How much do consumers care about personalised goods?
By: Emilie Spire
Tags: Branding, Tech, Consumer, Personalization, VC

At Felix Capital, we are passionate about consumer brands and platforms. We are always looking for the newest emerging trends in digital lifestyle and digital media and are lucky enough to meet inspiring and visionary founders as part of our daily job. Over the past months, I have come across more and more propositions offering “personalised” consumer products and experiences. How much are consumers actually looking for such personalised propositions?

The large consumer goods players such as Unilever and P&G have built global empires based on the uniformisation of tastes, enabling them to leverage their production processes and to benefit from economy of scale. Almost anywhere in the world, you can find the same Head & Shoulders shampoo. These mass market products used to be appealing in a world where people where aspiring to the same ideals — and even watching the same TV shows (Friends has been aired in 50+ countries). Some consumer products, such as the Big Mac, are so standardised around the world that we can use them to build an index to measure the purchasing power parity between two currencies.

Unilever global and standardised empire

However, today’s modern brands have a direct relationship with their consumers. Unlike Unilever, P&G and others, they don’t need retailers to connect with their end users: a simple Squarespace website, or even a shoppable Instagram account, is enough to connect with their community and start selling their products. As a result, these modern brands are able to gather a tremendous amount of data about their customers, from their basic information (age, location) to more granular data, such as which products customers have clicked on and how much time they have spent on a page.

And customers are ok with sharing such information! Actually, more than one in four consumers between 16 to 24 years old are happy for businesses to use their personal information to offer them more personalised products or services (source Deloitte report). And some of these consumers are also ready to answer detailed questionnaires, to take blood or even DNA tests if that could enable them to access to more personalised food, supplements, beauty, etc.

Prose (on the left) offers personalised haircare while Thriva (on the right) enables customers to take control of their health thanks to their home blood test kit

Empowered by social media, consumers can easily discover what’s new on a market and can communicate their needs directly to brands. Today, each consumer sees him or herself as a unique individual that deserves a unique treatment tailored to its tastes and needs. As a result, they expect brands to offer them a seamless purchasing experience, to remove all hurdles of complex decision making induced by too much choice, and to suggest them the products that will be the most efficient for their specific needs. What more ultimate luxury exists than bespoke products and experiences provided to you by your own concierge and personal tailors?

To answer to this bespoke aspiration, modern brands have evolved from mass personalisation (custom recommendation a la Amazon and Netflix) to product customisation (such as StitchFix boxes)… now to bespoke offerings (such as Nike iD in fashion or Seasonly in beauty). Personalisation can also take place in the way brands communicate with their community, by making sure that each one of their customers feel unique by receiving the right message at the right time.

Today’s consumers perceive so much value in personalisation that they are ready to pay and wait for it: 1 in 5 consumers who have expressed an interest in personalised products or services are willing to pay a 20% premium and 48% said they were willing to wait longer for a personalised product or service (source Deloitte report).

At the end of the day, I personally believe that personalisation in consumer goods is all about balance. In the digital lifestyle space, consumers want to be inspired and they also want a product or service that works for them, that makes them feel better. Having a consumer-centric approach is still the best way to be sure to answer to your community’s needs, which could be with a bespoke proposition or not.