Safilo: 20/20 Vision, Or In Need of Better Sight?
Will a luxury eye manufacturer's vision to leverage 3D printing serve as a competitive advantage for the eyewear leader moving forward, or is the manufacturer at risk of falling victim to the buzz of a technology that is not congruent with its industry or business model?
Nowadays, companies seem to be sprinting towards technology megatrends with the hopes of grasping cost benefits and the ever-dwindling attention of consumers in an increasingly fast-paced world. This pursuit is particularly true in the consumer products industry. A recent megatrend that is beginning to seep into the consumer products space is additive manufacturing, also known as 3D printing. Safilo, an Italian eyewear manufacturer and distributor, has recently shared that “3-D printing holds huge promise” for innovation in their company – will Safilo’s vision to leverage 3D printing serve as a competitive advantage for the eyewear leader moving forward, or is Safilo at risk of falling victim to the buzz of a technology that is not congruent with its industry or business model?
Additive manufacturing enables the creation of 3D objects by printing layers of material over each other based on specifications in a digital design file. This method allows for the creation of both simple and highly intricate 3D objects without the need of extensive tooling or manual skill. [1] Benefits include reduced material waste due to the additive nature and reduced need for sub-units due to the ability to handle complexity. [2] The consumer products industry is a great opportunity for companies to leverage 3D printing to better manage costs and production processes and to offer more distinctive value to consumers in an increasingly fast-paced industry.
Safilo, a leader in luxury eyewear, offers a high volume of eyeglass-frames to consumers – with over 21,000 models across 31 luxury brands. [3] Safilo has invested heavily in infrastructure to support its manufacturing and distribution – with 7 manufacturing plants, a distribution network spanning 40 countries, and a reach of nearly 100,000 stores globally. [3] There are several problem areas that exist in the eyeglass-frame market. First, the market is plagued with a tremendous amount of unsold inventory. [4] Manufacturers produce eyeglass-frame models in high volumes to drive down manufacturing costs, but lack clear knowledge of demand. Second, traditional eyeglass-frame manufacturing results in a high percentage of raw material waste – approximately 75% of every sheet of acetate (plastic) used is discarded during production. [4] Third, traditional eyeglass-frame manufacturing limits the ability to create complex or customized designs without incurring additional cost. 3D printing provides an opportunity for Safilo to address these issues by increasing flexibility and enabling smaller-batch production, reducing material waste through an additive versus subtractive manufacturing process, and allowing for complexity without added incremental cost.
In the short term, Nicola Belli, Safilo Global Director of Front-End Innovation, sees 3D printing applicable to the production of low-volume Safilo models and expects that traditional manufacturing approaches will remain more efficient for the high-volume models. [5] To pursue this strategy, Safilo has partnered with Stratasys Ltd, a manufacturer of 3D printers, to outsource the production of the 3D printed eyeglass-frame models. [5] The company highlights that the focus on smaller-volume frame models will allow Safilo to respond to trends much quicker than they were able to before. [5] Longer term, Safilo’s 3D printing strategy is not as clear, however, given benefits to color quality identified by David Iarossi, Safilo Creative Director, the company may look to leverage 3D printing capabilities more broadly across models. [5]
Looking forward, I recommend that in the short-term Safilo’s management works hard to solidify a partnership with a leading 3D printing company. As 3D printing becomes more common among eyeglass-frame manufacturers and consumer products manufacturers generally, I suspect strong early partnerships would provide Safilo with a competitive advantage as demand for 3D printing provider’s products and services rise. Longer-term, I recommend that Safilo review their production and distribution processes and identify opportunities to integrate 3D printing more deeply into their business model. This may call for a shift from partnering with 3D printing companies as producers to bringing 3D printing partner’s technology in-house. This could provide an opportunity for Safilo to streamline production and potentially reduce its current manufacturing plant footprint by more directly leveraging the benefits of increased agility and “on-demand” processing capabilities. [6] While several limitations exist with current 3D printing technology, including extensive post processing requirements (i.e. curing, finishing), limited material availability, and limited economies-of-scale, these limitations are expected to improve in the longer-term. [6] Once these improvements are realized, Safilo may be able to shift their strategy from smaller-volume eyeglass-frame models to increasingly larger-volume models and integrate 3D printing technology more deeply into their business model.
As Safilo contemplates the future, a few questions remain. Should Safilo management make a more fundamental shift in how they think about eyewear design? How should they balance emerging strategies for customizability with their traditional high-volume production approach? In addition, how should Safilo balance their existing brand image of “superior” materials with the current limitations of additive manufacturing material availability? Is there a possibility that the “luxury” and “Italian-made” identity of the brand could be diluted?
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[1] Spaeth, D., 3D Printing Is Changing the Face of Multiple Industries. ECN: Electronic Component News. vol. 61, no. 9, Oct. 2017, pp. 21–23. EBSCOhost, Available at: ezp-prod1.hul.harvard.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=125445588&site=ehost-live&scope=site.
[2] https://ieeexplore-ieee-org.ezp-prod1.hul.harvard.edu/stamp/stamp.jsp?tp=&arnumber=7517429
[3] Group, S. (2018). About us – Safilo Group. [online] Safilogroup.com. Available at: http://www.safilogroup.com/en/1-group [Accessed 13 Nov. 2018].
[4] Michaels, D., 2018. Design Your Frames: 3-D Printing Comes to Eyewear. The Wall Street Journal. Available at: https://www.wsj.com/articles/design-your-frames-3-d-printing-comes-to-eyewear-1541937600 [Accessed November 14, 2018].
[5] https://search-proquest-com.ezp-prod1.hul.harvard.edu/docview/1853717329?accountid=11311
[6] https://cds-frost-com.prd2.ezproxy-prod.hbs.edu/p/71319/#!/ppt/c?id=D7BC-01-00-00-00&hq=additive%20manufacturing
I really enjoyed this post on additive manufacturing in the consumer retail space. I was particularly impressed on how you tied in some lessons we’ve learned from Marketing at the end of your essay, as Operations does not operate in a vacuum and if certain operational changes are made, marketing efforts may have to be adjusted as a result. I also appreciated your suggestions with regards to how to employ 3D printing tech, first by partnering with a 3D company and next by perhaps bringing these capabilities in-house. It will be interesting to watch the space to see which approach is preferred by various firms and for what reasons.
To your question about whether 3D printing introduces process efficiencies for Safilo or harms its luxury brand identity, I think the answer is ultimately dependent on who the company’s target customer is. I’d argue that 3D printing seems much more well-suited for a company like Warby Parker whose customers appreciate low cost and the flexibility to customize frames online. For a company like Safilo, their brand equity comes from the Italian history and emphasis on craftsmanship. In their case, the process efficiencies of 3D printing may be outweighed by the negative impact to Safilo’s brand, especially if Safilo’s customers are willing to a pay a premium for a luxury product. You raise an interesting point that adopting technological innovations can have spillover effects, and as managers, we need to be aware that both our products and processes need to have a consistent message.
I had no idea 3D-printing could apply to more complex products such as eyeglasses. This is very interesting, especially given the increased competition in the eyeglasses space – between luxury brand manufacturers like Safilo, direct-to-consumer models like Warby Parker, and specialty purpose models like Felix Gray. This could present a unique opportunity for Safilo, but I also agree that it could threaten the luxury aspect that they have already established. However, the customization option that 3D-printing allows for could create a unique competitive advantage. I don’t know of any well-known eyeglass brands that offer wide customization options with any sort of speed / efficiency, which could be an opportunity if Safilo fully leverages this model.
I truly enjoyed reading your post. I think you raise interesting questions about how companies can jump into new technologies that might not be the best fit for them. In this case, I think it is difficult to imagine how this brand can place products manufactured through this technology as a luxury product. To your question, I think it would definitely dilute the luxury perception of the brand. Usually, the consumers of luxury products like sunglasses or watches value craftsmanship and exotic materials.
Great post and I share your concerns about the balance between additive manufacturing and maintaining a feeling of luxury. While I think mass production of luxury eyeglasses using 3D printing may not be here yet, there could be an element of luxury within customizability, which could fit within the brand’s image. For example, 3D printing could be used to customize eyeglasses, which could be marketed as more unique and exclusive, which fits within its luxury image.
3D printing makes sense for higher volume, low end eye wear products, but I would be cautious about trying to use this process for high end, luxury products. As mentioned, in its current format there are several limitations for 3D printing including processing requirements, materials availability, and economies of scale. While these problems get corrected, I see low end products as a better “test market”. One question that I might have is which products generate higher margins? This might be important to understand because it might inform which manufacturing process this company decided to use.
I enjoyed reading your post about how Safilo is trying to integrate 3-D printing. Based on your research, it appears waste is a significant cost burden for the eyewear industry. And 3-D printing could be a competitive advantage in that respect. The reduction in costs attributed to acetate disposal would be a massive cost savings for the business. I would agree, however, that I think it could dilute the brand. When I think of luxury glass brands, I imagine durability and high quality. From my understanding, a challenge with additive printing is the type of material and its durability. Manufacturers are limited in terms of building material type. Another issue is although additive manufacturing would enhance scale, a competitive advantage for luxury brands is exclusivity and limited edition. Additive manufacturing could compromise this strategy.
Great article! There is definitely still space for 3D printing, as a technology, to improve (in terms of speed, compatible materials, cost, etc.). I think a lot of businesses, like Safilo, see the future potential and want to be early movers. But until the technology becomes more efficient and Safilo can realize their complete vision, I wonder if they could additionally employ 3D printing for a more robust product prototyping program. A big challenge in retail is predicting the demand for new fashion trends – 3D printing could enable Safilo to produce a wide range of eyewear samples, get feedback from prospective customers on those samples, then make smarter decisions about which products to include in their collection.
Safilio’s situation reminds me of the stories of Kodak I have heard from WIlly Shih. They are an established brand with a high quality product, but the landscape is changing and will leave them behind if they don’t change their business model radically in the next 5-10 years or less. They are aware of the technology that will disrupt them, but there is a real risk that in a world of 3D printed glasses, they will not be competitive with upstart, small, Indian companies. If there is some way they can use their expertise to turn their now-commoditized product into a service offering like design or personalization as a service, that may help them adapt. They may also be able to adapt to new markets like VR optics, or optical sensors, to build new opportunities for growth.
Fascinating topic, and very well articulated article! I share your concern about Safilio pushing ahead too quickly on supply-side innovation without improving their ability to forecast market demand. On the other hand, transitioning from traditional manufacturing (which, as you mentioned, requires large batches to reduce unit costs) to 3D printing might enable them to implement a just-in-time delivery system (similar to Toyota and their suppliers), thus reducing the need to hold high levels of inventory and the costs of not being able to forecast future demand accurately.
This is a really interesting example of the applications of 3D printing in the luxury retail space and potential risks associated. I think Safilio can capitalize on consumers general lack of understanding of where their favorite designer glasses are made. I think most purchasers would be quite surprised to learn that their Dior sunglasses are manufactured by the same company as Fendi and even Banana Republic! I believe this lack of transparency in the manufacturing process will benefit Safilio greatly as they will benefit from the future cost reductions without any reputational risk to their brand.
It is apparent the advantage that 3D printing can bring to an industry where demand can be hard to predict and excess supplies can quickly build up, so the attraction of Safilo to 3D printing is easy to understand. I am concerned with the low volume that is able to be manufactured through this process and wonder if it will be able to get to the level needed for a company like Safilo to properly utilize it. I am also concerned about the high amount of time and labor that will go into finishing touches after the product has completed the printing process and if there is really an advantage to be gained at this point in time. As the technology gets more and more sophisticated perhaps it will be possible to have the machine perform all of these processes for Safilo, but I think this might also present a different issue. Since Safilo is producing a CPG, as the machines get better and are more common in the world is there a risk that people will take their designs and make their own glasses rather than purchasing them?
In general, glasses frames can be sold at a massive markup, so I’m not at all concerned with the business model. The limited selection of 3D printable materials is more worrisome to me. Customers need glasses frames to be durable, flexible, comfortable, and indistinguishable from regular glasses. We saw from the failed launch of Google Glass that consumers don’t want to wear anything they perceive as “weird” on their face. Unless Safilo can produce 3D printed glasses that function just like regular glasses, I think they’ll have a hard time escaping niche status.
I agree with your point of view on the brand dilution aspect of additive manufacturing when applied to luxury segments. While 3D printing from a production point of view does make sense especially given that wastage is such a huge problem in eye-ware industry, my major concern is that 3 D printing is gaining traction primarily because of its 2 benefits – customisation and faster production rates, both of which are not the biggest problems of luxury eye-ware industry and thus I would be highly sceptical of long term sustainability of this concept.
Interesting use case for additive manufacturing that I wasn’t aware of. 3D printing for eyeglasses actually make perfect sense as I think about my personal shopping experience – with an Asian bone structure, I have always struggled to buy eyeglasses that fit me well because the majority of the models in the stores presumably were designed for Caucasian customers which often meant that I ended up compromising on fit. I agree with the potential risk of brand dilution once Safilo uses 3D printing more widely – however, maybe one way they can use the technology to their advantage is by pitching the idea of personalization / customization of eyeglasses to individual customer’s bone structure. For example offering the customer the option to 3D print eyeglasses best-suited for their facial features which would allow the company to retain its premium pricing.
This is an interesting read. It exciting that 3D printing is polarizing a number of industries, including eye wear. However, the 3D printing industry is relatively young, and there are significant technological hurdles that it must pass before it moves into industrial scale. Although, I believe in the potential of 3D printing to live up to its ambitious promises, my main concern is that while high-end industrial printing systems works well with plastics, certain metals, and ceramics, the range of material types that cannot yet be printed is extensive. How this potentially affects Safilo and its ability to scale needs to be a key consideration.