Have it Your Way: Mass Customization is the Future of Consumer Markets

Being a restaurant owner is a tough gig. There is a lot of competition out there, as Census data from 2010 indicates that one out of every fourteen businesses in the United States is a restaurant. Plus,  the failure rate is quite high – about 30% of restaurants fail in the first year and 60% fail by year three.

So how does a current or future restaurant owner avoid becoming just another statistic? One way is to take advantage of trends in the marketplace. If a restaurant can take advantage of a change in the social, technological, economic or regulatory environment, it has a much better chance of being successful.

Take Chipotle. It became a huge success by tapping into a trend known as customization. The thing people love about Chipotle is the ability to customize your food exactly how you want it. Chipotle’s customers feel like their food was made just for them.

Given their success, it is no surprise that Chipotle has inspired a host of other restaurants that offer similar levels of customization. Just blocks from campus,  Pieology offers custom pizzas. You pick the dough, the sauce, the cheese, and the toppings. Then your pizza goes into an oven and is cooked to perfection in a matter of minutes. Millions of Milkshakes in Hollywood allows customers to pick from a long list of toppings to create their own customized milkshake. Tava Indian Kitchen is offering customized Indian food – roti wraps, rice bowls and salads – in the San Francisco Bay Area. And at How do you roll? in Marina Del Rey you can fully customize your own sushi rolls.

While these restaurants essentially emulate the Chipotle model and apply it to a different cuisine, there are other ways restaurants can tap into the customization trend. For example, Room Forty aims to deliver the experience of a fine restaurant, but at the location of your choice. They brand themselves as “a restaurant without walls.” They are caterer, but not in the traditional sense. Rather than having their customers choose from a pre-set menu, they tailor their menu to fit the needs of their customers. This menu includes both food and drink. For those of us who do not need a caterer, but still want to have an extraordinary dining experience , Room Forty regularly host “pop-ups.” They transform a venue to create a “pop-up” restaurant where patrons can have a memorable dining experience. Check out pictures from their most recent pop-up at The Last Bookstore in Los Angeles here.

For those of you who currently own or are interested in starting a restaurant, it is probably in your interest to figure out how to leverage the trend of increased customization. A simple way to do so is to take the Chipotle model and apply it to another cuisine. But as Room Forty has shown us, leveraging this customization trend can be done in other ways too.

And for those of you who just love to eat, if you’re on a student budget, visit Chipotle, Pieology, Million Dollar Milkshakes and How do you roll? But once you hit the big time, check out one of the Room Forty “pop-ups.”

Guest blogger Atul Teckchandani, assistant professor of management at Mihaylo, teaches courses in entrepreneurship, provides student advising and is involved with the Center for Entrepreneurship. His research examines how different types of organizations in a community collectively affect economic outcomes and entrepreneurial activity. You can follow him on Twitter @atulteck.

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2 Responses to Have it Your Way: Mass Customization is the Future of Consumer Markets

  1. Ravi Shanmugam says:

    Mass customization is definitely a trend in the restaurant biz. I just don’t think it’s a good one, and I hope it’s one some restaurant owners will resist.

    Especially at the “fast-casual” service/price point, you’re right that there are a bunch of places trying this. Three chains that come to mind are The Counter (burgers), Which Wich (sandwiches), and Freebirds (burritos). Each is growing like crazy. One of them, Which Wich, has a location across the street from your campus in Fullerton. Two of them have an ordering process involving checking off boxes on a checklist, while Freebirds has an employee actually lead the consumer through the process….because who wouldn’t want their own burrito concierge?

    Sounds nice, right? Except it’s not. None of them are particularly good, which should come as no surprise. It’s one thing for a restaurant to make just a few things and make them very well (and if high turnover ensures fresh ingredients, that’s a bonus). But when the menu gets big and creates the need to stock a war chest of ingredients, it’s inevitable that most restaurants (which struggle to get by as it is) will cut corners on ingredient quality or preparation. High-end operations like Room Forty or certain restaurants with custom tasting menus don’t have this issue, but below that level, it’s another story.

    Ultimately, they’re just giving the customer what they want, as the “customer empowerment through customization” movement keeps growing. Customers are getting so used to being able to pick and choose that they demand it even from places that don’t offer it. A friend of mine who runs a Mexican fast-casual restaurant on the east coast told me it’s getting harder to convince his customers to order off the menu, and that some customers even invent bizarre “food allergies” to force substitutions.

    I can understand asking to have one ingredient left off or on the side, but making a hostage-negotiator-style list of demands? At what point should we say “you really should just make it yourself at home”? Isn’t part of eating out, even at less fancy places, about having faith in the restaurant’s or chef’s judgment about the best recipe for a dish or menu item? And if an increasing number of restaurants continue to encourage picky diners, are we headed towards a future of universal restaurant mediocrity? (in which every place cries out, “Don’t go anywhere! We’ll make exactly what you want, just stay here!”)

    My favorite restaurants at all price levels almost always have short menus, so I’m a little biased. But I’d like to see the customization trend at least slow down a bit.

  2. Atul Teckchandani says:

    Ravi, you raise some excellent points. I agree that too much customization can hurt quality and limits the chef’s creativity. And I worry about its longer-term effects on the culinary experience. This is something I think about quite frequently because, as a father of young kids, I like being able to go someplace and get exactly what my kids want. But, I also want them to be able to try new things and appreciate new foods.

    When I saw the owner of Room Forty speak, he said that his chefs loved the pop-ups because they were able to be more creative than they ever could be with a catering client. But, as you mentioned, high-end restaurants aren’t struggling with this customization trend as much as the more affordable eateries.

    I guess it’s a bit of a philosophical debate about the value of new experiences. What happens if we always get exactly what we want and never experience anything new?

    But in the end, business owners are likely to bow to the will of the customer if they want to stick around.

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