What is Co-creation?
To get a handle on co-creation we must first differentiate it from product customisation. Co-creation relies on brands involving their audiences at an earlier stage of a products life-cycle by allowing them input on strategic design and build decisions. Whereas customisation, more simply, allows consumers to adapt a product after it's sold in its finished state. In this way, co-creation can be thought of as an 'open source' approach to product development.
Why is it important?
Co-creation allows consumers to take a more integral role in a product's design. In an effort to market products that are a better fit to their target market, brands now seek to reduce spend on R&D and instead communicate directly with their core markets, garnering public opinion before incurring heavy costs developing new sku.
The result is a reciprocal relationship which benefits brands and consumers alike;
- Consumers, because they are more actively involved in the conception and production of a new sku and hence the finished product more tailored to their preferences.
- Brands, because they are better equipped to successfully produce goods which resonate with their intended audience, all at a lower cost than they could previously.
How is it relevant?
While it may be difficult for brands to change their infrastructure to integrate consumer's ideas at the earlier stages of product development, many of the larger corporates are seeing the value. Coke, Nike, Dell, Burberry, IBM and P&G have all launched product lines which have, to some extent, been co-created.
Coke's latest fountain – The Freestyle allows consumers to choose from over 100 variants, including the known parent brands but interestingly allowing them to be further customised with additional flavours. Consumers can even download an app, in which they can experiment with all options and then send their order directly to the machine. For a company as focussed on sub brands being served exactly as intended, a movement towards this type of co-creation marks a step change in their ethos - a move away from the absolute power approach, instead now embracing the input of consumers.
Burberry has also seized the initiative. To perhaps prevent high-street brands copying their key season trends and offering them to consumers at a lower price, they gave people the chance to interact directly with their fashion shows, allowing consumers to order items direct off the runway. Their most iconic piece, the Burberry trench was even subject to an overhaul as they offered consumers the chance to contribute to a limited edition design.
In conclusion, it's the inexorable growth of social media and the streamlining of digital channels that allows consumers and brands to interact more easily and more efficiently. This direct contact now means brands can't treat consumers as invisible - the obvious PR risk of doing so being too great to consider. Therefore, the balance of power has shifted, from the brands who previously told people what, when and how to consume back to the people buying the products. Competition, is generally thought of as being a good thing and as consumers it's a way of protecting us against brand power. That said, in a competitive market where brands must convince individuals to part with disposable income in exchange for products, the rise of co-creation is an increasingly necessary part of building a successful brand.