A Mass Market of One - The University of Texas at Austin：一个得克萨斯大学奥斯汀分校的大众市场

A Mass Market of One - The University of Texas at Austin：一个得克萨斯大学奥斯汀分校的大众市场 A Mass Market of One As custom online ordering moves into the mainstream, Web merchants learn to fine-tune their trade, Business Week, Dec. 2 2002 Like many other Web businesses, it was a good idea that took time to blossom. The year was 1997, and Masterfoods USA, the division of Mars Inc. that makes M&M's, launched an online site called Colorworks. It offered a palette of 21 colors to coat specially ordered M&M's. Customers could pick any combo--maroon and gold, say, for their school colors, or silver for that special anniversary. It was a model of flexibility except for one thing: The minimum order, designed for wholesale buyers, was 40 pounds--enough M&M's to give the celebrating couple a sugar overdose. Chocolate lovers clamored for smaller portions. And in April, 2001, Masterfoods responded, tweaking its manufacturing to produce eight-ounce and five-pound customized bags and selling them online. Although these cost nearly three times the price of regular M&M's, they've become a growing niche business, with sales doubling every year, say execs. "We're using technology to give consumers the products they're after," says Bill Simmons, general manager of the Masterfoods business development team. From colored bits of candy to hockey sticks and complex plastics, lots of items are now being tailored to individual desires. This is part of a continuing industrial evolution--from mass production to mass customization. The result is the mass market of one. And the Web is helping to bring it about. Companies are wooing shoppers with a digital version of the classic Burger King come-on: "Have it your way." The appeal is extending from retail stores into the labs of the world's biggest manufacturers. Procter & Gamble Co. (PG ) lets shoppers design everything from eye moisturizer to liquid foundation makeup at its reflect.com site. Engineers at Rockwell Collins Inc. (COL ) use virtual online labs to tailor materials for fighter-pilot visors. And Yankee Candle Co. (YCC ) woos buyers with brightly-hued labels and exotic scents they can mix and match for the right candle. "Mass customization will grow, becoming a necessity in some industries," says Paul H. Zipkin, professor at Duke University's Fuqua School of Business. Companies are approaching this new world with caution, and with good reason: The Web can find plenty of customers for made-to-order products, but retooling a factory to spit out thousands of faultless variations on a theme is no easy job. Nike Inc. (NKE ), for example, spent six months working with suppliers in Asia to rejigger its manufacturing for custom-made sneakers. Other companies, aware of the complications, start off with reduced offerings. Staples Inc. lets customers pick fabrics or colors--but only for chairs. Today's custom e-marketers have lots to learn from services that have flopped. One clear lesson: It's nearly impossible to customize tastes. Why? Words rarely suffice. When Generals Mills Inc. (GIS ) launched Mycereal.com two years ago, it urged breakfasters to order their dream cereals. But customers found that the taste fell far short of their mouth-watering descriptions--and cost more than $7 a box to boot. It was the same story at P&G's coffee site, Personalblends.com, which tempted coffee lovers with blends customized to their own tastes. Shoppers were stumped by the questions designed to help define their taste--and were unwilling to pay the $10 a bag that P&G needed to charge. Still, recipes for success are emerging. Industries such as clothing that can charge a premium for quality are a natural. Others, like golf clubs and hockey sticks, that deal with simple shapes also have an edge. For businesses rooted in databases, from credit-card companies to mortgage lenders, the race to the mass market of one is well under way. Customization not only expands markets but also allows businesses to charge more. Take Branches Hockey in Osceola, Wis. In April, 2001, the stickmaker launched a service that lets consumers order customized products. Players pick from 26 options, including the length of a stick, blade patterns, and curve patterns for the blade. Branches plugs the data into its digital cutting equipment and cranks out a custom stick in five days. The company charges 39% more for custom sticks. Branches says the online offering has increased revenues for the entire business by as much as 25% in the past year. Companies that turn to customization can offer services that wouldn't work without the Web. Catalog clothing company Lands' End Inc. (LE ), which only has a handful of outlet stores, introduced customized chinos online a year ago and jeans early this year. Now, custom orders make up 40% of chinos and jeans sold online. In November, Lands' End introduced made-to-order twill pants and dress shirts. This is welcome news for shoppers who spend hours in mall changing rooms, hunting for the elusive fit. Christine Hobbs, a 33-year-old database marketing manager in Costa Mesa, Calif., has always had a hard time finding pants to fit her 5-ft.-11-in. frame. It got worse after she turned 30. "As you get older, your body turns into shapes you never predicted," says Hobbs. So she was happy to pay $54 for a pair of brown chinos--$19 more than the off-the-rack equivalent. Lands' End has to charge more to cover the higher cost of making customized clothing. But the company is hoping that as the custom operation picks up steam, higher-capacity manufacturing processes will lower the cost per unit, boosting profit on the premium line. For shoppers, buying tailor-made clothing online requires a little work and an honest look in the mirror. Hobbs typed in her measurements and had to answer a series of questions about the shape of her body. Yet all this effort works to the advantage of the e-merchant. Once shoppers have laboriously created profiles at one e-merchant, they are far more likely to revisit the same site than to repeat the process with a competitor. This is leading more apparel retailers to hurry into the market. Bob's Stores, based in Meriden, Conn., is experimenting with Web kiosks in a couple of its casual-wear stores in the Northeast. Casual Male Big & Tall in Canton, Mass., also plans an online system by next year. "We think we can attract new customers who can't fit into our traditional sizes," ranging from a 44-inch waist up to 80 inches, says CEO David Levin. Financial services are naturals for customization, too. Credit-card and mortgage companies already traffic in digital information, so they can whip up loans to fit a wide range of specific risk profiles--and charge personalized prices as well. Handling costs at IndyMac Bancorp Inc., which processes 75% of its $20 billion in annual mortgage business through the Web, are less than 1% of the average mortgage, below the industry average. The advantages go beyond time and cost savings. Using the Web for the entire process provides lenders with a mother lode of data. That lets companies venture into iffy markets with their eyes wide open. Top credit-card issuer Capital One Financial Corp. (COF ) took the plunge into subprime lending in late 2001 and saw its delinquencies rise. Reading the data provided by customers who gave detailed info online to get credit cards, Capital One grasped the source of the problem and could customize higher rates and fees for riskier clients. "There's a risk-based price for almost any loan," says Richard H. Wohl, president of IndyMac's mortgage-banking group. While digital products zip through the Web, physical goods can't. But industrial companies that build products based on formulas that can be digitized are off and running. General Electric Plastics in Pittsfield, Mass., is using that advantage to reach more clients and cut costs. In 2000, the company started putting design tools on its Web site that would allow client companies to configure plastics for thousands of products. Now, about 210,000 employees at 70,000 companies use the service. David Krevor, principal engineer at aviation electronics manufacturer Rockwell Collins, turned to the GE Plastics Web site to help him with the most demanding contract he had ever faced. Last year, Rockwell redesigned a visor for the helmet of fighter pilots. The military wanted the visor to contain the targeting system that used to be located on an aircraft's windshield. The product had to be light, but sturdy enough to withstand the stresses of atmospheric pressure. If the environmental stress skewed the visor readings, a pilot could send a missile in the wrong direction. In the old days, Krevor would have started by thumbing through phone-book-thick plastics catalogs and consulting with GE techies. This time, he found the plastics he needed in an hour, rather than weeks. And he used GE's virtual lab to check how the plastic flowed before he built an expensive mold that might not have worked. "It came much closer to the initial design, because we had the time to look for the best material available," Krevor says. The upshot: Rockwell Collins cut its development time in half. GE Plastics avoids much of the back-and-forth between its technical team and customers, allowing it to reduce payroll or shift engineers to other work. It also can reach more customers faster. The company says it expects a third of the 5,000 new customer leads it picked up from the Web site this year to become steady clients. In industry and retail sales alike, victory in the mass market of one demands flexibility--and knowing when to turn away from the Web. Nike's Nikeid.com, which lets shoppers design their own athletic shoes, has concluded that consumers want to try on sneakers similar to the ones they are ordering. So early next year, Nike will roll out Web kiosks in Niketown stores and encourage shoppers to become designers. "Size needs to be exact," says Jay Wilkins, general manager for Nikeid.com. "Not being able to try it on is a challenge for Web retailers." Both cosmetics maker Reflect and Nike have had to overhaul production lines to spit out custom goods. Three-year-old Reflect created its own patented production process. It includes modular vats that can be swapped for different lotion or shampoo recipes. Nike's eight factories that make customized shoes have each gone through about a six-month rehaul. The payoff, though, can stretch beyond sales. Masterfoods USA has picked up marketing ideas and is now testing NFL team colors in some retail markets. "It's an important part of the business," says Masterfoods' Simmons. For Christmas, along with the famous "M" on its candies, it will print messages such as "HO HO HO." Want to see your name on a batch of aqua-green M&M's? It could happen. By Faith Keenan in Boston, with Stanley Holmes and Jay Greene in Seattle, and Roger O. Crockett in Chicago DECEMBER 2, 2002 SPECIAL REPORT Online Extra: Where Customization Goes Sour When it comes to food, consumers can't really specify what their taste buds are craving Anthony Youhas couldn't resist. He started answering questions on the Web -- how he felt about low-fat foods, marshmallows, and nuts. Next thing he knew, General Mills (GIS ) whipped up a custom brand of cereal just for him. For about $20, the 24-year-old software engineer from Scotts Valley, Calif. received 18 single-serving bowls of breakfast grub with his own mix of oats and nuts. Unfortunately, the packages were cute but pricey. And worse, they tasted flatter than a bowl of soggy Cheerios. "On a pure flavor basis, it was just as easy to go to the store and get a box," Youhas says. No matter how tempting customized products may sound, consumers don't always bite when it comes to buying them online. General Mills' mycereal.com, launched in 2000, lost its crunch in less than two years. Another high-profile experiment by Procter & Gamble's Millstone Coffee, called Personal Blends, dispatched its last bean in the summer of 2001. Neither generated enough revenue to keep the Web sites running. The lessons? Although the Web can be an efficient way to attract consumers, it's costly to customize products. And where tastes are involved, cyberspace often strikes out. P&G (PG ) learned that the hard way. To make a go of it, Personal Blends would have had to generate around $100 million annually, according to P&G engineer Robert Piotrowski, who helped dream up the idea. Only at that level could the company justify investing more. Meeting those numbers meant charging $10 per 12 oz. bag -- about the same as a top Starbucks Coffee (SBUX ) blend. Even then, P&G would have had to grind out and sell 10 million bags of coffee a year over the Web. That's tough when you consider that the U.S. has only 1.3 million high-income households -- the likely buyers of costly online coffee. And less than 30% of those recently visited sites with such goods as cereal and coffee, estimates Forrester Research. A MATTER OF TASTE. What went wrong? Producing customized coffee is expensive. Starbucks.com succeeds because it can use the same popular blends and premade packages it sells in stores. Millstone promised to blend java to buyer specifications and label each bag with the buyer's name. "It had whole new cost structure that couldn't be funded," says Ken Cassar, an analyst at Jupiter Research. It's also hard to define tastes in words. Consider the difference between coffee and cosmetics. As its coffee test fizzled, P&G found that Reflect.com, a site selling beauty items such as personalized lipstick and facial wash, would jell. Questions about cosmetics -- do you have dry or oily skin, a pale or dark complexion? -- are more straightforward. Food and beverages are a different matter. Despite survey questions about liking dark or semi-sweet chocolate and mild or spicy salsas, consumers "can't define their taste so clearly that asking them to personalize it online makes any sense," Cassar says. Without the consumer expertise to choose a perfectly blended coffee or bowl of cereal, Youhas says, such offerings are "nothing more than a novelty thing." They certainly don't generate enough snap, crackle, and pop to last online. By Roger O. Crockett in Chicago DECEMBER 2, 2002 SPECIAL REPORT Online Extra: WellPoint's Health Pointers The insurer is targeting the chronically ill with a new Web service to help them monitor their health Health insurers, which have jacked up premiums a fat 13% this year, are facing growing pressure from corporate customers for price relief. For this, they must find ways to cut their own costs. WellPoint Health Networks (WLP ), which has 13 million members, is looking for help from the Web. In January, WellPoint will start rolling out a series of Web sites to help chronically ill patients manage their health. Executives at the nation's largest operator of Blue Cross plans won't say how much they're spending. But they estimate that for every dollar they invest in disease management, they'll save twice as much in medical costs. "Making patients just a little healthier results in fewer claims for us," says Dr. Peter Juhn, WellPoint's vice-president for health-improvement resources. WellPoint is starting with heart disease. It figures that 3% of its members, or 390,000 people, suffer from coronary illness. WellPoint believes it can save $7,000 for each heart patient it keeps out of the emergency room. The plan is to focus first on the sickest among them, a group of 78,000. The company has started collecting data on diagnoses, hospital admissions, and prescriptions. PRIVACY CONCERNS. The sickest patients will be eligible to receive WellPoint's "Love Your Heart" service. Here, users will have access to personal sites where they can track their weight, blood pressure, and other heart-attack triggers. They'll set goals, such as weight loss, and record their progress. A WellPoint nurse will be assigned to each patient, posting messages with health tips and answering questions over the phone. Challenges? Plenty, starting with privacy. One federal regulation prevents insurers from marketing disease-specific information directly to patients who have those conditions. WellPoint is devising alternatives, such as vaguely worded letters inviting members to visit sites that can help them "improve their health." Another concern is that many heart patients, who tend to be older, are not yet online. WellPoint will back up the Web service with a phone-based version. And it will be targeting younger audiences with its new asthma and diabetes Web services coming out later in the year. By Arlene Weintraub in Los Angeles