Tesco has just announced it is trying out 3D printing technology for its chain of stores. We ask a few questions around it: What can it do for Tesco's brand? What are the implications for business? How is this likely to expand?
Firstly, let's get some context. 3D printing is very hyped at the moment – from artwork to practical applications like prosthetics, machine parts, implants, prototypes and even whole houses. The idea that a business, NGO or individual can print out fully-functional pre-designed objects, that harness the power and intricacy of a computer-generated model (cf. a plastic straw with water-filtering core printed inside; a house designed using biochemical algorithms), is certainly revolutionary for manufacturing. Even if it is not, as some have claimed, "bigger than the internet."
The controversy around, and dangers of, mass-production and replication have been extensively laid out elsewhere, especially when it comes to weapons production such as guns and knives. While the debate globally about how best to regulate and monitor such uses continues, it's clear also that mass production can be used for tremendous good.
Enter Tesco. What's a supermarket doing with 3D printing? As a global chain touching millions of shoppers across UK, Europe and Asia (75m shopping trips/week, according to its site), it has the power to do good in its own way. Paul Wilkinson, the Innovation Ambassador who is overseeing these tests, mentions three potential uses in-store: personalised gifts, child-designed toys and repairs for broken items. This last sounds incredible! Imagine taking in your old 1997 Black and Decker and, finding nowhere that will replace its loose power connector cable, printing a new, perfectly-fitting spare one direct from its original design. Off you go.
The real threat comes to high-street DIY/repair stores like Timpson's (in the UK) and, to a lesser extent, B&Q. For our global readers, Timpson is a fondly-held chain of shoe repair, key-cutting and knick-knack engraving shops around UK and Ireland. Its store-fronts are usually small, but it's been around as a family business since 1865 and its generous support of employees ("happy staff make happy customers") have regularly earned it a place in The Sunday Times' Top 10 Companies to Work For. Just as we have witnessed the "death of high-street" or purely retail stores (Jessops, Woolworths, HMV) thanks to the convenience of buying online, so the convenience of repairing or modifying physical objects while shopping for milk will likely hurt local repair shops. The question of when depends on how quickly Tesco's 3D printing moves from plastics to metals.
For big DIY stores, like B&Q or Home Depot, though they may find sales undercut at the tool retail end, unless Tesco completely changes its model from accessible local stores and superstores with small goods to huge, more disparate warehouses from which customers are happy to carry hefty building materials, they should be safe. Such a shift seems unlikely.
How is this likely to expand, then, and what are the lessons for brands? Firstly, Tesco's move demonstrates strong principles for retail leaders – be useful to customers, be ambitious with your brand and be innovative with your space. We have seen Burberry leading the way for fashion, blending the physical and digital experience; now Tesco is doing the same for the convenience sector.
Secondly, experiment with new technologies. 3D printing is not an immediately obvious move for supermarkets with the use cases that are touted in the media. But, just as Apple saw the advantage of being the distribution network for apps, Tesco will own the distribution network for small, cheap household parts. The opportunities for its supplier partners are attractive.
Thirdly, don't compete: make your own market. While its main UK competitors, Sainsbury's and Asda, wage constant price wars on supermarket items, Tesco is reaping profits on a global battlefield all of its own, alongside Walmart and Carefour. Easing this cross-market stretch is both a healthy approach to technology and a smart brand strategy that complements its business goals, carrying it beyond just groceries to becoming the ultimate convenience brand for daily life.
Michael Quirke is a Consultant at Interbrand London.