8/04/14

Retail's next dimension: 3-D printing

Online merchants have begun taking a new interest in the manufacturing technique, finding it allows them to slash prototyping costs and quickly customize items to shoppers’ tastes.

Amy Dusto , Associate Editor

They may not have flying cars, but some households today contain box-like machines able to spit out custom objects on-demand in a manner reminiscent of “The Jetsons” instant meal-producing kitchen appliance. Although nowhere near ubiquitous, those machines—3-D printers, which follow digital blueprints to build items layer by layer—are becoming more commonplace, as they are now sold online at Amazon.com and in stores like Home Depot and Staples at prices similar to laptop computers. And in recent years, they’ve begun opening up new opportunities for e-retailers.

Theoretically, if every consumer had a 3-D printer at home, the devices could transform how e-retail works: George could buy a suit design online and his home machine would then immediately print him the outfit. That scenario could upend traditional manufacturing processes, putting stores and UPS out of business. However, in reality, retailers and industry experts agree that such a scenario is almost certainly not going to happen—at least not anytime in the near term.

Wouter Nicolai, owner of Netherlands-based 3-D-printed cookie-cutter store Printmeneer, says most 3-D printers available now for home use are highly limited by what materials, sizes and finish qualities they can produce for consumers to take up 3-D printing en masse. But interest is growing. Juniper Research Ltd. projects manufacturers will ship more than 1 million 3-D printers meant for consumer use by 2018, up from 44,000 today; and that the sale of 3-D printers and related materials will grow from $75 million this year to $1.2 billion in the same time frame.

While printing a stylish suit on-demand may be out of the question for now, 3-D printing is positioned to transform the manufacturing process by cutting overhead costs, including on prototyping, labor and inventory storage, and that creates opportunities for e-retailers, says Terry Wohlers, principal consultant and president of Wohlers Associates Inc., a 3-D printing consultancy.

3-D printing has also begun allowing e-retailers to offer personalized items that were not physically or economically feasible to deliver in the past—think a dish with an image of your pet’s face engraved in the bottom. Customizable 3-D printed goods available online today include HeadBobble.com’s personalized bobbleheads—for $79 to $89, the company promises to turn headshot images consumers upload into a figurine within six weeks—and New Zealand-based ODD Guitars’ $3,500 Hive bass guitar, which has a wooden inner core but a beehive-like body of latticed nylon, complete with tiny bees in the hexagonal holes.

“[3-D printing] is developing new businesses,” Wohlers says. “You can do really complex things that you couldn’t manufacture using traditional methods.”

Available only as large, expensive machines when they were introduced more than 30 years ago, 3-D printers now range in size from a few cubic feet that fit on a tabletop to machines that can fill several rooms. They print using all sorts of materials, including plastic, wood, glass and steel. Manufacturers like General Electric, Boeing Co. and medical technologies firm Stryker Corp. use 3-D printing to make tens of thousands of parts, including components of jet engines and hip implants, according to Wohlers.

Overall, the 3-D printing industry last year accounted for $3.07 billion in manufacturing expenses, far less than 1% of the $10.5 trillion spent worldwide on all manufacturing, he continues. But 3-D printing is growing, he says, predicting in the near future it will account for 2% of the pie, and potentially much more over time. Its real value, however, stems from the cost savings of 3-D printing’s faster, on-demand processes that require vastly less labor than traditional manufacturing methods, he says.

What this means for online retailers is that it becomes possible for them now to produce customized products in small quantities, down to quantities of one. And while few physical shops would get enough foot traffic to justify the cost of a 3-D printer to make such products, a retailer selling to the world’s consumers via the web may be able to attract enough orders to justify the cost of a 3-D printer and the materials it uses.

In the world of jewelry and fine art design, for example, creating a custom mold for a prototype can cost $20,000 or more, says Colleen Jordan, founder of Wearable Planter LLC—and that doesn’t include any guarantees that consumers will like it. But 3-D printing allows her to prototype objects for about $100, and the $20,000 that a single ceramic mold would cost is now roughly her entire annual manufacturing budget, she says. She began selling 3-D printed “wearable planters”—small flower pots fitted to pins, necklaces and rings—on Etsy in 2011, and also sells them on her own e-commerce site, WearablePlanter.com.

The opportunity to use 3-D printing to inexpensively create one-of-a-kind items using customer input offers a tantalizing way for online retailers to stand out from the crowd—including physical stores heavily stocked with mass-produced merchandise.

“We are excited by what we can see in the near-term and what our customers can do to play a role in design,” says Petra Schindler-Carter, director for marketplace sales at Amazon.com Inc., which launched its first 3-D printed goods marketplace in July. “There’s now an ecosystem of folks who are independent designers who see this as a real opportunity to make a unique product that brings something to the customer that hasn’t been created before.”

Nicolai of Printmeneer says he receives a couple of custom design requests per week via his Etsy store. “Some of [the customers] are drawn to the cutters because they are 3-D printed, but for most of them it is because the designs are not available elsewhere or can be customized on request,” he says.

Still, retail behemoths Amazon and eBay Inc. are only just getting into the 3-D printing game. Within the last 14 months, both companies have announced new 3-D printed goods categories in their online marketplaces: Amazon launched the category this past July and eBay last year ran a pilot program selling custom 3-D printed objects from the eBay Exact iPhone app.

For Amazon, the move is about the retailer first connecting with 3-D printing experts, then seeing what consumers want from them, Schindler-Carter says. “A big differentiation is the ability for the customer to be an active participant in the creation of the product,” she says. For instance, a shopper could change the dimensions of a piece of jewelry, or perhaps add her name to an iPhone case.

While Amazon so far is leaving the manufacturing work up to its marketplace sellers, it has developed its own customization tool for the product detail pages in its 3-D marketplace, Schindler-Carter says. The tool allows a customer to change attributes of many products, such as the sizes or colors, and view the personalized item from all angles.

“It’s early days for all of us,” she says. “I’m imagining this will allow us to reach a new pool of designers and sellers who can leverage the Amazon Marketplace.”

It remains to be seen how well the 3-D marketplace takes off for Amazon. EBay, meanwhile, stopped allowing merchants to sell 3-D printed goods through its app and has no other 3-D ventures in the works for now, a spokeswoman for the company says, declining to share additional details. Like Amazon, eBay used the pilot project to establish a foothold with some of the top 3-D printing companies—for instance, eBay Exact offered items printed by Brooklyn-based MakerBot and the French company Sculpteo.

Such companies, which often cater to both consumers and businesses by allowing anyone to submit a design for custom manufacturing or selling hobby-sized printers, are proving critical for even the most enthusiastic do-it-yourself sellers to establish a retail business around 3-D printed goods.

Jordan of Wearable Planter sends her designs to the 3-D printing company and online marketplace Shapeways. Shapeways keeps the costs for manufacturing and 3.5% of the additional markup she charges consumers, then ships the finished product to Jordan. Or, if a customer orders a wearable planter from Jordan’s store on the Shapeways web site, she can have it shipped directly to him—though Jordan says she receives only about four orders per month that way. The lion’s share of her sales come in via Etsy, and about 25% through WearablePlanter.com, she says.

In some cases, Jordan does have to finish the items at her studio—most often dying them a custom color and sealing them with varnish. Still, Shapeways is otherwise able to produce and ship out her wares quickly enough that Jordan can safely hold just two weeks of inventory in her studio without running up fulfillment delays.

For Jordan, 3-D printing’s main attraction is the extreme reduction in overhead it brings, including on prototyping, materials, labor and inventory. She doesn’t get too many personalization requests on her wearable planters beyond custom colors, which are easy to manage, she says.

Ultimately, what matters most in her business is not that customers can edit designs, but that she is able to bring her original designs to market in the first place. “Consumers don’t care whether something is 3-D printed or not,” Jordan says. “People don’t really ask how a table was made, they just care that they like it and that it’s useful to them.”

Isaac Katz, a Mexico City-based digital artist who began 3-D printing some of his designs as sculpture and jewelry three years ago, falls somewhere between Jordan and Amazon in his take on 3-D printing. Katz, who sells on Etsy and through his online and physical store Electronic Art Boutique, says that, for one thing, there is no other means of making in the physical world the highly complex, computer-based art he creates. He considers that he needn’t hold much inventory a bonus. Today he must keep about five weeks of stock—equivalent to the lead time he needs to give Shapeways to 3-D print and ship his pieces.

Katz—like Amazon—is also betting that the ability for a customer to customize his products will soon become one of his business’s main attractions. “[Retail] is no longer constrained to one person designing one thing and selling it 10,000 times,” he says. “Instead, you can have 10,000 items, and pick and choose, or have the buyer actually interact with the designer to customize in some way—that’s the future.”

He, too, is building a digital customization tool to make that possible. More than six months in the works, it will do more than allow a customer to change details like color, size or material. The Electronic Art Boutique configurator will allow customers to also change the entire shape of an object.

That’s no simple project. “Changing a 3-D model takes some knowledge and software experience,” Katz says. His configurator, which will be available online and in his store via a kiosk, will simplify that work for the average consumer.

“A lot of wealthy people around the world that want something one-of-a-kind—that’s the low-hanging fruit in the next few years,” Wohlers says. On the other end, 3-D printing cheaper items, like novelty tchotchkes or trinkets, while probably not generating much money today, is helping “to create some critical mass” for the field, he continues. “Most consumer products now—most jewelry, mobile phones, household goods—99.9999% are still made the old way. But that will change over time,” he says.

But e-retailers need not wait. They can already use 3-D printing to save money on prototyping their own products and to produce and sell consumers custom products available nowhere else.

Amy Dusto is a freelance reporter based in Chicago.

Topics:

3-D printing, Amazon.com Inc., August 2014 magazine, eBay Inc., Etsy, WearablePlanters.com

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