Innovation is typically synonymous with the concept of “thinking outside of the box”, but in this case e-commerce is experiencing a subtle revolution by focusing on what is possible “inside the box”. Said “box” is the 3D printer, itself, and there exist big time opportunities that present themselves when combining digital designs with physical substrate. How big is big? Well, estimates from industry groups indicate that 3D printing will become a $3.7 billion business by 2015.
A BRIEF INTRO TO 3D PRINTING
For those unfamiliar with 3D printing, enjoy this brief introduction and video tutorial:
As noted in Avi Reichental’s video tutorial, 3D printing has the power to make anything possible by democratizing creativity and localizing (as in DIY at home) manufacturing using many types of materials through an additive vs. subtractive process.
GIVING A FRESH LOOK TO E-COMMERCE
A wonderful example of how these capabilities are transforming e-commerce is the case in the cosmetics industry of Mink.
Here’s a little secret that the cosmetics industry doesn’t want you to know: the base materials for most makeup, from the cheapest lip gloss to the highest-end eye shadow, is basically the same. The markup comes from either the brand name or a lack of scale for a particular color. Larger outlets like CVS or Walmart buy only the hues that sell the best so they can order in bulk and score a discount. Mink hopes to bring the entire industry to its knees by eliminating all that nonsense. It’s a 3D printer that mixes ink with powder, cream or whatever other raw material necessary to create an endless variety of cosmetics on your own desk.
Mink is the brainchild of Grace Choi, a self proclaimed serial inventor who came up with the idea while at Harvard Business School. The hardware itself is proprietary, but it uses the standard image editing software already on your computer to actually print. You can pick a color from any where — a website, a YouTube video, a photo you took — and then drop the hexcode for the color into Photoshop or even MS Paint. Fill a canvas with the color of your choice, hit print and wait just a few minutes while Minx mixes up a fresh batch of makeup just for you. The appeal is obvious: consumers could have an entire custom cosmetic store at their disposal in a small desktop printer.
E-COMMERCE OPPORTUNITIES ABOUND WITH 3D PRINTING
As the price of 3D printers continues to fall, new opportunities are emerging, especially for ecommerce vendors. Several dedicated online stores sell 3D printers, materials, and finished products, while others see marketplaces for finished products as the best business model. Last year, eBay rolled out an iPhone application, eBay Exact, that allows customers to buy customizable printed merchandise from three 3D printing companies. Walmart also has a 3D printing service pilot program. Etsy has 13 pages of 3D-printed objects for sale.
Certainly the bigger e-commerce players are looking beyond just selling physical products, taking the 3D printing concept into the service arena. If successful, this approach could radically change e-commerce, with merchants selling designs that allow consumers to manufacture their own customized products.
Earlier this year, Amazon established a 3D product store with a partner, 3DLT, which now offers 73 products on Amazon — mostly jewelry and accessories for electronic goods. Amazon also sells 3D printers and supplies. While 3D printers used to cost several thousand dollars, several models now sell for under $600, making it feasible for people to buy them for home use. 3DLT is also a 3D printing template marketplace. It partners with independent designers who create the 3D printable files that 3DLT sells on its website to customers who download them and print products on their home 3D printers. For those without a home 3D printer, 3DLT has a partner network of over five hundred 3D retail printers where individuals can bring the files to be printed.
Several online marketplaces devoted exclusively to 3D printed goods (versus templates sold by 3DLT) also exist. Shapeways operates the world’s largest marketplace for 3D printed products. Designers, and hobbyists send their designs to Shapeways, which uses its in-house printers to create physical products. If the customer wishes to sell products in addition to creating just one, Shapeways adds the product to its online marketplace, where others can buy the goods. Shapeways handles payment processing and shipping.
Sculpteo also allows individuals to buy and sell designs as well as offering a printing service. Sculpteo reckons it has invented a new form of e-tailing by enabling designers to sell customized 3D printed objects directly to consumers and enabling e-commerce websites to become real manufacturers. Sculpteo’s 3D-printing Cloud Engine eliminates the need to use third parties to promote, market and manufacture goods that are directly delivered to consumers, as they can easily operate their own online shop directly from their own website.
ARE WE WITNESSING THE RISE OF CREATIVE COMMERCE (C-COMMERCE)?
According to Forbes, e-commerce is moving beyond just doing better of the same – it will be different. It will be a shift from a two-sided marketplace (BUY and SELL) to a dynamic makerplace (CREATE, BUY and SELL).
The growing Maker Movement, as spearheaded by the likes of Maker Media, and the trend toward participatory design are early signs of the shift to creative commerce. Crowdsourcing of designs is already quite common, and there are lightweight customization platforms that allow consumers to give T-shirts or sports gear a personalized design, for example, using platforms like Threadless, CafePress, and NikeID. Some of the most successful products of the past decade used community insights to drive product innovation, such as the revival of LEGO Mindstorms.
Creative commerce has existed for some time in a host of offline capacities—custom tailoring, craft workshops, farm-to-table. Its rise, however, is fueled by a combination of timely factors: open source, the accessibility of 3D printing, and the increasing connectedness of the Internet and the ease with which you can find your niche (shout out to Chris Anderson’s Long Tail).
DESIGN, DELIVERY AND OTHER DYNAMIC CHANGES TO E-COMMERCE
Designs for Sale:
Here’s where 3D printing might one day blow away manufacturing of the kind we’ve been used to since the Industrial Revolution shook up agrarian life in the early 19th century. 3D printing is creating a market in designs that are meant to be printed by the buyer — or a third-party manufacturer unrelated to the designer.
The end product isn’t sold — it’s the design that’s sold, along with a license for it to be printed. It’s like the demise of hard copies in the book, music and video industry — the intellectual property is all.
Buried in corners of the Internet are marketplaces where budding designers are selling their plans for printing at home or in the workplace. Customers can use their own printers or they can buy the design and have it printed on the marketplace’s printer and then delivered.
The printer offered at Staples is the Cube, made by 3D Systems, which pitches its Cubify website as a marketplace with departments such as Home, Fashion, and Toys & Games. For example, a 2×3-inch planter in the Home section, designed by Phroid, runs $5.00 if you print it yourself. Alternatively, you can pay $40.55 to have it made to your materials specification and color.
With the very real possibility of 3D printing proliferation, the giants of e-commerce can look forward to a slimmed-down supply chain which works on the just-in-time principle.
At a time when Amazon is making considerable investments in order to offer its customers delivery in under 24 hours, 3D printing services may be on the way to shortening the delivery chain. Amazon‘s Prime service offering free two-day shipping for eligible purchases is the company’s main trump card in relation to rivals such as eBay and Wal-Mart. Now, however, as 3D printing techniques are being perfected, the traditional supply chain based on warehousing goods is likely to change. However there will have to be many logistical and technical improvements before any real paradigm shift occurs in e-commerce order fulfillment.
One of the biggest competitive challenges in the e-commerce sector is delivery time, and the main platforms rely on networks of connected warehouses or else go into partnership with retail chains. The contest for best performance calls for constant innovation. For the moment, given the limited capabilities of 3D printing and the narrow range of materials that can be used, the current distribution model is not under serious threat.
Intellectual Property & Copyright Infringement: 3D printers have opened new doors to innovation but concurrently raised questions re: copyright infringement. According to Forbes @ CES 2014, one product which will soon change the world is 3D printing. Yet along with this innovation, 3D printing is facing legal challenges. Established players in manufacturing are going after user-generated 3D file sharing sites, arguing that their intellectual property is ripped off by home printers. But in many cases, home 3D printer aficionados are building out and improving upon original designs. Our copyright laws are unclear about the degree to which 3D designs and software are protectable, and what constitutes infringement.
Thingiverse, a website that allows people to post and share designs for 3D printers, has been fielding Digital Millennium Copyright Act takedown notices since at least 2011. Rights holders need to move away from suing or threatening to sue every potential copyright violator, and embrace a system that makes it easy and affordable for at-home 3D printers to access legal and licensed designs. iTunes’ licensing model is a good example. Just as the recording industry has adapted to digital music downloads and found revenue in other areas like touring and merchandise, the creative content and manufacturing industries will have to adapt to 3D printing.
At The DBG Agency, we have been fortunate to work with both major players in the music industry and start-up companies in 3D printing. There are some similarities that are simply uncanny. Physical product manufacturers and multichannel retail platforms cannot allow themselves to make the same mistakes that ravaged the music industry as a result of its refusal to embrace, early on, new digital content / monetization models and recognize that the tail was now wagging the dog in terms of both consumers and artists vs. labels and distribution partners.
Change is coming to e-commerce thanks to 3D printing. D2C and retail players will either innovate and adapt, as is the case with Amazon, or they will be left wondering what happened to their place in the digital ecosystem as was the case with so many in the music industry.