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Personalized Product Configurations for Limitless Possibilities

The ability to offer personalized product configurations allows businesses to provide customers with a limitless range of product options. However, this can also lead to an explosion in the number of SKUs needed to support the extended assortment, creating a challenge for businesses that need to scale their operations. Further exacerbating the issue are concerns around the management of product components and their final products - suppliers, inventory, cost, price, promotions, etc.

There are a variety of techniques to help retailers navigate this all-too-common problem, some include:

  • SaaS-based Product Configurators can allow businesses to offer dynamic product personalization, allowing customers to customize their products with the features and options they desire. These tools accelerate product configuration explosions, reduce maintenance, minimize demand on legacy systems, and help businesses stand out in a competitive market and maximize customer experience.

  • Delayed SKU creation can help businesses manage the scaling demands of personalized products and potentially overcome limitations of existing enterprise solutions. By delaying SKU creation until the product is ordered, businesses can ensure that they are not overproducing and can better manage their inventory as well as legacy system scaling demands.

  • Businesses must align on an approach to the inventory, cost, and pricing implications of personalized products. How will the cost component products and final products be tracked and attributed?  What product is the final sale realized against?  Where will the margin be realized? How will order fulfillment be determined?

  • Align internal teams on the goals & objectives to understand the totality of scope required to deliver.  This often requires involvement from IT, Digital, Merchandising, Buying, Stores, Finance, and Inventory teams to ensure the end-to-end solution is holistic.  Secondarily, alignment must be had on what scope is necessary to deliver a minimum viable product (MVP) that validates assumptions made designing the platforms and customer experiences.

Personalization is here to stay, and customers are becoming accustomed to the flexibility, tackling these solutions will position retailers to make the most of their resources and empower these experiences.  Opportunity does not end there; further refinement can be achieved via the use of AI-driven personalization.  This could take the form of assortment determination (what combination of what components to make what final products) or to drive customer targeting based on preferences and history – just to name a few.

Retailers can also capitalize on the extended (nearly limitless) assortment by expanding their sales channels to include 3rd party marketplaces. This decision is one that must be aligned to the broad strategic objectives of each retailer’s leadership but one that could allow deep saturation and penetration of brand, identity, and product across critical customer digital channels.

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