Driven by ongoing disruptions in the global supply chain, brands and retailers are bringing manufacturing and design processes closer to the consumer — both physically and digitally. To better meet consumer needs, companies are utilizing new types of data to inform front-end R&D as well as operational decision making. They’re leveraging creative AI applications to streamline product concepting and design phases and using 3D printing techniques to build a more efficient on-demand manufacturing model, effectively moving away from mass to bespoke. What’s more, production lines are being reconfigured into smaller footprints, allowing factories to be located closer to the communities they serve. Taken together, these innovations help identify unmet needs in the marketplace, enable enhanced customization at scale, and bring products closer to their end consumers. These new manufacturing techniques save transaction costs, give companies more oversight on production, and power more ethical and sustainable supply chains.
At the same time, companies face increased competition for consumer loyalty, which has led them to consider how they can offer consumers a more personalized product experience. As a result, brands are embracing more agile processes across product development and production. Digital tools like AI, AR, and 3D printing can bring consumers into the production process as collaborators, which in turn creates new opportunities to gather insights, feedback and data in real-time, closing the loop between needs and finished products. By giving consumers greater control and confidence over their purchase decisions, companies can not only drive repeat sales but reduce operational and environmental costs associated with unsold merchandise and returns.
To support companies as they consider new processes and initiatives to meet emerging consumer needs, the PSFK research team has identified the 5 key strategies in a report about future product design and manufacturing. Developed through the lens of technological advancements, digital behaviors, and sustainable business models, these trends highlight the innovative ways organizations are reimagining not only product design, but the final consumer experience as well.
Proprietary Insights With This Report
There is an expectation among consumers for the retailers and brands they shop with to demonstrate responsible and sustainable practices.
Consumers are demanding that manufacturers take environmental measures such as sustainably sourcing components and ingredients or employing a production process that reduces waste. In fact, 3 in every 5 US shoppers say they are influenced to buy products from companies with responsible manufacturing.
Consumers are willing to share data in exchange for a customized product or experience, but many still need to be convinced of the benefit.
While many people find what they’re looking for when shopping, there’s a significant portion who need help finding products that are physically right for them. Over 45% of US shoppers say they seldom or never typically find the perfect size, shape or fit.
Also…While shoppers are interested in bespoke products made on-demand, there’s a limit to the amount of personal information they are willing to share today. 57% of US shoppers say they would only share a little or moderate amount of data to brands and retailers in order to be offered products that are the right size & shape. 14% of shoppers say they don’t want to share any data at all.
To improve overall CX and meet demand changes in real time, companies are adopting strategies that shorten supply chains and tailor production to reflect customer needs on a localized level.
While many US shoppers are happy to have their goods made anywhere in North America (31%) (or even the world (15%)), a high proportion are looking for locally made products. 48% of US shoppers would prefer to buy from companies that make their products within 100 miles of where they live.
As eCommerce grows, the environmental impact of deliveries increases too. 43% of US shoppers are concerned or very concerned about the environmental impact made by the shipping and deliveries of their online shopping. Only 7% say they are not concerned at all.
New Strategies for Product Manufacturing
Beyond its operational value, AI is writing movies, creating songs and acting as a creative assistant in terms of helping design teams generate prototypes and even select final concepts. For retailers and brands, AI and proprietary algorithms are being used to create a more collaborative and on-demand manufacturing model, where after generating initial specs or a design brief, AI-powered plans are handed off to human design teams for final input and production.
To better meet consumer needs brands and retailers are taking aggregated information about consumers and their purchasing tendencies to inform product design. By harvesting customer feedback through technology to inform the product development process, retailers are better positioned to accommodate consumers’ lifestyles and preferences, while learning how best to achieve a well-designed product that resonates with customers on a deeper level.
Rather than implement full-scale production runs that often result in unsold inventory, brands are considering the viability of pre-order and made-to-order manufacturing models. Companies are employing production methods like 3D printing, CNC milling and other on-demand techniques alongside new ways to sell to their customers. This approach reverses the mentality of instant gratification by asking them to register their buying intention before a product is made, while opening the door to feedback and bespoke customization.
Best-In-Class Case Studies
AMAZON PROVIDES SELLERS WITH TOOLS TO FIND THEIR NICHE
Amazon’s Product Opportunity Explorer is a next-generation feature for ecommerce sellers that helps them better understand and respond in real-time to customer demand for new product ideas.
KNOT STANDARD CREATES CUSTOM CLOTHES THROUGH A MOBILE APP
Custom clothing company Knot Standard’s AI-powered, on-demand platform is revolutionizing traditional retail.
WAZP’S DECENTRALIZED APPROACH REDUCES SUPPLY CHAIN LENGTH
The 3D-printing pioneer has created an innovative, purpose-built, on-demand supply chain that makes 3D printed mass-production accessible, affordable, and impactful.
