Where is the 3D printing market going? In this episode, Tom and Tracy Hazzard tackle the 3D printing market and its future. Consumer versus prosumer, get to hear both sides of the corner from Tracy and Tom as to why they think 3D Systems have moved out of the consumer market and back to their roots of commercial retail. Tom and Tracy also dive into the ecosystems found in the market and how the market can overcome retail cooperation to promote the 3D print-market growth.
Listen to the podcast here:
Consumer Vs. Prosumer
This is the Ask Us Anything segment and this anything is a news watch.
That question is, “Is the future market more consumer or prosumer in 3D printing?”
It’s coming up because of the 3D Systems announcement to move out of the consumer market and not sell the cube. It is to go back to their roots of industrial 3D printing in the prosumer market in general.
The prosumer who are closest to the consumer market they’re going to get. They’re staying more commercial where they’ve been. Their comfort zone, but they’re recognizing the prosumer market is something they’ve decided they need to serve. They’re getting out of what they consider the consumer market with their retail-base cube printers. They’re even getting rid of their Ecosystem too, which surprised me.
It is their version of Thingiverse. There are a couple of things about it. First, consumer versus prosumer. Prosumers are people like us. Even though we bought a consumer-grade printer, we use it for professional use. We are already pros. We are not learning this from scratch. We didn’t buy it at a retail outlet in the sense that we knew what we were buying. We were buying it for business. That’s the market that they’re talking about. Most of the consumer-based products like the Cube, MakerBot, Robo 3D, or XYZ, a lot of them have a retail outlet that they’re selling. XYZ is at Barnes & Noble, Robo 3D is at Best Buy. The Dremel is at Home Depot.
MakerBot is at a couple of places, but they’re at Staples.
They’re at a few places as well. That’s what they’re talking about. I read a report that was saying that the biggest challenge to the 3D print market-growth is retail cooperation. There’s that collaboration and cooperation with the retail market. That’s where they’re all falling right now. It’s where the problem is because you and I know, we’ve worked so much with retailers, how hard it is to make something go at retail, especially when it’s new.
Working with mass-market retailers is no picnic. I’ve compared it to working with organized crime. It’s maybe an overstatement because it’s legal, but believe me, the way they lean on you and push on you. What they make you bend over backward to do for them to just be in their store, they hold the keys to the channel. They soak their vendors for a lot.
You have to already be a strong company. A big player, you have to have deep pockets to be able to handle that. That’s one pressure that they’re seeing and they didn’t understand before because it doesn’t work like that when you sell online or in a dealer situation. Dealers have their margins and situations, but it’s not the way that it happens. You think you’ve got a placement and you think it’s great, then they come back to you and ask you for more money and more money and more marketing dollar kick in and more placement. They say, “By the way, if you don’t kick in more money, we’re going to sell your shelf space to your competitor next season.”
“We ran your product on ads so many times. That’s the good news, we sold a lot. The bad news is, we weren’t as profitable as we should have been.” “It’s because it ran an ad all the time.” They come back and say, “If you want to maintain your floor space, make me hold on my margin. You need to kick in some more money.”
If you’re not established, and a lot of these companies just aren’t established, or in the case of 3D Systems, it’s a division of the company that was being operated with its books and everything. If you’re operating that way, it’s not going to be profitable because it’s hard to understand that. You’re constantly having the parent company kicking in cash to you to help support that type of market.
That company has had a lot of management turnover in a huge amount in 2015. There are even technically interim people running it. Maybe they’ll be made permanent, but to me when I see what 3D Systems has done with the cube is they’re focusing on what the market is. They’re reacting, don’t you think?
It’s a common problem with most companies. It’s common with companies that already have a history of something, whatever that history might be, is for them to contract down to the thing that works before.
It’s their safe zone.
In 3D Systems, their safe zone has always been commercial. Prosumer is just a little on the edge of a commercial for them, it’s not that big a stretch, but they feel comfortable there. When you’re either the interim or the new guy who comes in, you go back to basics. Back to the roots, but in some cases in a fast-growing emerging-market like this, that’s the biggest mistake you can make. It’s my opinion, this is not some marketing report out there or market report that says, this is my opinion from experience doing this for many years. When a company does that, it is short-sighted, and they’re going to have to spend a ton of money later to catch back up.
I share your opinion in this particular case because I believe that the consumer market is a huge opportunity and where the future growth in 3D printing is. That may not necessarily be selling printers, it may to an extent. It probably will grow, but I think there’s a consumer business to be had in people wanting to have 3D printed products printed for them. There’s where the ecosystem comes into it. That’s where I was shocked. They were getting rid of their ecosystem. This is the big piece of the puzzle that’s missing and that nobody is capturing yet.
To tie the two things together, to tie the problem with retail. The challenges were that there aren’t enough skilled designers serving the market and there isn’t enough retail support for it. When you tie those two things together, when you make that connection in your head of the two things, it starts making sense. The problem is, you don’t have designers who understand retail, in a sense. They don’t understand consumer products. Honestly, I’m happy they crashed their ecosystem because it was terrible.
I’m not saying it’s what exactly is needed to be but the infrastructure is necessary for the consumer market to tip. Maybe they didn’t have the right one, somebody’s going to come along and do it, I hope sooner rather than later. I’d love to be a part of that because it’s the future, but when your sales are not going in the right direction, you grew too fast and you have too much overhead, you’ve got to cut. You’ve got to come back to reality. They’re doing what they think they need to do, it’s not a future move.
The reality is as I look at it and say, “This market is going to happen. Someone’s going to wise up and do the smart thing.” I see it on the horizon, and the market is going to tip. When it tips in late 2018 to before the end of this decade, they will have done nothing to continue to build a consumer brand and they’ll be playing catch up. Playing catch up in that market when you have kicked consumers to the curve and said you’re not worth it, it’s going to be hard.
They’ll be starting all over again or they’ll have to be throwing a whole lot more marketing dollars out when they decided to get back into it and have a piece of a pie that’s being established by others.
It would have been safer. It would have been better if you built a better ecosystem that had better products and then pays designers to design and create products in there, not coders, please. Stop hiring coders, they’ve got to be real designers, product designers and get them going in there. That to me is a better way to go and keep up your brand. Step back out of the retail store, because of the problem with the two connections. The connection between product design and retail is that if you don’t support retail, if you don’t know how to support retail and make retail successful, it doesn’t sell itself on the shelf.
That’s the point I wanted to make. You’re right. It’s an unassisted sale environment. I don’t care whether you have them in Best Buy, Home Depot, Staples, or any of these stores. When we went to Barnes & Noble and looked at the XYZ printer, there was one person in the store who knew how to operate and start the printer. If that guy was off that day, they were out of luck, or if he’s too busy doing something and can’t get to it, you cannot expect these retail stores to have enough trained personnel to know. To be able to help people and help sell your product. It’s not making your product look bad when it’s not your product. This is why the dealer network and that support is critical for a lot of people, especially the school systems. School systems are not going to go to retail anyway.
It’s not a bad thing having it there, but you have to recognize it for what it is. We call it in the industry, showrooming. When you have a product at Target and people just showroom, they come to look at it and then they buy it on Amazon. That’s what happens. It’s a way for them to see it in person. You have to find a way to say, “If that’s what’s going to happen, then I’d be in better control of this if I did in-store events,” like when you go to the end cap in Costco. You’ve got someone demonstrating the Bullet or whatever the latest Nutri grinder thing is.
Structure one of those events. It’s cheaper in the end than being on the shelf. What you’ve done is you showroomed in an environment where most of those people weren’t quite aware of 3D printing or weren’t aware of you in the 3D printing market. It’s a slightly different way of stepping into retail instead of going all in and finding out that this just isn’t working. We don’t have the support structure to handle this. We didn’t expect them to come back to us for more money. We didn’t do the volume through it because we thought everybody is being looky-loos and not buying.
It’s always been tricky and it’s getting even more so with brick and mortar retail relevance in question and constantly changing because the old rules aren’t working the way they used to. The idea of these little events, sort of Mini Maker events, that’s what they did at Barnes & Noble. That was a great way to market and gain awareness for a product and help reach out to consumers. The problem is you can’t do that all the time, but maybe you can do it with some occasional regularity.
It is no different than what John Biller and Simons Malls. They were doing up in the Simons department store in Canada and they were doing these mini-events and projects. You find that a department store manager is begging you to come back again, “How soon? When are you coming back into my store?” because the event drives people in.
You can get a lot of support from retail for that particular type of processing, showrooming, event planning and getting visibility for it. It’s a marketing method, but you’ve got to build that. The consumer market is going to be there at some point and 3D Systems took a huge step back and will not be a player in that which is crazy, because they’re such a player at what you will print in a commercial sense. They’re a big player. They have so much experience, much more than a lot of these startup companies. It is a little disappointing, but in every industry, there are plenty of companies in the commercial space and other companies in the consumer space, they don’t all play in both areas and there’s nothing wrong with that.
It opens the door for another company to come in. That’s the big opportunity now. Who’s going to rise to that? Is it going to be XYZ? Is it going to be Robo 3D? Is it going to be one of these other guys who’ve already stepped their foot into the consumer retail? I don’t know, maybe, or is it going to be someone else who surprises you?
It remains to be seen but it will sure be fun to see this unfold.
If you have any thoughts on who’s going to emerge as the consumer leader, I’d love to hear that. Who’s going to emerge as the consumer competitor against MakerBot? Find us on social media and send us a message @HazzDesign.
Even if you disagree with us and you think the consumer market is dead and it’s all going to be prosumer and commercial, that’s fine. We’re happy to have that discussion and no discussions are off-limits. You can email us at Info@WTFFFPodcast.com or Info@3DStartPoint.com.
Thanks again for reading.
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