Megatrend individualization: effects on products in B2C and B2B

Picture of Patrick Müller

Patrick Müller

June 21, 2017

Individual needs and social trends develop independently of technology and engineering. Mobility, for example, has increased dramatically in recent decades. We refer to such changes as megatrends. One criterion that characterizes such megatrends is that they are does not have to "predict"They are already here and mark changes that have been shaping us for a long time and will continue to do so for a long time to come. They also span several decades and have an impact on all people and all levels of society. Furthermore, they are independent of technologies and technological trends.

Components of the individualization megatrend

Individuals can and must make more and more life decisions autonomously and act independently, for example with regard to partnership, career, education and place of residence. People are looking for an individual style, follow individual life paths and have an individual digital identity. They use self-tracking, buy products that are individually tailored to them and use personalized services. They even create complex products on their own, for example using components from the internet and 3D printing. They obtain the knowledge for this from tutorial learning and the Internet, not from school and books.

Mass customization

In the following, the main focus is on mass customization. The target sales market is not the differentiated market, but the mass market. Here, a further level of individualization is to be achieved by varying a few - but from the customer's point of view decisive - features of the product.

Before the advent of industrial mass production, many products could be customized without additional process costs. After that, for a long time there were only off-the-peg products or very expensive custom-made products.

With the possibilities of modern industrial software, companies are managing to include more and more variants and options in their product range. Today, many products are offered as variant-rich series products where the customer can choose from a wide range of options.

The most vivid examples include cars, bicycles and computers. Customers use Internet configurators in which they can select their preferred model and add equipment. In most cases, they use an integrated graphic configurator that graphically visualizes every desired change to the product.

Numerous vehicles lined up in a parking lot or fleet in a car dealership
Individualization in the automotive sector: configuring a vehicle according to the customer's wishes opens up numerous possibilities. (Image: © scharfsinn86 | Adobe Stock)

Individualization and a wealth of variants in B2B

This wealth of variants - and individualization even more so - does not stop at a product manufacturer's incoming goods department. A car seat that the customer can configure for their car can no longer be ordered using predefined variants and their part numbers due to the diversity of variants. Even automotive suppliers, who are less dependent on special equipment and produce even larger quantities of a product, are feeling the effects of the manufacturers' diversity of variants. For example, a manufacturer of turbochargers such as BorgWarner has to produce its products in many more variants than 15 years ago due to the numerous model variants with different engine versions.

Individualized systems

If you now look from the complex product to the very simple products, you might think that the limits of individualization have been reached here, because a screw cannot be individualized. However, there are suppliers like Würthwho provide their customers with individualized systems that reorder these screws independently. This service is not product sales, but the reliable, customized provision of the required products without the customer having to make any significant effort.

Other systems use IoT features to provide individualized services. Wireless cordless screwdriver from Rexroth knowledge via a connection to a central computer and location informationThe system can detect the torque with which a screw needs to be tightened and document this. Major agricultural equipment manufacturers such as Agco, John Deere and Class are also in the process of creating new services and completely new business models with the help of IoT and big data. The combination of weather data, drone images and GPS data is to be used to minimizes the travel distances of the tractors and fertilizer use can be optimized.

Smart Farming app on smartphone, a plantation area in the background
Smart Farming 4.0 solutions help to leverage optimization potential. (Image: © Andrey Popov | Adobe Stock)

Fulfillment of individual wishes

The first real customizations for many products were initially in the area of color. For example, a Rolls-Royce or a tractor can be ordered in an individual color. Rolls-Royce has even already been Diamond dust in the paint added. This may still seem a little eccentric to us, but there are also examples that make sense for everyone.

Customization has a real benefit for customers, for example in the geometry, which is adapted to their body. Some companies only carry out this individualization on site in the store, for example in the case of ski boots. In this case, the product in stock must be designed in such a way that it can be customized later. With a bicycle, on the other hand, whose frame is produced using 3D printing, individualization begins with measuring the customer before production and requires completely new production processes.

Individualization: opportunity or risk?

Summarizing these observations, the central question arises: Is the megatrend of individualization a risk, a challenge or an opportunity?

This all applies to most companies. Individualization opens up new business potential through new business models or the expansion of existing models. At the same time, it poses a threat to those companies that are unable to adapt to the trend at the required speed or at all.

We support clients in identifying the megatrends relevant to them and creating company-specific trend maps.

In the second part of the article, we will look at the skills required in engineering to meet the challenges of individualization and, in particular, mass customization.

(Cover image: © Egor | Adobe Stock)

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Picture of Patrick Müller

Patrick Müller

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