3-D printing poised to transform retail, in-store and online

For years 3-D printing has largely been a novelty, a niche experiment for churning out cheap plastic toys. But as 2015 kicks off, 3-D printing looks to be on the rise and how retailers react to the way it changes their industry could define whether it's a blessing or a curse.

Gartner's first ever forecast for the 3-D printer market under $100,000 predicted that printer shipments will double in 2015. A recent study from ReportBuyer suggested that global demand for 3-D printing could rise more than 20 percent each year to reach $5 billion by 2017.

For all that hype, though, we're still a long way off from consumers being able to print their own iPhones in the home. So what's the current basis of all that growth?

One way 3-D printing is having an immediate impact, according to 3DLT Co-founder and CEO John Hauer, is in prototyping. Printers may not be able to spit out full-fledged products just yet, but what they can do very well is create prototypes to provide both retailers and consumers a better idea of what a final piece of merchandise will be like.

"Products are getting to market quicker, arguably as better-designed products with more end-user feedback because they are able to play with a working model of the product," Hauer told Forbes. "We really don't believe that 3-D printing will replace mass manufacturing, but instead that [they] will coexist."

That's good news for both retailers and manufacturers. Retailers can cut down on supply chain costs by ensuring the quality of products before they order them en masse, while manufacturers don't have to worry about stores printing out merchandise at scale on their own.

Prototyping could even help combat showrooming. Digital media like books, movies and music don't really require any physical interaction for buyers, and can therefore thrive in the online world, but interacting with physical products is proving an increasingly important factor in purchase decisions. Having the option of touching even a rough prototype could be enough to draw customers offline and in-store when it comes time to buy.

Staples has been one of the leaders of 3-D printing in retail, offering printing services and selling consumer printers.

But some stores are already looking at 3-D printing differently, not as a way of cranking out products and prototypes to put on the shelves, but as a service. Staples began offering 3-D printing to its shoppers in two stores in April 2014, and UPS followed suit later in the year by expanding its program to 100 U.S. locations.

For retailers, having 3-D printing stations allows them to vastly expand the products they're able to offer customers with very little additional overhead. Merchandise essentially exists as plans in the cloud, taking up no extra shelf or storage space until it's called down by interested customers. Consumers get what they want, when and where they want it, and can even tailor products to their needs (something they may be willing to pay extra for) while stores expend no additional supply chain costs until the demand is there.

3-D printing as a service could be particularly profitable for large retailers like Walmart. There are a lot of niche retailers who might be able to provide a line of printed products in one category, but giants like Walmart would be able to offer them across almost all categories, providing the most upside for a relatively minimal investment.

And of course, there's the business of selling the printers themselves. It will be a while before 3-D printers are commonplace in offices or homes, but companies like MakerBot are taking new approaches to the market to introduce the technology to the average consumer.

While MakerBot lives mostly in the e-commerce realm, it opened a handful of brick-and-mortar stores recently which allow shoppers to see 3-D printers in action, buy 3-D printed products and buy printers. Letting consumers see how everything works in person helps demystify the 3-D printing process, but MakerBot also launched its Apps Portal last month, making the sometimes daunting prospect of 3-D printing even more accessible.

The partnership the company announced with vacuum manufacturer Hoover in December also serves as a prime example of how 3-D printing can be put into practice right now. Hoover's Air cordless vacuums already come with the usual attachments, but buyers can now order additional upgrades for their machines, printed on-demand by MakerBot. Hoover said the system is perfect for acting on good ideas that narrow parts of their customer base have asked for, but just don't justify more widespread production.

"3-D printing allows us to be more nimble and respond to consumer accessory and customization needs quicker than typical manufacturing processes might allow," Hoover's VP of Product Development Paul Bagwell explained in a statement.

That's the role 3-D printing could fill particularly well for the average retailer: Providing specific products to niche groups of their customer base. Smaller businesses will need to balance the cost of investing in printers and printing materials with the volume of requests they expect to get from customers. If they already serve a particularly narrow customer base, a few outlying orders may not be worth the cost.

And how will 3-D printing affect the retail industry beyond traditional brick-and-mortar stores? Amazon launched its online storefront for 3-D printed products back in March 2014, and began selling 3-D printers the year before. For some that meant another baby step, one more place to buy expensive printers and cheap plastic toys. But for Dominic Basulto, an Innovations contributor for The Washington Post, it signals what could become a fundamental shift in online strategy.

Amazon launched its 3D Printing Store last year, and it could be a sign of change to come for online retailers.

Currently, Amazon functions like all e-commerce businesses: It keeps a whole lot of merchandise in a whole lot of warehouses, and when someone places an order they ship that merchandise as fast as humanly possible. That strategy has worked well so far, and Amazon has perfected its model to the point that it's incredibly efficient.

But fast forward to a world where 3-D printers are as commonplace as inkjets and those warehouses may not be necessary. After buying their printers and printing materials from Amazon, customers could simply download a 3-D design file and print everyday consumer products themselves. Rather than selling actual products, Amazon could well find itself with nearly infinite digital shelf space selling designs for consumers to print themselves.

It's an extreme image of retail's future, and there are a lot of factors that stand in the way of it, the prohibitive cost of 3-D printing and its current limitations chief among them. "Print speed, material offering—metals in particular, ease of use, and cost are all areas in the field that are being improved and developed further due to feedback from customers," Kyle Squillace, a designer at Impressive Prototypes said. "All of these will need to be greatly improved to truly make the 3-D printer a mass market product like the inkjet printer has been for many years."

With 3-D printing being used to create parts for vacuums, airplanes, cars and even the human body, it's a future that forward-looking retailers should start preparing for.