You are probably familiar with the following situation. You ordered a pair of pants online, and when we the product is delivered, it is too big. Or you see an interesting shirt in a shop, but the sizes which are available are too small for you. Or more specific, you like the jacket you see, but the buttons attached have a weird colour. Mass production in the clothing industry resulted in a lot of different clothes in a few standard clothing sizes. We as customers are dependent on designers which work for specific brands, and we must hope that our size is available when we see something we like. And yes, there are places where you can get tailor made clothes. However, this is expensive.
To deal with these problems, a company called “Shirt By Hand” offers custom made shirts. For the same price as you buy shirts in a regular shop. To do so, they involve active consumer participation. Here is how it works.
The ordering process contains of a few steps. The first one is to make an appointment with one of their employees. They will come to your house or office to measure al your sizes. They will create an account for you, so your sizes are saved. During this meeting, they bring a selection of their shirt fabrics with them, to give you an idea. When they leave your house, you can order shirts online. In the web shop, you choose every aspect of a shirt yourself. Even the thread is your choice.
By doing this, you become part of the value creation process. You will choose how you want each attribute to be which you can understand. And you do not have to worry about the attributes you don’t know about. Hereby, this company can give you as a customer a parameter-based interface without frustrating you to customize attributes you don’t know (Randal et al., 2005).
The joint profitability of this business model is as follows. For customers, this business model means that the product they want, a shirt, is tailored to their needs and size. Also, by designing products yourself the feelings of accomplishment increase (Franke et al., 2010). You are the one who thought about every combination of the attributes, and not a designer who you don’t know. And beside this, it is fun to design your own clothes. The costs for consumers are longer waiting times. To be able to produce the shirts for an affordable price, they are made offshore. A three-weeks delivery time is the standard.
For the company, there are benefits as well. Because consumer design their clothes online, the company doesn’t need a physical store. Cutting their costs and hereby increasing their profits. Also, this company is not dependent on designers to design clothes, customers are creating this value by doing it themselves. Another upside to their business model is the fact that their employees have to go to the customers only a few times, when the customers need to be registered, and when their sizes changed dramatically. And not with every single purchase. Their costs are the investments in machines with very low switching costs, enabling them to produce different shirts, every single time.
Quite an interesting business model. You can create the shirt you want, design and choose all the attributes to your preferences, and get it in the right size. And it is not even expensive.
Franke, N., Schreier, M. and Kaiser, U. (2010). The “I designed it myself” effect in mass customization. Management Science, 56(1), pp.125-140.
Randall, T., Terwiesch, C., & Ulrich, K.T. (2005). Principles for user design of customized products. California Management Review, 47(4), 68.