The latest proof that Nike pushes the marketing envelope is in Times Square, where the company has bought a billboard inviting consumers with cell phones to call in and pick out colors and the parts to build their own shoes. After the shoe takes form (in real time) on the sign some 20 stories above the square, the new design is sent as an SMS photo to the creator’s cell phone with details on how to buy it.

The promotion reflects Nike’s progressive marketing thinking. But, more than that, it demonstrates that the brand has tapped into, and put a big push behind, what experts are calling the customization economy.

From Nike’s personalized shoes to Dell’s build-to-order computers to Jones Soda’s personalized photo labels, savvy marketers in nearly every sector are empowering consumers to design their own products, packaging and, essentially, their own experiences with brands.

According to Yankelovich Partners, a marketing research firm, it’s a practice that can re-engage consumers who have been turned off by the glut of aggressive, blanket marketing practices that dominate today.

“Consumers are changing what they’re demanding from marketers,” says Yankelovich president J. Walker Smith. Whether it’s an offshoot of the current media fragmentation or the Internet’s on-demand culture, he says, people want to be more in control to create their own environment.

“They want marketing to be more participatory and personal,” he explains. And customization, he says, is one marketing tactic that can make consumers more receptive to a brand.

Ask Jones Soda. The brand has catapulted into a $30 million beverage company on the simple concept of customizing soda labels with photos submitted by its customers.

The brand took that practice a step further in 1999 with its myJones personalized label service that offers the ultimate marketing to one. Customers visit www.myjones.com to order custom 12-packs of soda with personal photo labels for $34.95 (Canadian brewer Labatt makes a similar personalized label offer with 24 bottles of Labatt Blue going for CDN $58.95.)

According to Jennifer Cue, COO of Jones, a 2002 patent was secured for myJones, which works on a digital printing program developed with the company’s label supplier. “We’ve got it down to a science,” she says. “It’s not something that significantly adds to our costs.”

Digital printing is also playing a role in recent customized offers by retailers like Walmart.com, who announced a personalized CD program for online customers in late April.

Consumers go to the company’s web site and pick songs to be downloaded onto a CD from a catalogue of more than 400,000 choices. From there, they choose from a selection of 12 cover images and tailor the CD sleeve with copy printed on the package along with the unique track list.

According to Amy Colella, manager of corporate communications for the online retailer, the personalization service is essentially a consumer-generated program. She says it resulted directly from the strong performance of physical CD sales on Walmart.com.

“We knew there was an opportunity to provide personalization and customization for customers,” she says. “We are still in the early stages, but response has been relatively strong to date.”

Another brand to announce a similar effort is LEGO, with an August 2005 launch pending for www.legofactory.com. Here, kids can build their own digitally created models and then name their set and submit personal photos to customize the package.

Customization is also a smart strategy for brands looking to reach smaller and smaller (but highly desirable) audiences. Jones Soda has worked with a range of companies—from Pixar and Nintendo to Starbucks and the Panera Bread Company—to more effectively segment their consumer marketing efforts.

Most recently, the brand reached an agreement with Michigan State University to create a customized bottle series featuring Sparty, the school mascot. Some 30,000 bottles of green apple and cream soda flavors, which reflect the green and white colors of the school, were dressed with photos of Sparty and sold in and around the MSU campus with a portion of proceeds benefiting the school’s alumni foundation.

Jones is not alone in customizing its packaging for desirable niches.  Coca-Cola Brazil recently introduced limited-edition contour glass bottles of Coca-Cola Light for attendees at the high-profile Fashion Week in Sao Paulo.

Wrapped in a full-body shrink sleeve label, by Sleever International, the bottles were digitally printed and tailored for the event with colorful fashion-forward graphics and targeted copy that read “Official Beverage of Sao Paolo Fashion Week”.

Printers and other suppliers have been preaching the benefits of customization in recent years, as digital printing technologies have made headway into the packaging realm. Whether brands lead the personalization process or whether they turn the reigns over to consumers, they say, the marketing opportunities presented by digitally printed custom packaging are tremendous.

“It’s one way for big companies to keep their finger on the pulse of the consumer,” says Bob Scherer, vice president of CL&D Digital, a fast package and label printer in Delafield, Wisc.

He says that by closely watching the choices customers make in the customization process, or by monitoring their reaction to custom packaging in a test marketing phase, a brand can identify developing trends and use that info to market other sides of its business.

“It’s like holding an ongoing focus group,” he says.

It’s a benefit Scherer saw first-hand in his work with Reflect.com. Backed by Procter & Gamble, the online health and beauty retailer allows consumers to build their own beauty products and customize the labels and packaging to house them.

Scherer worked with Reflect.com to develop and manage a digital process that could accommodate unique products and label sizes; lipstick labels for the online retailer are a half-inch in diameter, while the conditioner labels are two inches across. It was also important to develop processes to manage data flow from the web site to the point where labels are cut and laminated on through to the time when the product and package go out the door. Scherer even worked with the company when, after four years, it wanted to bring the digital custom packaging process in house.

And while companies like Reflect.com have had much success with personalized offerings (according to Hoover’s, the retailer has sold 10 million+ customized products since its 1999 launch), Scherer says many brand owners have yet to fully embrace the potential of digital custom packaging.

Scherer says that, since digital printing has only recently been introduced into the packaging realm, sometimes it’s the perception of risk that holds a brand back. In other instances, he says, it’s a lack of time or a lack of understanding on how to manage the process that keeps companies from taking full advantage. But the biggest misconception marketers have, according to Scherer, is when they only look at the increased costs (compared to traditional printing technologies) and don’t consider usage.

Take a company that paid five cents for each of 100,000 of conventionally printed labels. Scherer makes the case that if a brand only uses half of the labels, its actual cost becomes a dime each. “And, now,” he says, “they have a warehouse full of labels to manage.”

With digital printing, he explains, you get what you need when you need it. And, you get it fast.

Beyond consumer-created packaging, customization can also be valuable for sales samples, for test-marketing, for packaging prototypes displayed at a trade show; and even for packaging that is printed in small runs and tailored for different geographic markets. The market for customized packaging geared to bilingual audiences is also expected to grow.

According to “The Future of Digital Printing for Packaging,” a primary research report by Pira International (available through www.piranet.com), global branding and distribution demands will require packaging in different languages and different text in greater numbers in the years to come. The report projects that by 2008, 11 percent of such packaging will be customized and that, by 2012, the figure will jump to 23 percent.

The Pira survey of end users and suppliers revealed that 98 percent of respondents believed the overall market for digital printing for packaging would grow over the next five years. Surely, as the marketing concept of customization matures, digital printing will take greater hold in helping brand owners deliver custom versions of their packages to profitable niches.

But there will be challenges. According to Barbara Kahn, director of The Wharton School’s undergraduate division at the University of Pennsylvania, among the biggest challenges will be in creating customized packaging that holds value for an individual without driving up the costs for a brand. The key, says Kahn, is in standardizing what you can and only customizing what the consumer says is valuable.

It’s also a strategy that will help brand owners find a balance where their offer doesn’t overwhelm the consumer with too many choices, she says. “The goal for the marketer is to present variety in such a way that it creates value, not confusion.”  BP 

Personalized soda labels. At Jones Soda, visit www.myjones.com or call 800.656.6050.

Custom shrink sleeves. At Sleever International, contact Marina André at marina.andre@sleever.com.

Marketing research and consulting. At Yankelovich Partners, contact J.Walker Smith at 404.808.5057 or jwsmith@yankelovich.com.

Fast package and label printing. At CL&D Digital contact Bob Scherer at 800.777.1114 or bscherer@clddigital.com.

Primary research on digital printing for packaging. At Pira International, contact Stephen Hill at +44 (0) 1372 80205 or stephenh@pira.co.uk.

You’re moving from making a million of one product, to making a million individualized products and developing a closer relationship with each buyer. Along the way you will learn consumer preferences that may allow you to mass-customize, but this takes time. Your mindset has to be on long-term growth and gaining customers for life.

Be prepared. To be sure you can handle the volume and ship out orders quickly, do a test run of your data flow process. Don’t underestimate the level of interest in your product—it might take off better than you expect.

Send a sample test file and furnish color targets and sample packages or containers to your digital printer—and request a proof just as you would in conventional printing. The only difference? Instead of sending over a static file to print thousands of the same packaging, you’ll need a template where individual names will be dropped in.

“What we’ve learned about our customers is unbelievable,” is what surprisingly large, well-known companies that regularly customize products are saying. Take custom-blended coffee for “John Smith,” for example. The company now knows his preference on aroma, flavor and color because he has provided answers to a series of in-depth questions on its web site. With this feedback, you might learn that not only John—but also a good majority of the Southwest—prefers his coffee dark, bitter and with a strong aroma. 1) You’ve gotten closer to your customer, and 2) you can move to mass customization. And as a consumer of a product that was made just for you, why wouldn’t you keep coming back? That’s the ultimate way to build products to meet the needs of your customer—and keep them for life.

Bob Scherer is vice president and partner at CL&D Digital, a fast package and label printer in Delafield, Wisc. He can be reached at 800.777.1114 or bscherer@clddigital.com.

In recent years, Coca-Cola Belgium has been introducing a series of custom Coke Light cans featuring the art of some of the country’s most promising artists. The customized packaging effort supports Coca-Cola’s “think local, act local” marketing strategy and serves as a platform to broaden awareness of the country’s thriving domestic art scene.

The most recent incarnation of the promotion is a series of seven limited-edition “Seduction” photography cans, which featured shrink sleeve labels with images created by emerging Belgian photographers. Last October, the cans were distributed at large cultural events and institutions throughout Belgium and Luxembourg.

According to the company, the customized packaging represents a technological innovation in the beverage sector, with the high-quality “Seduction” photo labels standing as the first to ever be placed on a can.

Since then, the company has taken the customization concept public, inviting consumers to submit their own photos through the web site www.seduction.be/lu in a contest that will award the winner with their very own personalized photography cans.