Custom Everything (The Slow, Painful Death of Mass-Market Goods)

In the early part of the 20th century, three industries – mass manufacturing, mass distribution, and mass communications – completely reshaped consumer behavior. The transition from artisanal goods to modern mass production is the stuff of legend. I remember being awestruck when I toured a Coca-Cola bottling plant with my sixth-grade class. The manager was very proud of the fact that the company could produce tens of thousands of identical-looking, identical-tasting bottles of Coke per day. In practice, every mass-manufacturing facility evolved into a marvel of logistics and productivity. The value creation was immense.

The Mass Market’s Dark Secret

As amazing (and profitable) as this was, there were some significant compromises made. By definition, every product designed for mass distribution had to be desired and purchased by the largest possible number of people. I am stating the obvious, but follow the logic. If you’re going to produce about 2 million cases of widgets every day, people had better buy about 2 million cases of your widgets every day.

The way this is accomplished may surprise you. The “best” products do not necessarily become the most popular. In fact, they rarely do. The product that appeals to the largest possible number of people (the least common denominator) is almost always the winner. In the TV business, seasoned professionals will tell you that the most popular shows are the ones that the least number of viewers turn off. While it’s true that the most popular show will have the highest number of viewers, that is because it is the show least likely to make someone switch the channel.

This subtle semantic difference is not trivial. In order to have the least number of people tune out, you have to offend the lowest number of people (G-Rated), you have to tell stories that everyone can understand (sitcom, procedural police, or hospital drama), you have to use characters that are easily recognizable (protagonist and antagonist), etc. In the end, you take a tried-and-true, mass-market formula, tweak it slightly (and I do mean slightly), and voila! You have a hit. (Quick reality check: Hits are magic! It’s super hard to get all of the components right, but when you do, the criteria stated above are met.)

This is the gospel truth of all mass-market goods and services. There’s always something you wish it did, or want to add, or need to modify (that’s why there are aftermarkets). But you purchased the mass-market product because it was relatively inexpensive and basically good enough for your purposes. If you had some money to burn, there was always a better custom version that was harder to get and cost a bit more. That was then.

Reshaping Consumer Behavior

Today, “consistent quality you can trust” is a solution in search of a problem. Everything, whether mass manufactured or “made with loving hands at home,” can be produced at a quality level equal to the market’s needs.

Which brings us to the slow, painful death of mass-market goods. Mobility, consumer expectations, and technology are evolving exponentially, and there is huge appetite for low-friction user experiences, on-demand delivery, and personalized manufacturing. These are the technologies that are completely reshaping this century’s consumer behavior.

Custom manufactured goods are cool, don’t cost much more (in some cases are much cheaper, actually), and provide an experience that matches consumer expectations. Unfortunately, customized or personalized goods are not what multinational conglomerates tend to manufacture. Almost every big manufacturer still does its level best to make millions of identical, least-common-denominator goods daily. In fact, most of our clients are doing everything they know how to do to sell more of what they are already selling.

Reading the Peanut Butter

About a month ago, I went looking for organic all-natural peanut butter. No sugar added, no preservatives, no additives, nothing but pure peanuts ground into a delicious, buttery paste. My trip to the supermarket was instructive. First I saw brands from my childhood with labels that said “all natural” on them. I got very excited because I trusted those brands as a kid, but then I realized the reason I was looking for organic all-natural peanut butter was because I didn’t want all the stuff that Big Food puts in peanut butter. A quick scan of the label confirmed my worst fears. Yes, the front label said “all natural,” but the nutrition facts listed the ingredients and the preservatives, and revealed it was actually higher in carbs and 10 calories more per serving because of the added sugar.

There were about a dozen different brands to choose from. I was on a mission, so I decided to read them all (front and back). In the end, I walked away with a jar of organic all-natural peanut butter from a brand I’d never heard of that met my expectations. (BTW, I scanned the barcode into my nutrition app before I made my decision, just to be sure.)

Fast-forward to last week. I was on Amazon looking for a USB-C cable (my cat loves to chew them and it dramatically impacts the cables; I’m not sure what it does to the cat), and just for fun, I searched for “organic all-natural peanut butter.” You know how this story ends. There were dozens of choices (sortable and filterable by price, relevance, best-selling, etc.) with verified reviews, tons of product information, and 2-hour free shipping available to my apartment. Do you want to guess where I placed my organic all-natural peanut butter subscription?

I haven’t told you the name of the peanut butter company because I’m not shilling for them, but the company offers custom formulations, other nut butters, and an astounding assortment of high-fat, super-low-carb options. You get the point. I will never even consider purchasing mass-produced peanut butter again. There’s absolutely no reason to. In fact, as long as Amazon continues its subscription service, I’ll never have to shop for organic all-natural peanut butter again. (Just writing the previous sentence makes me feel good.)

Are Consumers There Yet?

Consumers can’t possibly adopt a preference for custom or personalized manufactured goods and services in big enough quantities to upset mass manufacturing and distribution … can they?

All things being equal, I would posit that Big Manufacturing could figure out how to deal with Small Manufacturing. My Big Marketing friends would have little trouble annihilating Small Marketing, and Big Supply Chain would have very little trouble adapting to (and crushing) Small Supply Chain – the logistics business is properly scaled and easily accessible by everyone. But all things are not equal.

Television Ratings

Back in the day, the ability to manufacture thousands of cases of identically packaged, quality controlled consumer goods was an engineering wonder. The ability to distribute them nationwide in a timely fashion was a great enabler, but it wasn’t until the addition of mass communication (national radio and television networks) that marketers were able to create demand and drive consumption at a mass scale. This tri-lateral ecosystem worked perfectly for over 65 years. That was then.

Today, other than during a few tentpole television events, TV ratings are down to the point that a national brand could spend $500 million on airtime and only reach 20 percent of its target audience. Worse still, heavy TV viewers (who have aged out of the coveted 18-to-49 demo) would see the message dozens of times and light TV viewers (the target audience) might not see it enough times to create demand or drive consumption. Google and Facebook offer excellent transactional advertising tools, and Amazon can sell anything you’ll let them sell. But as of this writing, there is no new medium that can deliver mass-market scale anywhere near the effectiveness of television even 5 or 10 years ago (forget about the ’80s and ’90s). With no replacement in sight, creating demand and driving consumption at a mass scale have never been harder or more expensive.

What Happens Now?

The short answer is, we evolve. Some big corporations will be able to adapt; others won’t. Entrepreneurs will keep entering various businesses with pitches like Warby Parker or Zenni, or Harry’s or Dollar Shave Club, or Casper or Tuft & Needle or StitchFix, UNTUCKit or Allbirds. Then they will be disrupted by totally custom micro-manufacturers and distributors who master frictionless, just in time, on demand, personalized, custom goods and services.

As with all gazes into my crystal ball, the nightmare I just conjured up is only a probable future. No one knows how this will play out. But a cadre of super-tech-oriented startups has seriously disrupted every market where the founder could look into a camera and say: “Hi, I’m _____ the founder of _____. I used to have to buy _____, but it was too expensive and I hated the experience. So I founded _____, etc.”

The tech is democratized, manufacturing is democratized, distribution is democratized (many startups sell directly to consumers). The marketing can be super-targeted, social based, or even paper flyers on telephone poles because businesses are not going to try to make (or sell) 2 million cases per day. Over the next few years, I expect to see an explosion of startups and new business units trying to fill every gap and inefficiency in every market. I’m excited. This is a paradigm shift that I, as a consumer, am going to love!

Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.

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About Shelly Palmer

Named LinkedIn’s #1 Voice in Technology for 2017, Shelly Palmer is CEO of The Palmer Group, a strategic advisory, technology solutions and business development practice focused at the nexus of media and marketing with a special emphasis on machine learning and data-driven decision-making. He is Fox 5 New York's on-air tech and digital media expert, writes a weekly column for AdAge,and is a regular commentator on CNBC and CNN. Follow @shellypalmer or visit shellypalmer.com or subscribe to our daily email https://ow.ly/WsHcb