Why data is the future of customization

This article was originally published on August 31st, 2017 at Fashion & Mash

Netflix has 76,897 unique ways to describe types of movies. By breaking down every single attribute describing film and television content — narrative elements, moral aspect of characters, romance quality, scariness — it came up with custom genres that are specific to the point of ludicrous. By mixing all those micro-genres with millions of users’ viewing habits, Netflix successfully created popular television shows.

Fashion and beauty industries took cue, and in recent years we have seen a surge of customised, data-led services like Stitch Fix, Kid Box, Birchbox or Function of Beauty. They promote micro- and human-centred approaches to product manufacturing, design, merchandising and customer care.

Netflix succeeded because it put its custom genres at the centre of its content universe. Fashion and beauty brands will succeed when they put their customers at the centre of their designs.

Much to the chagrin of the traditional fashion establishment, used to revering the flashes of creative inspiration and mysteries of the creative process, the future of fashion and beauty seems to be in the hybrid model that mixes artificial intelligence, data and aesthetic inspiration to create custom-made items.

Yet, while the technology behind it may be new, customisation as a future-facing business strategy is as old as the industry. Legacy fashion and beauty brands built their brands around made-to-order, impeccably tailored and on-demand products. People went to these brands because they knew they would get a superior-quality item that was made just for them. Bespoke products are the very definition of luxury in comparison to premium and mass.

It’s not hard to see why customisation may become a go-to strategy for fashion and beauty players again therefore. Younger affluent consumers increasingly turn to quality and craftsmanship in their quest for products that reflect their personal preferences and are an antidote to fast-fashion. It’s about buying less, but better.

“More than 45% of those aged 13–34 have bought a personalised product before, while 85% like when brands offer the option to personalise products and services, according to a March 2017 report from youth marketing research firm YPulse,” writes Lauren Sherman.

In practice, customisation is costly. Its successful implementation asks for the transformation of the entire vertically integrated value chain of legacy companies. Today, this value chain is built for efficiency in producing and distributing as many identical items as possible. Despite the consumer demand and the obvious benefits of customisation (a better alignment of supply and demand, higher customer satisfaction, less inventory on hold), there are few legacy companies who opt in for customisation, and that do it successfully.

It is not surprising then that the best examples of customisation come from the up-and-coming brands. They are the closest to their customers, and they have a vast amount of qualitative and quantitative data about their customers’ preferences, choices and behavioural patterns.

Function of Beauty is a beauty start-up that creates personalised shampoos and conditioners based on users’ hair properties and their #hairgoals, for instance. They mix the ingredients based on this information, under a simple mission of creating products that are built for a single person’s hair. Function of Beauty’s algorithm offers up a whopping 12 billion custom combinations.

Customisation as the original fashion and beauty strategy has recently been put on steroids by technology, and we can expect that this AI- and data-fuelled trend is only going to continue. Modern brands are able to deliver handcrafted, made-to-order items at speed and with customer knowledge unseen before. Data-driven customisation is like a flashlight in a candle factory, and is hard to beat.

In the past, high-end fashion and beauty houses grew by amassing scale. Today, this sort of growth is unsustainable, with saturation of emerging markets and pressures on the industry to become more socially and environmentally responsible. This means that fashion and beauty needs to find another way to scale. With the internet encouraging networks of niches and individuals with unique tastes and needs, customisation may as well be an answer.