2011.36 | 3D Printer as Retail Game Changer

It goes without saying that if pure music retailers had seen the rise of MP3 and iTunes a little more clearly, they may have approached things a little differently.

The march of technology affects all retailers in one way or another, and the lesson of the music industry has not been lost on the book industry.  The rise of the Kindle, the Nook, Kobo and more all indicate that retailers and content providers are approaching these radical changes intelligently; by trying to adopt them as their own and make them part of their business model before the wave of consumer demand overcomes them and makes them completely redundant.

Staying ahead of these developments involves quite a lot of guesswork.  For example, who would have anticipated the rapid adoption of smartphones driven by the iPhone less than 5 years ago.  Before that time, few retailers were asking about integrating mobile into their business in earnest – now all of them are doing so.

There is a technology that could have a huge impact on retailers in the future, but I have seen very little discussion on the point and that is 3D Printing.

For the uninitiated, 3D printers are machines that use plastics to ‘print’ small 3d items.  They work along similar lines to the old inkjet printers or plotters from the past, except that instead of using a robotic arm to just draw on a sheet of paper, they lay down layers of plastic to build a 3 dimensional object.  Once one layer is put down, the ‘print head’ is lifted a level, or the layer moves down, and another layer of plastic is put on top of the first.  As the layers build, a 3 dimensional object is formed.  A user opens a file with a 3 dimensional object plotted in it from a CAD application of some point, selects Print, and the printer does the rest.

Solutions of this type have been used for prototyping for some time, and I’ve even used some of these on mockup solutions in our labs.  What is most interesting about the technology is that it is available for purchase to consumers, and there are open source solutions to make this technology available to the masses.

The most well known option available is MakerBot Industries Thing-o-Matic, which retails for just under US$1,300.  This user assembled kit makes it possible for home printing of 3D objects.

Today, these devices just print small plastic pieces, so what is the potential impact on retailers? Let’s consider a future where these 3D printers become increasingly sophisticated.  They become as cheap and simple to obtain as our paper printers, they use stronger materials, they can print larger items, they can use different types of material, they can print very sophisticated objects and they are simple to operate as a paper printer.

If all of this were true at some point in the future,

  • It would be possible to purchase a digital copy of physical object and print it at home.
  • There would be no physical inventory to fulfill orders, no shipping to customers, and very little in the way of  logistics required.
  • No need to visit a physical store for purchase.
  • ‘Instant’ gratification for consumer.
  • There is an increased ability to handle massive swings in consumer demand as long as the server traffic can accommodate hits from consumers.
  • Ability to effectively release new products quickly as no pre-release manufacturing needs to be waited on.
  • There is a potential threat of piracy on the design of physical items – just like there is with mp3 files or eBook files.
The net impact of this type of solution could be very similar to the impact of mp3 and eBooks to brick and mortar retailers.   3D printers would drive different revenues as designs instead of products are sold, new nimble online competitors would arise, and many other retail landscape altering changes could occur.  There are already services that will print items in 3d for customers as a service, as an example.
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Will this technology mature quickly or not?  What changes will occur because of it, and when?  It is impossible to say, and guessing is a sure way to look the fool in the future.   What is certain is that retailers should keep an ear to the ground to ensure that rapid progress in technology is something that is used as a potential competitive advantage, as opposed to the technology that puts a retailer out of business.

2009.29 | Attack of the eReader Clones

Learning from mistakes is a basic lesson that publishers, booksellers and gadget manufacturers are not taking lightly.

Amazon is making headway on selling ebooks, claiming that Kindle growth is “very strong”, starting with the success of the original Kindle eReader, and building upon it further with the the release of the improved Kindle DX in the first half of 2009. With the success of the iPod product family and their close alignment with iTunes resulting in blockbuster sales for both – remember that iTunes sells more digital music than anyone by far and more music than most brick and mortar retailers – it seems that publishers, booksellers and electronic gadget makers are not going to ignore the potential of the electronic reading game.

Borders UK is trying Elonix, Shortcovers wants consumers to use thier mobile, Sony has a strong offering, and there are certainly no end of other models and manufacturers vying for a place in a potentially lucrative market. Magazines have also been getting into the mix, with Starwood hotels offering free digital download of popular magazines for hotel guests.

It will be interesting to see if ebooks expand in the same way as music and video. While the ebook model removes the distribution channel required for regular books and provides instant gratification with books downloadable immediately after purchase, it also requires yet another gadget with a cost. That gadget does not necessarily mimic the same experience that many consumers desire in a book. The heft of a book, the ability to fold and hold it as they wish, and even the ability to share it with friends or pass it on give the physical aspect of a book more value than with a CD.

While music is a very different consumer experience from books, it is still worth watching to see how consumers move this business, and these organizations are wise to continue to play a part in the equation.

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