{"id":4038,"date":"2013-11-05T14:12:23","date_gmt":"2013-11-05T14:12:23","guid":{"rendered":"https:\/\/get3dsmart.com\/Stagingsite\/\/\/?p=4038"},"modified":"2017-07-11T14:27:54","modified_gmt":"2017-07-11T14:27:54","slug":"walmart-3d-printing-2020","status":"publish","type":"post","link":"https:\/\/get3dsmart.com\/Stagingsite\/2013\/11\/05\/walmart-3d-printing-2020\/","title":{"rendered":"Meet 3D Printing’s New Boss: How Walmart Could Own 3D Printing By 2020"},"content":{"rendered":"

This is the last in a series of articles about how retailers could leverage 3D printing to grow their businesses and gain a competitive advantage. <\/span><\/p>\n

In the past I wrote about specific retail categories and made the case for one or more players in that niche. Throughout the series I\u2019ve mentioned mass market competitors like Amazon and Walmart, but in the finale I\u2019m focusing on one of them, making the case for the world\u2019s largest retailer.<\/span><\/p>\n

All along I\u2019ve written about real world products that could be 3D printed and sold online and in-store. From auto parts, to vacuum accessories, shower heads, light switch plates, christmas ornaments, phone cases, fishing gear, housewares and more, there\u2019s a lot that can be 3D printed now and the technology is evolving fast. Databases full of digital products – potential new SKUs – will be available soon.<\/span><\/p>\n

I\u2019ve noticed an important trend when doing research on different retail markets. Usually there will be one or two \u201ccategory killers\u201d in each segment. Then Walmart, Amazon, and eBay usually round out the top five.<\/span><\/p>\n

One of the keys with 3D printing is to manufacture as close as possible to the point of need. Not everyone will print everything at home. Retailers with brick-and-mortar will once again have a major advantage. Walmart has over 11,000 stores worldwide. They’re the big dog. While many specialty retailers could sell a line of 3D printed products in their niche category, Walmart will sell in ALL all of them, at a colossal scale.<\/span><\/p>\n

Why 3D printing? What if in seven years, the market for 3D printed consumer products was somewhere north of $5 billion and growing…fast. What if Walmart could get $400 million\u2019s worth of market share by then? What if they found that offering 3D print services could assist their mobile efforts, defend against showrooming, and reduce shrink? Wouldn\u2019t they at least think about it?<\/span><\/p>\n

They’re doing more than that…they’re already offering a 3D imaging and printing service in-store. Walmart is recently launched a test at the York store of its UK affiliate, Asda. Regardless of whether the test is successful, Walmart is learning, and soon they will put that knowledge to work. Specialty retailers who wish to compete for digital sales in their category must now run with the big dog…and the race is on.<\/span><\/p>\n

Walmart\u2019s sheer size is hard to fathom. They generated $470 billion in revenue last year. If Walmart were a nation it would have one of the largest economies in the world. Eight cents of every dollar generated in the US is spent at Walmart. They handle over 7.2 billion transactions yearly equating to more than 1 million transactions every hour of every day.<\/span><\/p>\n

Consider the grocery business for a moment. Walmart opened its first \u201csupercenter\u201d in 1988, combining general merchandise with a full-scale supermarket. In 25 years, they\u2019ve built over 3,100 supercenters and now own a commanding 38% share of the US grocery business. Prior to their entry, Cincinnati\u2019s Kroger Company was the US\u2019s largest grocery retailer. They now have a nine percent share in of a market in which they were once the category leader.<\/span><\/p>\n

How did Walmart do it? Part of it is location and part is price. Over 90% of people in the US live within 15 minutes of a Walmart. Their real estate is a significant competitive advantage. But, to achieve their goal of \u201ceveryday low prices,\u201d Walmart was and is intensely focused on reducing costs. <\/span><\/p>\n

Some of the savings come from negotiations with suppliers. Walmart\u2019s strategic sourcing goal is to find products at the best price from suppliers who are in position to meet their demand. \u00a0Walmart establishes partnerships with most of their vendors, offering long-term relationships and high volume purchases in exchange for low price. <\/span><\/p>\n

To remain competitive, many Walmart suppliers produce abroad and now, <\/span>According<\/span><\/a> to Charles Hood, author of the book, Walmart Egonomics Always, \u201cover 90% of the products Walmart sells are manufactured in foreign facilities.\u201d<\/span><\/p>\n

As far back as the 1980\u2019s, Walmart was busy computerizing its point-of-sale systems and creating its own private satellite network. Doing so gave the company access to all kinds of data about products and the customers who purchased them. Now Walmart has the largest information technology infrastructure of any private company in the world. <\/span><\/p>\n

Walmart leverages data to drive cost out of its supply chain. State-of-the-art technology allows Walmart to accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, and manage customer relationships.<\/span><\/p>\n

From the size of its orders, to the packaging used and delivery method, Walmart carefully orchestrates the way it purchases and receives product. The company has optimized its internal distribution system using data to drive logistics and store fulfillment. Cross docking, distribution and transportation management keep inventory and shipping costs down while improving speed to market.<\/span><\/p>\n

Today, Wal-Mart\u2019s supply chain strategy delivers several competitive advantages, including lower product costs, reduced inventory carrying costs, improved in-store variety and selection, and highly competitive pricing for the consumer.<\/span><\/p>\n

Then Along Came Amazon<\/span><\/h4>\n

With the same promise of long-term partnerships and high-volume purchases, they were able to achieve the same low product cost. With an eCommerce business model, they didn\u2019t need thousands of stores, greatly reducing their logistics and inventory costs. Then Amazon evolved into a marketplace, allowing third-parties to sell on its network and drop-ship their products directly to consumers. This differed most of the cost and greatly improved the variety and selection of Amazon\u2019s products.<\/span><\/p>\n

Amazon launched in 1995 and in less than 20 years has grown to a $61 billion business. While they\u2019re still dwarfed by Walmart\u2019s size, Amazon has found its own competitive advantages, including the practice known as showrooming, where a consumer examines a product in-store and purchases it elsewhere, online. In fact, in one recent survey, 64% of consumers polled said they had showroomed Walmart and purchased at Amazon. Another recent survey of smartphone users suggested that nearly 50 million people access Amazon each month and \u201conly\u201d 16.3 million access Walmart.<\/span><\/p>\n

While the proliferation of smart devices has made showrooming practical, online commerce in general and the mobile channel specifically still represent a big opportunity for both companies. <\/span><\/p>\n

Walmart\u2019s eCommerce sites will generate approximately $9 billion in revenue this year and roughly 40% of Walmart\u2019s online traffic this holiday season will come from mobile devices. With that kind of opportunity its easy to see why it\u2019s <\/span>estimated<\/span><\/a> that Walmart will spend $300 million on its eCommerce and mobile platforms this year alone.<\/span><\/p>\n

Could 3D Printing Play a Role In Mobile?<\/span><\/h4>\n

Walmart is already driving up to 40% of its traffic from mobile and the channel will quickly become even more important. Smartphones and tablets are quickly replacing PCs as the primary tool for web browsing (and online purchases.) By 2016 L2ThinkTank.com <\/span>predicts<\/span><\/a> mobile commerce will drive $31 billion in direct revenue, and will also influence another $689 billion in offline, store sales. If retail is a four trillion dollar business, within three years mobile could impact nearly 18% of all retail purchases. <\/span><\/p>\n

Retailers like Walmart are doing everything they can to build their mobile presence. They\u2019ve built dedicated apps, they deliver mobile ads and coupons, they\u2019re advertising their mobile platform, and including interactive features in their point-of-purchase marketing. Some are even redesigning their entire stores around the <\/span>mobile experience<\/span><\/a>.<\/span><\/p>\n

Mobile is also having an impact on payment. Over the last thirty years, the adoption and use of credit cards has grown to the point where it is now nearly ubiquitous. Merchants like Walmart pay a percentage of each transaction in credit card \u201cswipe fees.\u201d All told, swipe fees cost retailers and consumers over $50 billion in the last year alone. <\/span><\/p>\n

While retailers are pitching mobile payment as a convenience for their customers, they (and telecoms, among others) are also looking at it as a way to circumvent the banks charging the fees. As mobile payment continues to roll out, retailers will place even more emphasis on programs that drive mobile eyeballs.<\/span><\/p>\n

Its a Web-Based Service<\/span><\/h4>\n

A 3D printing service offered by any major retailer would require a web-based system to manage uploads, sales, deliveries, and tracking. While some products would actually be ordered through store point-of-sale (POS) systems, its more likely products would be ordered via the web (from home) or a mobile device (in-store.) It\u2019s also conceivable that mobile devices could be used to receive product (unlocking bins where finished products are kept prior to pick-up?)<\/span><\/p>\n

App Integration <\/span><\/h4>\n

Further, as apps and games continue to proliferate, a retailer like Walmart would have the opportunity to integrate their services. For example, consider the \u201cLets Create! Pottery\u201d app from Infinite Dreams. It allows you to design a piece of pottery and submit the design for 3D printing. <\/span><\/p>\n