Tag Archives: retail supply chain

3D Printing Technology for Retailers – An Opportunity or a Waste of Money?

3D printing technology for retailers is now emerging as an outcome for small localized retailers that are facing closure. However, as it is with most disruptive technologies, the advantages that 3D printing offer for retailers should be weighed against its potential pitfalls.

Although the 3D printing technology has been used for a number of years, it has been mostly on an industrial scale. Meanwhile, the price of desktop 3D printers has started to come down resulting in an average annually growth rate of 170% since 2008 1. The door is now starting to open for innovative retailers to include 3D printing technology into their business models. As a result, brave small retail store owners have already started using in store 3D printing.

3D printing is a game changer in retailing, according to Richard Kestenbaum, contributing for Forbes. Richard writes: “Last week Ministry of Supply installed a machine in its Boston store that can make a garment on demand in 90 minutes (with finishing done offline after the garment is created). The machine can be set to make garments all day and night or it can be instructed to make a garment to a specific customer’s design, allowing customers to customize the colors they want in the garment.”

Let’s have a look how 3D printing works…

How does 3D printing works?

3D printing, also known as additive manufacturing (AM), refers to processes used to create a three-dimensional object in which layers of material are formed under computer control  (Wikipedia). According to Berman (2012), 3D printers work in a manner similar to traditional laser or inkjet printers. Rather than using multi-colored inks, the 3D printer uses powder that is slowly built into an image on a layer-by-layer basis. All 3D printers also use 3D CAD software that measures thousands of cross-sections of each product to determine exactly how each layer is to be constructed 2.

3D printing uses such raw materials as plastics; resins; super alloys, such as nickel-based chromium and cobalt chromium; stainless steel; titanium; polymers; and ceramics. Examples of products that are manufactured by 3D printing includes artwork, automotive parts, ductwork for a mobile hospital, sand cores for automotive engine block castings, architectural models, dental bridges, jewellery, ball bearing assemblies, and gear assemblies 4. But how can retailers use 3D printers to their advantage?

3D Printing technology for retailers – a 3D-printed product out of a desktop printer

What are the opportunities of 3D printing technology for retailers?

Cremona, et al. (2016) identified the following points on how 3D printing may influence a firm’s strategy:

  • Process innovation:
    • Delivery time of the product: the time to market is extremely reduced, to the extreme that it might become real time.
    • Product development process: is optimized because adjustments are made in a faster and less costly way.
    • Quality and flexibility: is under the control of the retailer with 3D printing.
    • Satisfaction of the single customer demand: personalized products are added to the platform.
  • Customer’s value:
    • Brand awareness: a close collaborative relationship is established between the retailer and the customers thanks to usability testing.
    • Customer’s loyalty: offering customized, personalized products may help clients to feel special.
  • Product platform enhancement:
    • Pushing the limits of traditional manufacturing machines: now new products can be developed also in a different approach and materials are added instead of subtracted.
    • Personalized modules: products can be designed and delivered exactly how the customers want them.
  • Sustainable competitive advantage:
    • Differentiation strategy: carrying out projects on demand makes the retailer to perform a differentiation strategy. It aims at delivering the most technologically advanced product, which is a unique solution with a unique design for each customer.
    • High specialized production know-how: allow companies to actually integrate 3D printing in the product life cycle. In doing so, an additional service is provided.

The most important strategic advantages that 3D printing offer small local retailers are customization, personalization and control over the supply chain. But what are the pitfalls of 3D printing?

What are the pitfalls of 3D printing technology for retailers?

3D printing is in the introduction phase of its life-cycle in the retail industry. Subsequently there will be a lot of surprises (good and bad) as the technology gets adopted more widely.

Shaleen recently blogged in inkjetwholesale.com.au the following of disadvantages of 3D printing:

  1. Scale and size limitations – you can’t print multiple objects of the same type at the same time.
  2. The absence of economies of scale – because every object or product is printed individually.
  3. Cost of buying and setting up a 3D printer – the initial cost still remains something of a roadblock for most businesses and individuals.
  4. 3D printed objects may require heavy duty post processing – it isn’t only the lack of polish that is the problem but also the possible dimensional inaccuracy.
  5. Large scale adoption of 3D printing will result in significant job losses – every new invention ends up taking away jobs amongst the masses.

According to Beck and Jacobson (2017), legal implications may include what is exactly a product, who is the manufacturer, what is the marketplace, and who should be potentially liable for a defective 3D-printed product (once “product” is defined).

At the end of the day, the most important aspect of 3D Printing technology for retailers is whether the customers will accept or reject it.

What do customers think of 3D printing technology in retail stores?

Retail Customer Experience recently reported results of a survey by self-service solutions company Interactions on what shoppers want from retail technology. The study, “What Shoppers Want from Retail Technology,” surveyed more than 1,000 adult shoppers. Of those polled, 84 percent expect retailers to successfully use tech features and functionality to boost the shopping experience and 62 percent are motivated to shop after an initial human greeting when entering a store. Importantly is what the respondents said about 3D printing in shops…

“According to the survey, 95% of shoppers said they were eager to buy products that were 3D printed, and 79% said that they would even spend more money at a store that offered product customization through 3D printing.”

Wow, really? I think we should end (or start) here…

Concluding

Lastly, 3D printing technology for retailers is a genuine disruptive digital technology that may (or will) turn the retail industry upside down. There are many recent examples of disruptive technologies that changed the rules of the retail game. As the costs of buying and setting up 3D printing technology are getting less, more retailers will adopt the technology. Indeed, if you invest now in the technology, you’ll be an early adopter and enjoy (localized) market leadership. Consequently, you’ll have to battle through the growing pains of the technology. On the other hand, by waiting a bit longer, laggard retailers my get 3D printers for a bargain, but at that time, probably, the customers will already be with the pioneers.

Video: The 3D printing process

Notes

1 Li, Y., Linke, B.S., Voet, H., Falk, B., Schmitt, R. and Lam, M. 2017. Cost, sustainability and surface roughness quality – A comprehensive analysis of products made with personal 3D printers, CIRP Journal of Manufacturing Science and Technology, 16:1-11.

2 Berman, B. 2012. 3-D printing: The new industrial revolution, Business horizons, 55(2):155-162.

3 Cremona, L., Mezzenzana, M., Ravarini, A. and Buonanno, G. 2016. How additive manufacturing adoption would influence a company strategy and business model, MIBES Transactions, 10(2):23-34.

4 Conner, B.P., Manogharan, G.P., Martof, A.N., Rodomsky, L.M., Rodomsky, C.M., Jordan, D.C. and Limperos, J.W. 2014. Making sense of 3-D printing: Creating a map of additive manufacturing products and services, Additive Manufacturing, 1:64-76.

5 Beck, J.M. and Jacobson, M.D. 2017. 3D Printing: What Could Happen to Products Liability When Users (and Everyone Else in Between) Become Manufacturers, Minn. JL Sci. & Tech., 18:143.

Images and video

  1. Commons.wikimedia.com; https://commons.wikimedia.org/wiki/File:3D_print_in_process_(9437659715).jpg
  2. Proto3000

Retail and the Internet of Things

The Internet of Things (IOT) may be an opportunity for Bricks and Mortar retailers. The proliferation of connected devices coupled with less-expensive technology platforms can be used by retailers to get customers back into their shops…

Jonathan Gregory, Managing Director – Accenture Strategy says IOT offers retailers opportunities in three critical areas: customer experience, the supply chain, and new channels and revenue streams.

Before discussing the opportunities of IOT, we must first explain what IOT is.

What is the Internet of Things?

There are many complicated, high tech definitions for the IOT. However, Jacob Morgan contributing to Forbes puts it simply – IOT is the concept of connecting any device with an on/off switch to the internet (and/or to each other).

How many things can you think of that has an on/off switch? In your home – TV sets, air conditioners, lights, alarms, stoves, geysers, garage doors – the list is never ending. Now imagine connecting all these devices to your smartphone or, connecting them with each other.  And then connecting everything with other persons…

The IOT is a giant network of connected “things” (which also includes people).  Hence the relationship will be between people-people, people-things, and things-things, suggests Jacob Morgan.

Let’s get back to the opportunities that IOT render for retailers.

What opportunities do the Internet of Things offers retailers?

The author of this blog has previously mentioned the challenge that Bricks and Mortar retailers have to stay competitive in the digital economy (http://bricks2clicks.co.za/retailers-can-remain-competitive-turbulent-times/). How can the IOT help retailers with their activities?

Customer experience

The customers of retail are adopting digital devices at a staggering rate. They are eager users of smartphones, tablets and digital watches.  Digital devices make their lives easier, and they want the same experience from them in shops as what they get at home or at their workplaces.

“The digital transformation of retail is driven by customers” says Tony Stockil, CEO and Founder, Javelin Group. Most customers want to experience shopping as part of their entertainment.  Shopping is now a form of entertainment, available 24/7, wherever people are. Retailers therefore need to ensure that the brand experience is seamless and constant at all touch points.

James Wilson, Baiju Shah and Brian Whipple did an open-source analysis of IOT user behaviour (“How People Are Actually Using the Internet of Things”, HARVARD BUSINESS REVIEW, October 28, 2015). They found that consumers want an IOT that provides personalized services that can be adapted to different contexts.

The data show that the most heavily used IOT programs are ones that make home life easier, more distinctive, and more pleasant. According to the results, customers show a big preference for services that don’t require them to go out of their way to make something work.

The supply chain

Connected devices and products provide retailers with the opportunity to help optimize operations in the face of a more complex supply chain, increasingly important digital channels, and a more demanding customer.  By utilizing the IOT, managers can track inventory more easily, and adjusting pricing in real time using smart tags.

IOT allow small retailers operating an eCommerce channel to automate their warehouses. By upgrading to automate warehouse retailers will be able to process orders rapidly, accurately, and in real time says the OPEX Corporation. The upgrading may put retailer’s service and standards on par with the “big boys” in their retail sector. The cost benefits of a goods-to-person picking system are that it saving time and it is accurate. The system ensures getting the right product at the right time at the right place.

Automated warehouse system

Automated warehouse system

Creating new channels and revenue streams

The power of the IOT lies in the opportunities it presents to retailers to create new revenue streams or build entirely new channels. As such, household appliances, home security and comfort products, even health and wellness products are all becoming part of the IOT ecosystem.

Some retailers are taking further advantage of the wide array of connected products by becoming an integration “platform.” According to Jonathan Gregory, the idea behind these platforms is to make it easier for customers to make all of their in-home devices talk to one another.

Grocery retailers may partner with the suppliers of connected platforms that would give them  direct channel to customers. Subsequently  a potential gold mine of customer data can be created – information associated with almost every aspect of the household, from utility usage to consumption trends.

What are the dangers of the Internet of Things?

Jason Bloomberg, President of Intellyx writing in Wired, gives seven reasons he thinks the IOT is doomed:

  1. Security – with products and people connected, savvy hackers can easily access important information about you and the way you live.
  2. Privacy – it is about ‘Big Data’. Therefore, the more IOT you have, the more Big Data they collect, and the more Big Data they collect, the more they know about how you behave.
  3. Digital fatigue – too much social media, too many smartphones, too many YouTube videos to watch. There are also too many apps to download, too much of everything digital and wired and online.
  4. Ecosystems – with the IOT the battle is starting again to dominate this technology ecosystem. There are many dealers, both large and small,  trying to establish a foothold, hoping to create their own ecosystem.
  5. No Killer App – so far, the IOT has no Killer App. However, the Killer App could be just around the corner. They have a nasty habit of appearing on the market suddenly with no warning.
  6. Enterprises will mess things up – for an enterprise to succeed with the IOT or any other part of their Digital Transformation initiative, there are no shortcuts – only hard work.
  7. Rather put customers in control of the IOT – let the consumer control the security of each device. Let them determine what data the devices upload to the Big Companies.

Are you ready for the IOT?

Customers want IOT programs that make home life easier, more distinctive, and more pleasant. Also,  the IOT gives small retailers the technology to do their logistics more efficiently and cheaper.  Further offer the IOT retailers the opportunity to collect data from their customers at their homes and place of work.

There are however a couple points about the IOT that should be considered before using it:

  • Is the IOT system developed and secured enough to use without facing financial of legal liabilities?
  • Are you certain that by using the IOT it will be done ethically?

Lastly, let’s hope that the IOT will add value to both retailers and their customers not long from now…