Founded in a modest garage in Cologne, Germany, The Customization Group has evolved into one of the world's top mass customization providers.
Earlier this year, TCG shared the exciting news that merchOne, its Europe-based POD fulfilment platform, is launching operations in the USA to make customized on-demand wall art more accessible to e-commerce entrepreneurs there.
TCG now boasts five total production sites in Germany, Poland, Latvia and the US, with a combined daily production capacity of over 500,000 customized products. Those items are shipped to more than 170 countries.
In the conversation below, Philipp Muehlbauer talks about the growing market for innovative, customized solutions, the value of "mass customization," and more. Philipp is CEO of merchOne, and co-founder and co-CEO of TCG.
Philipp, let's begin by talking about the growing demand for custom goods worldwide. What is your team hearing from customers, and is the wall / home decor market on the rise?
The customization trend is on the rise, and I believe it is directly linked to societal trends and how we exchange information. The rise of the influencer economy has fundamentally changed the mindset of society. People are striving to be different rather than blend in, and this desire for individuality is one of the forces pushing our industry. Additionally, the personalized gifting industry plays a significant role here, as people increasingly seek unique, customized gifts that reflect the recipient's personality and preferences.
Also, the principle of scarcity significantly enhances the perceived value of unique items. When something is considered unique, it holds a higher perceived value, which drives people to invest more in custom products. Which, of course, means higher profit potential for us as the company. This trend is also true for older generations, who appreciate the uniqueness of products and the added value of personalized design. We see this in the motifs added to our products. Wall decor and personalized home products are most definitely on the rise.
Your demand-driven supply chain model ensures that nothing is produced until the customer places an order. You have that extreme level of personalization, yet also produce products with very high speed and reliability. Can you talk about the importance of achieving and delivering what The Customization Group refers to as "mass customization"?
Imagine ordering 100 mugs for your team as a Christmas gift from the company. The value of such a gesture is significantly enhanced if each mug is personalized for the recipient, rather than having the same generic Christmas message on all of them. Now, imagine receiving these personalized mugs much faster than a typical bulk order and for the same price.
That is mass customization, and we have perfected it over the last 18 years.
At TCG, it's about giving our customers exactly what they want, when they want it, without compromising on quality and minimizing waste. This is the driving force of TCG, and with 18 years of experience, we currently produce up to 500,000 customized products daily. We've developed our own state-of-the-art software capable of nesting designs to achieve the most efficient production flow. This in-house software is continuously improving. With the rise of AI, we see countless opportunities to further perfect and automate our production processes and optimize the overall supply chain.
Your customers can turn to TCG for an impressively wide range of items, including custom canvas, posters, wall art, textiles, photobook, prints, calendars, as well as photo gifts. Can you describe the importance of your production flexibility, along with the role HP technology plays at your business?
HP printers offer high color brilliance and vibrancy while being environmentally friendly and sustainable. They allow us to easily align with global quality and color management standards, which is important for a worldwide operating company. Above all, they are suitable for the print-on-demand model because they enable the creation of intelligent workflow solutions and maintain control over the production process. They also provide high efficiency, adapting seamlessly to constantly changing materials and data sources, which is very much the case for TCG.
Your team is committed to making positive environmental and social impacts, and you share that progress each year in a report. How does TCG approach sustainability, and what have you learned as a team during your sustainability journey?
The print-on-demand model, in its essence, is sustainable. We only produce what has already been bought. So, there is no waste.
The most important learning is that sustainability has to be embedded in the company’s culture and seen as a benefit in itself. It should not be taken as something pushed on you by state regulation or done just because everyone else is jumping on this wave.
Some sustainable practices can indeed significantly improve not just the efficiency of the production processes but the overall profitability of the company. One obvious example is the production of our own energy with solar panels on our production sites. A less obvious example is working with our office culture to encourage productivity.
AI has supercharged our human resource. It helps us to avoid waste of human energy as our teams can focus on more strategic tasks while AI is taking care of the repetitive and technical things. We decided very early on to encourage the use of AI tools throughout our teams and share the best practices. There have been no barriers to introducing AI workflows into our daily processes. The results have been amazing, with a notable increase in the productivity of our teams
Earlier this year, you shared the exciting news that merchOne, your Europe-based POD fulfilment platform, is launching operations in the US. How is that expansion going, and what's your next goal for US operations?
We’ve had fulfillment centers in the US for some years now, as we have a well-established B2C market on the continent with multiple direct to consumer brands. Through B2C operations, we’ve perfected our production flows and are very confident about our strength as a fulfiller for B2B partners.
A key differentiator for us in the US market is our ability to offer cutoff dates that are better by two to three days than any other fulfiller. This is a very important unique service promise for B2B sellers as it not only allows them to sell for longer during peak demand periods, but also reduces competition from other sellers. This, in turn, significantly drops their digital campaign costs.
The B2B business is picking up strongly, and we have the ambition to become the leader in on-demand wall art not just in Europe but also in North America. As for a more tangible goal, we strive to expand our US product catalog to the same extent as the European one.
Personally, what is the coolest thing about your job?
One can really say that we are a startup on steroids.
Endless innovation and the amazing dynamics of the industry. There is so much happening at different levels/layers of the industry – on the supply chain side, on the tech side and in consumer habits. It is a true thrill to follow these developments and jump on the opportunities.
While The Customization Group is a large company, we have the stamina and mindset of a startup. We have pivoted our focus several times through our 18 years of existence to make sure we stay on top of the game. So, game on! We are ready!
