variety to mass customizing to individuals offers precisely that.
