Why have configurator-based business models the finger on the pulse?

Mass customization is on everyone`s lips. More and more providers of customizable products can be found on the internet through the use of interactive media content such as 3D configurators. In this article we would like zo analyze this trend in more detail. In a first step, we determine which prerequisites must be fulfilled in order to ensure success with individualized mass products. In a second step, we would like to present some practical examples in which a 3D configurator forms the core of the business model.

Mass production and individual products stood in contradiction for many decades. Either one uses the advantages of mass production, which economies of scale, high automation and affordable prices for the customer or one manufactures individual products connected with very high costs. But how can both work at the same time?

Practice shows that this is possible. The trend is called mass customization and has been observed on the market for a long time. For example, customers have been able to configure their own individual PC at Dell or Mifcom for several years now.

As a first step, we would like to clarify the question of what prerequisites must be fulfilled to succeed with a geared business model to mass customization.

Business studies professor Frank Piller from RWTH Aachen University also got to the bottom of this question. In a large-scale study, Piller evaluated publications and case studies from the last ten years, /7on a survey of 238 companies from various industries, including the USA, Germany and Italy.

Piller came to the conclusion that investments in mass customization can be lucrative for many companies, regardless of products and sectors. In his study, Piller discovered three fundamental strengths in successful companies:

• The ability to recognize customers’ wishes and needs
• The ability to adapt production chains flexibly and as smoothly as possible.
• The ability to make the customer’s purchase decision as easy as possible.

In mass production, market research is a proven way to get closer to customers, but if you want to be successful with mass customization, you need to be much more flexible. With the ongoing development of innovative technologies, there are now good opportunities for entrepreneurs to enter the market. In addition to 2D solutions that have already been in use for many years, real time 3D configurators are increasingly found on the internet today, i.e. users can configure their desired product in real time.

Here you will find some application examples for real-time 3D configurators.

Mass customization concepts based on a real-time 3D configurator, facilitate the customer’s purchase decision through the realistic visual presentation of the end product and according to Piller, have a significant positive influence on the success of the entire business model.

Against this background, in recent months more and more entrepreneurs have ventured into mass customization with a 3D configurator as the core of the entire business model.

In the following, we would like to present some practical examples that are based on this concept.

As a first example, we present the eCommerce platform for personalisable furniture, MYCS.

Founded in 2014 by Kachun To, Christoph Jung, Claudio Bredfeldt and Kai Sap in Berlin, the StartUp offers its customers the opportunity to personalize their furniture with the help of a 3D configurator and thus to decide independently on the color, material, size or features of the products. The range currently includes dining and side tables, sideboards, shelves and various other seating furniture.

The young Berlin entrepreneurs benefit from a financial injection of € 10 Mio. The main investors include Beringea, a London venture capitalist, and Zimmermann Invesments. The main objective of these investments is to expand business activities throughout Europe. Part of these investments will be used to further develop the technology.

As a second example, we would like to present the spectacle configurator from manufaktur-sehen.de. With the help of a real-time 3D configurator, customers can design the model, the design and the temples of the glasses according to their own individual needs.

By combining it with other interactive and useful elements, such as an online trial, the 3D configurator can create real added value for the user. The realistic, visual presentation reinforces the user’s decision to buy and significantly minimizes risks.

Another lucrative industry for the use of 3D configurators is the jewelry sector. Several suppliers have already established themselves on the market in German-Speaking countries, such as the Swiss company Meister GmbH.

In a 3D boutique, customers can select their ring from a huge assortment and adapt the ring to their own needs, e.g. by adapting the material with the help of the 3D configurator.

In addition to the industries already presented, 3D configurators can also be found in numerous other sectors such as the automotive and horticultural industries.

Summary and Outlook.

Mass customization is on everyone’s lips. More and more customers want products that they can customize to their own needs. Customizable products do not always have to be expensive and therefore have a negative impact on the economies of scale of mass production.

In a large-scale study, Piller discovered three fundamental strengths of entrepreneurs whose business idea is based on the concept of mass customization:

• The ability to recognize the wishes and needs of customers,
• The ability to adapt production chains flexibly and as smoothly as possible,
• The ability to make the customer’s purchase decision as easy as possible.

The last point is strongly dependent on the virtual presentation of the configuration processes and the final product. The better the visual imagination of the future end product, the lower the purchase risk. Innovative media contents such as 3D configurators have a significant positive influence on the purchase decision.

In practice, there are already numerous providers for whom a 3D configurator and thus customizable product form the core of the business model. Successful practical examples have been found in the furniture, jewelry and eyewear industries for several months and years.

In some industries, such as jewelry, there is already strong competition for configurator-based business models based on the concept of mass customization.

The analysis of the US market reveals a number of sectors that have not yet been worked on in Germany, such as garden sheds. In the future business models that have not yet been discovered in Germany will be established based on the concept of mass customization with the help of a 3D configurator or other virtual elements such as augmented reality.

If you are still looking for a suitable business model, I recommend reading this article.

Do you have a business model, do you already know the wishes and needs of your customers and do you already know how to make your production chains flexible and adaptable without disturbances?

Then contact us. We will do the rest for you.