On Demand Business Models Explained - Custom Gateway
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On Demand Business
Models Explained
An exploration of the different business models
and products made possible by adopting an
on demand fulfilment strategy
August 2019
Andrew Talbot
@customgateway
custom-gateway.com
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On Demand Business Models Explained Page 1 of 65
Contents Introduction 4 What Are On Demand Products? 4 On Demand Content Types 5 What is An On Demand Fulfilment Strategy? 6 What Makes On Demand Possible? 6 What is the Difference Between On Demand & Dropship Products? 6 Truly A Global Marketplace 7 Increased Profit Margins for On Demand 7 Photo & Personalised Gift Market Size 8 Photo Gifts 10 Photo Books 11 Prints & Enlargements 11 Wall Art 11 Home Decor 12 Other Gifts 12 Personalised Gifts 13 Flowers 14 Greetings Cards & Invitations 15 Licensed Personalised Products 15 General Personalised Gifts 16 Personalised Hampers & Alcohol 17 Subscriptions 17 Personalised Packaging, Gift Wrap & Gift Boxes 17 Personalised Books & Newspapers 18 Gift Cards & Experiences 19 Personalise Anything 21 Made To Order 22 Made to Measure 23 Home Decor 24 Incentives, Trophies & Rewards 26 Instore Personalisation 28 Instore Printing 28 Dropship Fulfilment 28 Click & Collect 29 Souvenirs 31 Green Screen Experiences 31 Print On Demand for Smaller Attractions 31 Instant Photo Gifts 31 __________________________________________________________________________________________________________ On Demand Business Models Explained Page 2 of 65
Personalised Souvenirs 32 Event & School Photography 32 Customised Services 33 Fundraising 34 Monetising Your Assets 35 Promotional Merchandise 36 Corporate Programmes Based on Stock 36 One Off Purchase with a Minimum Order 36 Web2Print 38 Business Stationery 39 Invitations 39 Signs, Display & Point of Sale (POS) 39 Workwear, Teamwear & Uniforms 40 Workwear 40 School Uniforms 40 Teamwear 41 Sales Promotion & Premiums 43 Print On Demand 45 Fast Fashion 46 User Generated Content 47 Brand Extension 47 Licensed Content 47 Stock on Demand 48 Printables 50 Marketplace Traders 51 Becoming Your Own Marketplace 52 Conclusions 53 Appendix 55 How Technology Helps Reduce The Barriers To Entry & Harness the Market Drivers 56 Overview of How Markets Are Enabled 57 Summary of On Demand Decoration Options 61 Estimated Market Values 63 Organisational Changes Needed for Mass Customisation 64 References 65 __________________________________________________________________________________________________________ On Demand Business Models Explained Page 3 of 65
Introduction
The objective of this white paper is to introduce you to the brave new world of on demand fulfilment and
the business models that this opens up for companies by exploring the potential ways in which it could
change an existing market you are involved in or create a completely new market
Some business models are completely new and many are a disruption of the way an existing market
currently works - potentially making them either more profitable or easier to enter / manage
Some of these markets are now also starting to mature but even they are changing as the internet
continues to revolutionise sales, production & fulfilment
The list of 50 potential markets in this paper is intended as a guide to the most established markets and
is no by no means an exhaustive list of all markets currently using the on demand business model. Many
of the markets and their various sub markets cross over into each other and like you would expect also
disrupt each other
What Are On Demand Products?
The term “on demand” means products that do not really exist until they are ordered and has three main
definitions in this white paper
● Virtual products that only become real products when they are ordered. This is usually by
decorating or printing on a blank product
● Made to order products that are created from base component and made from scratch when
ordered
● Virtual stock products that are not owned by your company or kept in your warehouse but
stocked in a third party warehouse and ordered on demand (commonly known as dropshipping)
All these types of products can be used individually or in combination to power an on demand business
model and will be explored in more detail over the pages of this white paper
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On Demand Business Models Explained Page 4 of 65
On Demand Content Types
Virtual and made to order products
typically fit into five main content types
that we will also explore in this paper as
these certainly effect which markets may
be most desirable for your business
1. User Generated Content - your
customers create their own
content either for themselves or
others to use from customisable
blank products
2. Simple text personalisation on a
predesigned template
3. Licensed Content - brand owners
supply content
4. Designer Orientated Content -
designers provide patterns and
images
5. Parts & Components - provided
by manufacturers to enable
product configuration or mix &
match
Again we will explore these in more
detail over the following pages
Many of these markets are interlinked
and we can learn from each of them
trick & tips to maximise revenue
As you can tell from our logo Custom
Gateway are a company that specialise in
providing a platform for the creation,
management and fulfilment of on
demand products so we are always keen
to understand the markets in which our
customers work and could work in the
future
All markets introduced in this white
paper are made possible by technology
and we will illustrate how they have or
will evolve as technology evolved and
improves
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On Demand Business Models Explained Page 5 of 65
What is An On Demand Fulfilment Strategy?
Companies traditionally sell what is in their own warehouses or shops - an on demand strategy is
focussed on what product can easily be accessed by a retailer or trader and can be more focussed on the
current market trends - it is powered by platforms like Custom Gateway and enables businesses to
increase their inventory without increased their investment in stock and perhaps even more importantly
not be left with stock that will not sell
On demand fulfilment is split into 3 main areas all of which purchase, supply or create products only
when a customer orders hence “on demand”
● Mass Customisation - using mass production techniques for order quantities of one
● Made to Order - final products made from stocked components
● Dropship - stock in warehouses owned by other people that are delivered direct to the customer
on demand rather than being stocked in sellers warehouse
The key benefits of an on demand strategies are explored over the following pages but all on demand
strategies benefit from increased choice and reduced or zero stock holding
The most common On Demand Strategy is known as “Dropship” when products are delivered direct to a
consumer but with some companies having increasingly sophisticated delivery networks this is not the
case for all on demand orders and deliveries back to distribution hubs to be consolidated or even click
and collect are certainly also part of the On Demand world
What Makes On Demand Possible?
Although this paper focuses on the business models made possible by on demand fulfilment it is also
worth summarising the key principles that have made the “on demand” model a reality
1. The Internet - has made it possible to connect companies like never before
2. Software Platforms - mean that both access to product data and automated ordering are easy
3. Reduced Distribution Costs - mean it is feasible to ship products from both multiple and
international locations
4. Available Suppliers - who understand the model can tailor their business processes to suit an on
demand model
5. The Long Tail - means people are used to and demand more choice
If you are interested in learning more about these factors then we have produced a more in-depth white
paper called “Understand Mass Customisation” available at www.custom-gateway.co.uk/white-papers/
What is the Difference Between On Demand & Dropship Products?
In reality there is no difference they are just different ways of describing the same thing so you can
substitute dropship for on demand anywhere in this white paper. The term Direct Despatch products is
also used by some companies to mean the same thing. The fact that different people call the market by
different names does lead to some confusion when analysing how different companies approach the
opportunity but hopefully this white paper will help clarify
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On Demand Business Models Explained Page 6 of 65
Truly A Global Marketplace On Demand does not only present increased business opportunities in local markets but also makes it easier for almost any company to adopt a global strategy With Dropship suppliers already in existence globally using a common software platform that creates either artwork, component build choices and branded paperwork automatically every organisation could now benefit from localised manufacturing A good example would be a designer or company that trades on a marketplace in one country but want to sell their products in another country. A marketplace like Amazon makes it easy to sell in multiple regions and then a software platform like Gateway OMS makes it easy to source and use prints in that region. This kind of expansion would traditionally only be possible for large organisations due to the set up costs and logistics but now on demand makes this affordable for even the smallest company - a real market disruption Based on the recent Technavio report this is the current and anticipated future breakdown of sales for personalised products globally Increased Profit Margins for On Demand With profit margins becoming increasingly tight for many retailers & etailers many on demand products offer the opportunity to improve profit margins. According to a recent Deloitte report “The Rise of Mass Personalisation” most consumers are happy to pay a 20% premium for personalised products. Other product groups like made to measure and made to order can command even higher premiums If you add the fact that people will pay more for personalised products to the fact that retailers do not have to pay for them until they are sold it is easy to see why most companies are keen to get involved __________________________________________________________________________________________________________ On Demand Business Models Explained Page 7 of 65
Photo & Personalised Gift Market Size
As many of the sectors we explore in this white paper are so diverse and often overlap it is difficult to get
a really accurate picture of the overall market size but for photo and personalised gifts there is some
pretty good research recently published In the “Global Personalized Gifts Market Report 2017-2021” by
Technavio.com that we have summarised below in a couple of infographics
Personalised now accounts for
almost 40% of total gift market
Despite challenging conditions for retailers Personalised Gifts are still predicted to grow by almost 10%
year on year for the next 5 years
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On Demand Business Models Explained Page 8 of 65
Throughout this white paper we will use different terminology to refer to different product groups that can be grouped under the “On Demand Products” banner On page 4 we identified the 3 main types of On Demand Products ● Virtual Products - typically personalised and print on demand ● Made To Order Products - typically made from components or simple manufacturing processes ● Virtual Stock Products - typically products that already exist but in somebody else:s warehouse The Technavio data focuses only on the personalised gifts / products market and does not take into consideration the other type of virtual products “print on demand” which is currently at least as big and likely to grow considerably faster as on demand disrupts the traditional printed clothing market.. We provide a full overview of estimated market sizes on page 62 We have also covered the main content types for personalised products on page 5 and the chart below shows the current split between the photo gifts and other personalised gifts. We will explain these products / markets on the following pages __________________________________________________________________________________________________________ On Demand Business Models Explained Page 9 of 65
Photo Gifts The market for developing films to create photo prints has just about disappeared as digital technology has taken over yet the market for printing your images has continued to flourish. A great example of the increasing popularity of user generated content. The main beneficiary of this global trend has been the photo gifts industry with more and more products being launched every year that you can print photos on. Photo gifting is all about user generated content with in some cases the use of preset templates to drop photos into According to a recent survey on the Global Personalised Gift Market Photo Gifts accounts for almost 32% of the total personalised gifts market place so although you need more advanced software to sell these products it is difficult to justify not selling them This is one on demand market that is quite mature but still seeing growth based on product innovation and printing advances As the name suggests this market is all about people uploading their own images so fits into the user generated content category and is very much about products only be created when they are ordered Here are examples of some of the leaders in photo gifts ● Shutterfly - www.shutterfly.com ● Photobox - www.photobox.co.uk ● Max Spielmann - www.maxphoto.co.uk ● Cewe Photobooks - cewe-photoworld.com Growth Drivers ● Smartphones increasing the number of photos taken ● Social media promoting the sharing of images ● Printing technology makes it possible to add photos to more products ● Consumer Awareness of the availability of these types of products ● Better browser technology and faster internet making it easier to create products Barriers to Entry ● Need image upload tools on your website ● Need specialists printing equipment for fulfilment ● The wide range of printing equipment now needed to offer a good product range Main Printing Equipment Used ● Photo Sublimation Printers for Prints ● Sublimation for Gifts ● Digital for Photo Books ● UV for printing photos on plastics & leather __________________________________________________________________________________________________________ On Demand Business Models Explained Page 10 of 65
There is a pretty established dropship supply chain for photo gifts making it easier for new market entrants and also a fair amount of expertise and hardware available for Instore production The main product categories in photo gifting are detailed on the following pages Photo Books This is probably the highest revenue area and has become a very popular way for people to showcase their photos. These require a more complex customisers and people often spend hours creating their books - it is really a kind of self publishing used to celebrate or remember an event or holiday The market for the traditional photobook has continued to grow over the last decade with lots of innovation within both types of books and software to create photo books. Historically a lot of photobook software solutions have involved downloading the software and building photo books offline however faster internet speeds and improved browser technology have lead to most photo books now being created within your web browser Market Leaders Local & Global https://cewe-photoworld.com https://www.snapfish.co.uk/photo-books https://www.vistaprint.co.uk/photo-gifts/hardcover-photo-books Prints & Enlargements Surprisingly despite the availability of printers at home there is still a strong demand for prints and reprints of digital photos . There is both a traditional low cost reprint market using silver halide printing technology and an enlargement business for creating posters using digital print technology There are also several specific business areas that are still driven by photo prints ● School photography ● Event photography ● Portrait photography ● Image Archives - like newspaper groups Wall Art The market for canvas prints has grown steadily over the last decade too and print technology has seen a big increase in the variety of different substrates offered as wall art ● Canvas ● Acrylic ● Aluminium ● Wood - Interior & Exterior ● Foamex Board ● Framed Posters ● Self Adhesive Posters __________________________________________________________________________________________________________ On Demand Business Models Explained Page 11 of 65
Design trends such as collages, word art, large online photo libraries and vintage reproductions have all also helped push sales. Content can vary from people uploading their own photos (user generated content) to people selecting images from vast photo libraries like Adobe Stock & Pixabay This has become a very competitive sector as high value and the equipment to produce is fairly affordable so it is the retailers that offer ideas and templates that currently seem to be flourishing Some leading wall art sites to review are ● www.picanova.com - create your own ● Fineartamerica.com - create your own and choose from an image library ● www.photobox.co.uk/shop/canvas-prints Home Decor Started as very much of a sub section of photo gifts but we will reveal further on in this white paper it has become a section in its own right and one of the fastest growing Other Gifts The range of other photo gifts continues to expand every year and to a certain extent continued strong market growth has been driven by this innovation The best selling other gifts categories are 1. Mugs 2. Phone Cases 3. Cushions 4. Bags 5. Calendars 6. Notebooks 7. Coasters & Placemats 8. Desk Gifts 9. Kitchen accessories 10. Food & Drink Photo gifts are also the basis for print on demand products which are explored later in this paper - in simple terms anything that is available as a photo gift can also be sold as a Print on Demand or.a Personalised product as detailed in the next section __________________________________________________________________________________________________________ On Demand Business Models Explained Page 12 of 65
Personalised Gifts This is a relatively new market that is still growing as retailers harness website plugins to make the buying experience more seamless and suppliers understand more about what decoration technology makes possible As the research shared earlier indicated Personalised is now almost twice as big as photo gifts and expected to be worth £Billion by 202 Market is very driven by traditional gifting events events like Christmas, Fathers Day & Valentine’s Day as well as birthdays / anniversaries It has certainly disrupted the existing gift market and according to the recent survey 68% of gifts are non photo which values this market at about X and that excludes flowers and greetings cards which are big categories in their own right Licensed products are still popular but in the best tradition of on demand products there is a very long tail of independent designers creating products All photo gifts suppliers can in theory produce personalised gifts but not that many do so there is a huge potential supply chain if you have your own content. Most of the suppliers have built their business on user generated content and are looking for ways to drive sales forward The high volume of independent designers has led to the rise of creative marketplaces like Not on The High Street or Etsy where designers either harness this supply chain or have their own small scale production operations. This fragmentation is also a good opportunity for retailers to reduce manufacturing costs and increase profits if they have their own designs Here are examples of some of the leaders in Personalised Gifts ● Not On The High Street - www.notonthehighstreet.com ● Getting Personal - www.gettingpersonal.co.uk ● Your Surprise - www.yoursurprise.nl ● Etsy - www.etsy.com ● Personalisation Mall - www.personalizationmall.com ● Amazon Custom - www.amazon.com/Amazon-Custom/ ● B2B trade marketplace for download - www.virtualproductwarehouse.com Main Growth Drivers ● Increased global gifting culture ● More inventive products ● Better quality products becoming available ● Browser development ● Printing technology ● Awareness of products __________________________________________________________________________________________________________ On Demand Business Models Explained Page 13 of 65
Barriers to Entry ● Need extra field on ecommerce website ● Customers want and expect a preview ● Need a wide range of suppliers ● Wide range of printing equipment needed for self fulfilment Main Printing Equipment Used ● Photo Sublimation Printers for Prints ● Sublimation for Gifts ● Digital for Photo Books As well as the photo gift suppliers there is also a reasonably well established specialist supply chain that has developed from traditional B2B suppliers in the sign , promotional and graphics industries using mainly dye sublimation and CVT (Cut Vinyl Transfer) printers because of the wide range of products they can produce The main product categories in personalised gifts are detailed below Flowers A very established and large marker which is more of a Made to Order product but is still showing growth mainly down to the opportunities for flower retailers to cross and up sell additional personalised products with flowers ● Chocolates ● Cards ● Hampers ● Soft Toys This has also happened in reverse with cards and gift retailers getting into flowers for example Moonpig.com The delivered flowers market is believed to be worth an estimated £X billion and is excluded from the figures quoted for other personalised gifts This is a good example of the evolution of the supply chain as A specialist supply chain has evolved to enable non flower retailers to sell flowers on the internet Flowers is also a great example of how on how the internet has disrupted an established market with % now being ordered online through a wider variety of sellers - this has undoubtedly increased the market but also reduced the traditional income of florists - although it can certainly be said that businesses like Interflora have harnessing the existing supply chain to drive competitive advantage This is something more and more on demand bricks & mortar retailers are looking at with Next being a good example __________________________________________________________________________________________________________ On Demand Business Models Explained Page 14 of 65
Greetings Cards & Invitations This is perhaps the most famous personalised product and has historically been dominated by Moonpig who have certainly disrupted this market and could be said to be a key driver of companies like CLintons cards going into administration as people's buying habits have changed Moonpigs success has encouraged many copycat etailers and technology certainly makes it easier for consumers to buy and send cards online Interestingly not all cards are personalised on the front cover but just as many personalise the inside pages of a card online where sometimes people just want to write inside the card makes the customers life easier by meaning they can write a personal message and do not need to find a stamp and a postbox A great additional use of technology is to store birthdays and then send reminders / card ideas to stimulate repeat purchase. Buying bulk credits has been another technology driven sales approach to this sector Examples of leading personalised card websites ● Moonpig - www.moonpig.com ● Scribbler - mainly inside the card personalisation - www.scribbler.com ● Funky Pigeon - www.funkypigeon.com ● Thortful - Greetings card marketplace - www.thortful.com The invitation market is split between web2print specialists and greetings card retailers who tend to focus on the more up market products. Technology now makes it easier to personalise invitation and the average order value is clearly much higher than the purchase of a greetings card for an individual making it a very desirable target market Here are a few invitation specialists ● Papier - www.papier.com ● Hitched - www.hitched.co.uk/stationery Licensed Personalised Products Although more of a content type (see page 5) then a sub sector of personalised gifts licensed products are becoming increasingly popular as personalised gift category because fans are seeking to create unique memorabilia. This is confirmed in the recent Deloitte Report ”The Rise of Mass Personalisation” which suggests 42% of consumers are happy to be led by brands rather than create their own products from scratch. Licensed products are also becoming increasing popular in the print on demand space (see page 46) for more details __________________________________________________________________________________________________________ On Demand Business Models Explained Page 15 of 65
General Personalised Gifts This category has seen the most dramatic growth with Not On The High Street growing very quickly by aggregating sellers under a single brand - again something not possible without technology The chart below illustrates the most popular product categories within the other gifts section. TShirts would rank as just about the most common wearable and probably on demand product as they are not only a gift. Many of these categories crossover into other sectors and some have their own categories like personalised greetings cards, hampers and drinks As the number of gifts that can be personalised continues to expand driven by both the increasing consumer demand and improved decoration techniques we thought it would be useful to split the above categories down into some of their most popular subcategories Wearables Decorations Kitchen & Tableware Stationery TShirts & Polos Party Banners Mugs & Drinkware Notebooks Outdoor Wear Christmas Decorations Aprons & Tea Towels Pens & Pencils Sports Wear Balloons Chopping Boards Pencil Cases Shoes & Socks Wrapping Paper Table Mats & Coasters Greetings Cards Caps & Hats Glasses Postcards Bags Calendars Food & Drink Sports & Toys Other Confectioney Water Bottles Bedding & Blankets Bottled Drinks Towels Make Up Bags Chocolates Puzzles Lunch Boxes Cakes & Biscuits Soft Toys Luggage Sauces Pets Jewelry __________________________________________________________________________________________________________ On Demand Business Models Explained Page 16 of 65
Personalised Hampers & Alcohol As detailed above Hampers and alcohol fall into the food & beverage section of personalised gifts Hampers are a popular made to order product that are put together on demand with choices of different products to complete a hamper (hence made to order). Hampers are a very high value gift There are four main types of personalised alcohol ● Personalised Label - supplied independently or with bottle ● Direct Print to Bottle ● Personalised Wine Blend with Label ● With Personalised Gift Box Alcohol has always been a popular gift but by adding a personalised label or gift box it increases - this also drives trend for creating sets - like a bottle of scotch with engraved whisky glasses or cheese selection with a personalised cheese board Both product categories are also a big corporate gift either personalised or just company branded Here are some good example websites ● Label Only - www.personalisedbottlelabels.co.uk ● Blend Your Own Wine - blendtique.com ● Build Your own Hamper - www.hamper.com/create-your-own Subscriptions Are inherited from the publishing industry and allow people to personalise their choice - there is a lot of cross over to other categories like flowers, alcohol etc but this is an increasingly popular way of selling for retailers as they secure a higher value order and by using technology can be confident of fulfilment There are now a few specialist tools to help you manage subscription businesses like www.subbly.co Subscriptions have become a popular gift and although can be for personalised products the most popular use is a recurring purchase like a new bottle of gin to try each month, or fresh flowers once per month. The key is to make sure the fulfilment is automated once the subscription has been paid for Personalised Packaging, Gift Wrap & Gift Boxes Although can be included as part of an upsell for most personalised gifts this does justify its own sub category as many people now use personalised packaging to personalise a non personalised gifts. The most popular products are listed below ● Gift Wrap ● Bottle Bag or Presentation Box ● Box __________________________________________________________________________________________________________ On Demand Business Models Explained Page 17 of 65
Personalised Books & Newspapers Could be considered part of personalised gifts but probably now big enough to have its own category this disrupting the traditional children’s book market and increasing choice in the birthday / anniversary gifting space Technology is particularly important here both on the website to visualise a personalised book and even more importantly in the factory to automatically create the artwork for production Here are examples of some of the leaders in personalised books & newspapers ● Wonderly - www.wonderbly.com ● Signature Books - Wholesale Supplier - www.signature-gifts.co.uk ● Pen Wizard - www.penwizard.com ● Spoof Newspapers - www.inthepaper.co.uk ● Original Newspapers - www.historic-newspapers.co.uk Growth Drivers ● Wider range of choices now available ● Increased interest from traditional publishing houses ● Printing technology is reducing production costs ● Awareness of products by consumers Barriers to Entry ● Need fairly complex data capture on website ● Specialists printing equipment quite expensive ● Higher product set up costs in design, copyrighting & artwork set up ● For Newspapers you need an archive of old papers Main Printing Equipment Used ● Digital Print ● Book Binding Equipment ● Embossing and box making equipment There is now a pretty established supply chain and printer manufacturers like HP are helping drive down production costs and more and more companies can produce books The market is split between original designs and licensed products There is also an interesting additional market for newspapers which make great birthday gifts as they feature a certain date and are split into ● Spoof Newspapers ● Front Page Reprints ● Supply of Original Newspapers __________________________________________________________________________________________________________ On Demand Business Models Explained Page 18 of 65
Gift Cards & Experiences On demand is adding flexibility and choice to gift cards and experiences and is at a fairly early stage of development As with Greeting Cards it is expected that production technology will now increase the number of gift cards that are personalised because as the name suggestS they are predominantly a gift and personalisation is proven to be popular to demonstrate more thought Gift cards can be both personalised and on demand and as the name suggests you are selling a service - this is ideal to tie a gift card to a one off event As the experiences market has matured and got more competitive personalisation has started to be used to differentiate and add value to an experience by delivering a personalised presentation box / certificate or extra personalised product related to the gift Both the reasons above have been proven in other markets Here are examples of some of the leaders in selling experiences ● Red Letter Days - www.redletterdays.co.uk ● BuyaGift - www.buyagift.co.uk ● Virgin Experiences - www.virginexperiencedays.co.uk ● Activity Superstore - Trade & Wholesale - www.activitysuperstore.com Growth Drivers ● Consumers looking for something a bit different ● Increased gifting culture ● Awareness of market sector ● Consumer increased use of personalisation ● Increasing need to differentiate the product Barriers to Entry ● Very fragmented supply chain really need a wholesaler ● Different selling an intangible product - different data capture ● Complexity of managing redemption Main Printing Equipment Used ● UV & Digital Printers for Gift Cards ● Sublimation for Gifts ● Inkjet for low volume personalised Labels of Certificates There is a huge potential supply chain for experiences but it is fairly fragmented hence the evolution of a wholesale / trade market managed in the UK by companies like www.activitysuperstore.com __________________________________________________________________________________________________________ On Demand Business Models Explained Page 19 of 65
The main product categories for personalised experiences are centred around ● Driving ● Health & Beauty ● Short Breaks ● Food & Drink ● Days Out ● Adventures The gift card industry is increasingly adopting personalisation either on the accompanying greetings card or on the actual gift card itself The main reason for slower adoption of personalised gift cards is the cost of setting up instore printing (which is now considerably reduced) and the increased security requirements surrounding the cards themselves There are several specialist companies like www.nitecrest.com who can provide both blank pre-charged cards for your own personalisation or a digital fulfilment service to print for companies As well as personalised or print on demand gift cards there is another application in the on demand world for gift cards for helping retailers sell personalised products without an instore kiosk. This market is best explained on www.customproductcards.com __________________________________________________________________________________________________________ On Demand Business Models Explained Page 20 of 65
Personalise Anything A new market that is emerging driven by improving decoration technology and the desire of retailers to find added value on existing products that can increase the margin they make and in some cases create an Instore customer experience It is really an upsell / cross sell business model where people are offered the opportunity to add personalisation to a standard product during the online sales process The main product categories currently using the model are children’s wear, sports wear and gifting Some good examples of who do this model well are ● Next - Personalised Nightwear - www.next.co.uk/style/st408664#546973 ● Zara - introduce personalised clothing - www.zara.com/uk/en/help/customised-items-h51.html ● My First Years - Personalised Baby Products - www.my1styears.com ● Fanatics - Personalise Sports Products - www.fanatics.co.uk ● Thorntons - Personalised Chocolates - www.thorntons.co.uk/personalised-gifts Growth Drivers ● Availability of low cost decoration options that can be added to warehouses ● Retailers looking for ways to increase profits ● Consumer demand ● Better website technologies Barriers to Entry ● Making batches of 1 can be expensive if not good automation ● Need well executed cross sell model on your website ● Depending on options offered may need quite a wide range of equipment Main Printing Equipment Used ● Embroidery - single head machines ● Engraving ● UV for packaging There is currently only a few innovative suppliers that have invested in the equipment and software needed to deliver the mass customisation model Main product categories are kids wear, sportswear. night wear and accessories like bags. The personalisation type is usually a simple name or initials __________________________________________________________________________________________________________ On Demand Business Models Explained Page 21 of 65
Made To Order
Often known as MTO this is the ultimate mass customisation business model where products are made
up of a range of parts & components and the customer gets to customise almost every aspect of their
product
The term made to order could really apply to any personalised, print on demand or customised but in this
white we use it only to refer to products made from premade parts, components and processes
The concept can apply to all sorts of products and was really started by Dell in the late 90s and taken to
the next level by Nike
Another innovative made to order application is cut and sew which combines a personalised product with
a made to order products - the example we use below is leggings
Here are examples of some of the leaders in made to order
● Nike ID - www.nike.com/gb/nike-by-you
● Dell Computers - www.dell.com
● Car Manufacturers - www.audi.co.uk/explore-models/audi-car-configurator.html
● Player Layer -
playerlayer.com/leggings-studio/leggings-studio-run/lifelayer-leggings-custom-print.htm
Growth Drivers
● Consumer desire to create something original
● Investment by brands in how this creates a point of difference
● Awareness of what is now possible
● More advanced eCommerce
● Automated production machines like cutters
Barriers to Entry
● Expensive to set up a factory
● Needs a separate website as very complex to delivery online
Main Printing Equipment Used
● Selection of standard items for mix and match
● Fabric Sublimation
● Laser cutters
Most of this type of business is currently done direct by the brands themselves
The main product categories are Sportswear, Furniture and Technology
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On Demand Business Models Explained Page 22 of 65Made to Measure
Often known as MTM this is the ultimate mass customisation business model where products are made
to individual
This has existed as a service industry but technology has enabled it to start to move online
Established offline market such as made to measure clothing, made to measure curtains and blinds
Here are examples of some of the leaders in made to order
● Tailorstore = Clothing - www.tailorstore.co.uk
● Hillaries Blinds - www.hillarys.co.uk
● Next.co.uk -
https://www.next.co.uk/shop/department-homeware-productaffiliation-madetomeasure
Growth Drivers
● Continued need for bespoke sizes
● Traditional business models moving online like M2M
● Reduced range in retail
● Lower delivery costs mean higher value products can be produced cheaper
● Technology making shorter sales process
Barriers to Entry
● Expensive to set up a factory
● Needs a separate website
● Need an enabled supply chain
Main Printing Equipment Used
● Photo Sublimation Printers for Prints
● Sublimation for Gifts
● Digital for Photo Books
More about enabling the existing supply chain to work online and making lower cost offshore
manufacturing possible
The main product categories are fashion and home decor
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On Demand Business Models Explained Page 23 of 65Home Decor Home Decor has historically been considered a subcategory of photo and personalised gifts but as one of the fastest growing sectors of personalised products it now really justifies its own section in this white paper Home Decor covers a wide range of products from curtains to cushions to wallpaper basically almost anything you can think of to decorate a room. Over the past 5 years sales of personalised cushions have grown dramatically as the quality of the product has improved and it is now one of the top 5 selling personalised products Many retailers are keen to promote as products typically have higher than average selling prices and are purchased in reasonable volumes There are also good opportunities for both B2C sales for the home owners and B2B sales for more upmarket office decoration User generated content is probably the most popular design source but there is but also lots of demand for niche designs and an increasing demand for licensed products too. It does not always have to be all about printing and configuring your own furniture from a range of fittings / materials is also a popular option for personalised home decor Here are some examples of interesting personalised Home Decor websites ● Society 6 - society6.com/furniture ● www.bagsoflove.co.uk ● www.photowall.co.uk ● Mwwondemand.com - market leading trade suppliers for textile products Growth Drivers ● Better Quality Products & Printing technology ● Design trends ● Awareness of concept ● Long tail theory Barriers to Entry ● Websites will need image upload tools ● Equipment more expensive to buy and supply chain not that mature ● People do not look for these type of products on gifting sites Main Printing Equipment Used ● Digital printing for wallpaper ● Roll to roll Sublimation Printers for textiles ● Cut & sew facilities required ● Vinyl printing for wall decals ● UV printing for accessories __________________________________________________________________________________________________________ On Demand Business Models Explained Page 24 of 65
Most photo gift suppliers provide some home decor product but there is not really a specialist supply chain covering all product groups yet. Suppliers tend to either specialise in textiles, furniture or wallpaper With options like UV printing there is an increasingly wide range of products available but the main product categories currently being sold are listed below ● Bedding ● Cushions ● Wallpaper ● Wall Decals & stickers ● Floor coverings ● Furniture ● Lamp Shades __________________________________________________________________________________________________________ On Demand Business Models Explained Page 25 of 65
Incentives, Trophies & Rewards A traditional marketplace with most towns having their own trophy shop supplying clubs, businesses and companies that has started to change over the last 5 years with online providers gaining increasing market share as they were able to offer a wide range of products and services Personalisation for trophies is fairly simplistic with most products being engraved so all you need to do is capture a text field online. These types of products have always been produced in batches of one in small shops but in our modern on demand world there is an opportunity to automate the engraving process and go direct from website to engraving machine There has also been strong growth for companies providing rewards and incentive programmes an industry that has evolved from sourcing carriage clocks as long service awards to providing an IT platform to help businesses motivate and reward their staff Like many of the sectors we explore in this white paper there is a fair amount of cross over between different markets with trophies and rewards often being sold by promotional product distributors or web2print specialists. This is only likely to increase as historically many businesses have avoiding this market as it can be expensive to handle batches of one but as you now hopefully appreciate technology is changing this situation and we are likely to see less trophy shops on the high street in years to come Here are examples of some of the leaders in trophies and incentives ● Trophy Store - www.trophystore.co.uk ● Perk Box - www.perkbox.com/uk ● Terry Berry - www.terryberry.com Growth Drivers ● Younger consuming wanting to purchase these kinds of products online ● Technology making it cheaper to process small orders ● Increasing competition for the best staff has led to more focus on staff retention ● Printing technology offering faster product ● Innovative new products Barriers to Entry ● Need to invest in technology to make small order profitable Main Printing Equipment Used ● Engraving for trophies awards & medals ● Sublimation for Gifts / Certificates There is a very established supply chain of wholesalers used to supplying small distributors with blank products for engraving and also quite a few sub contract engraving suppliers The main product categories sold in trophy shops can be split into __________________________________________________________________________________________________________ On Demand Business Models Explained Page 26 of 65
● Trophies ● Medals ● Awards & Plaques ● Crystal Glasses & Decanters For staff rewards and motivation there is a really wide range of products that can be used and will all be mentioned in other categories ● Gift Experiences ● Luxury personalised gifts - engraved metal & leather ● Treat based personalised gifts like chocolate __________________________________________________________________________________________________________ On Demand Business Models Explained Page 27 of 65
Instore Personalisation
Instore personalisation is something that has been made possible by the advance in printing technologies
and the reduction in costs of printer purchase
There are typically 4 main reasons why retailers may choose to personalise in store rather than offer a
dropship fulfilment model
● Instore personalisation is a great way to introduce some instore theatre
● Printing instore will almost certainly improve sales performance as shoppers always prefer to take
away their purchases on the spot,
● Brands are very keen to offer in store promotions to increase their profile and encourage loyalty
● Providing a click and collect service
Traditional you have always needed to purchase Kiosk and Printing equipment to start personalising in
store but this market is being disrupted by technology such as the smartlink from Custom gateway that
can be loaded on any internet enabled device (even the customers smartphone) that enables the
creation of personalised products and can then trigger the generation of the print ready artwork
As detailed above brands are becoming increasingly interested in instore personalisation as part of their
marketing campaigns - here are some examples of recent in store promotions that have been very
popular successful
● Personalised Jars of Nutella
● Personalised Toblerone
● Kinder Easter Eggs with Personalised Boxes
There are 2 main options for fulfilment
Instore Printing
The most popular option is to print products in store but this does require an investment in printers and
suitably trained staff to produce products. With modern UV printers almost anything can be printed and
instore
Dropship Fulfilment
If a company does not have the space, budget or suitable staff then they can still sell personalised
products in store by offering a dropship fulfilment service where customers pay in store and their
products are produced off site and either delivered back to the store or direct to their homes
When a retailer wants to offer a wide range of products they often combine both in store printing for the
most popular lines and use dropship fulfilment to extend the range without needing additional printers
etc
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On Demand Business Models Explained Page 28 of 65Click & Collect For traditional eCommerce click and collect accounts for almost half of retailers sales so it is not surprising that with the growth of Instore personalisation and improved service levels for drop fulfilment it is. Continuing to increase in popularity For photo gifts and personalised gift franchises 1 hour click and collect is not unusual with most photo gift retailers offering the service Here are examples of some of the leaders in providing in store printing services - most like Custom Gateway offer a software / training solution but some providers will help staff an in store printing franchise ● Custom Gateway - provide software to work with any products or printers ● YR Store - provide a full service ● Handmade Christmas - enable in store personalisation of seasonal products ● Creation Express - provide a franchise package with software, printers & products Growth Drivers ● Printing technology ● Reduced cost of printers and opportunity to create on any internet enabled device ● Awareness of concept via successful promotional campaigns ● Retailers looking for in store theatre Barriers to Entry ● Cost of kiosks can be expensive when you have multiple branches ● Staff need training ● Retailers often struggle with space ● Range of printing Main Printing Equipment Used ● UV ● Inkjet for labels ● Engraving ● Embroidery There is a pretty established supply chain for providing the popular blank products and appropriate equipment. There is also an opportunity for retailers to personalised their own stock products as described in the “Personalise Anything” part of this report The main product types that are currently successfully printed in store are ● TShirts ● Packaging for Confectionery & Cosmetic Products ● Phone Cases ● Mugs __________________________________________________________________________________________________________ On Demand Business Models Explained Page 29 of 65
● Photo Prints & Wall Art ● Engraved gifts Due mainly to the popularity of Instore personalisation in hypermarkets and click and collect in the US . Instore personalisation accounts for a surprisingly large percentage of total personalised sales __________________________________________________________________________________________________________ On Demand Business Models Explained Page 30 of 65
Souvenirs Attractions, shopping centres and events are all about experiences and have been selling many different types of souvenirs and merchandise for many years but as detailed on the previous pages the evolution of in store personalisation, green screen photo technology and the growth of the print on demand fulfilment model has created new opportunities to increase sales Although like many other categories there is cross over souvenirs really needs its own category due to the substantial sales volumes being generated and we detail detail below the main sub sectors Green Screen Experiences Also known as chromakey photography this is when a visitor is photographed against a green background and then their image is superimposed against a range of relevant backdrops to the attraction. These images are then sold as prints, posters, books and other gifts. Examples of locations offering these photos are places like ● Harry Potter Experience ● Manchester United Football Club ● London Zoo ● Disneyland Green Screen needs somebody to take the photos (although self service models are coming) so only really works in areas of high visitor numbers that can generate the income to cover the photography costs It also works best when the products are proactively sold to visitors Although this market has existed for a while there are several new innovations on the way that will allow people to upload their own photos (so no green screen required), sell online as well as on site at the attraction and new virtual reality apps that can make the experience more self service Print On Demand for Smaller Attractions Smaller attractions are now using print on demand to expand their merchandise ranges enabling them to try new ideas and not get stuck with stock. This has expanded both the number of attractions able to sell merchandise and the range of products that can be offered . More details can be found in the print on demand section. Museums like the Science Museum and Natural History Museum have both started to use print on demand to expand their product ranges Instant Photo Gifts Are sold mainly at theme parks where visitors get photographed on a ride to see their photos on a screen and then buy either a print or their photos inserted inside an acrylic block, branded frame, key ring, phone case or other product. This is also a substantial market as people love to take home a keepsake of their favourite ride. The products are quite simple and basic but are very quick and cheap to create. More theme parks are now looking into more sophisticated forms on onsite personalisation as detailed in the Instore personalisation section. Attractions like Alton Towers sell 100s of instant photo gifts every day __________________________________________________________________________________________________________ On Demand Business Models Explained Page 31 of 65
Personalised Souvenirs As with normal gifts there is a growing demand for personalised non photo gifts too with many attractions now installing kiosks so visitors can design then collect a print of various products like books and newspapers as a souvenir of their day As with more general gifts these can be produced onsite or sold online if the attraction has an active website Event & School Photography The final big area for souvenirs is event and school photography. This could also be classed as a photo gift but we think it sits better as a souvenir as the purchase is certainly driven by attending a sporting / entertainment event or being in school class / year This is currently dominated by standard print sales but has great opportunities to be expanded by using the digital assets to print on other product types using dropship fulfilment as detailed in the “Monetising Your Assets” section of this white paper Growth Drivers for the souvenir market are ● Green Screen technology ● Print on demand making more products possible ● Awareness of new products ● Dropship fulfilment ● Instore printing Barriers to Entry ● Investment in equipment ● Can be time consuming Main Printing Equipment Used ● Photo Sublimation Printers for Prints ● Sublimation for Gifts ● Digital for Prints There is a pretty established supply chain for both the product blanks, dropship fulfilment and in store printing as detailed in other sections The main product sectors are listed below ● Prints ● Instant Gifts ● Wall Art ● Clothing __________________________________________________________________________________________________________ On Demand Business Models Explained Page 32 of 65
Customised Services
Personalisation is not limited to physical products but as the research below from Deloitte indicates it is
also increasingly popular when selling services like holidays, flights, restaurants and hotels
The chart opposite shows what personalised
products have been recently purchased by
consumers and as you can see about 25% of them
are services rather than products
Here are examples of some of the leaders in the
selling customised services
● Ryan Air - www.ryanair.com/
● Trivago - www.trivago.co.uk
● Expedia - www.expedia.co.uk
Growth Drivers
● Consumer demand for more choice
● Advances in technology for online booking
systems
● Increased use of smartphones
● Service providers looking for more ways to
differentiate their offering
● Rise of comparison sites
● Availability of data from from service
providers
Customised services are very much like personalised gift experiences and in most cases are not about
printing something personalised but putting together a range of options. They fit into the made to order
content product type
Barriers to Entry
● Need the ability to make different choices on your website - it is not just about buying a product
● Need integration with a diary or booking system so can be certain service available if date related
● Need service provider to be connected to the online world so can offer automated fulfilment
● Currently a fairly poor supply chain - you will need to build your own like the Uber example below
Uber Eats is an interesting example of a personalised service where Uber have gathered data from a
range of take aways so they can offer a customised food delivery. Clearly Uber own no restaurants but
have become a big personalised food supplier
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On Demand Business Models Explained Page 33 of 65Fundraising
Fundraising is a fairly new market created by the availability of the on demand supply chain that uses
virtual products / user generated content to raise funds for anything from your kids school to a charity to
a specialist interest group
It is a great example of how on demand helps create an entirely new marketplace and is currently built
almost entirely on the popularity of printed t-shirts
It works as follows
1. Website make available a range of blank t-shirts for fundraisers to add designs and messages too
at a set manufacturing price
2. Fundraisers create their own t-shirts online and decide what price they want to sell at
3. Fundraisers then promote them to their fans, members and friendship order them on the website
4. T-shirt are then either produced on demand or orders consolidated and printed in bulk
5. T-Shirts are sent to the people that have ordered them and fundraisers get a payment for the
profit
Here are examples of some of the leading fundraising websites
● Teespring - teespring.com
● Custom ink - www.customink.com/fundraising
● Bonfire - www.bonfire.com/
Growth Drivers
● Ability to design online
● Printing technology to male low volume cheaper
● Desire to raise money for a wider vaRiety Of courses
● Competitive nature of charity sector
Barriers to Entry
● Cost of acquisition how will people find out
● Potential capital of setting up the website
Main Printing Equipment Used
● DTG
● Sublimation for Gifts
● Digital for Photo Books
There is a pretty established supply chain of DTG printers
This market is completely driven by user generated content and the main product categories for
fundraising are t-shirts, drinkware and bags
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On Demand Business Models Explained Page 34 of 65You can also read
