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Vietnam

Is in-store production the future of retail?

Forward thinking brands are using technology to make fast fashion even faster.


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Forward thinking brands are using technology to make fast fashion even faster.

German sportswear giant, Adidas, is leading a retail trend towards in-store production with its pop-up in Berlin, which opened in March 2017. Known as Knit for You, the pop-up let customers design their own sweater, which was knitted onsite with merino wool in under four hours.

The initiative is part of a public-private collaboration between government, business and research institutions, to explore decentralized production methods while giving end users the opportunity to co-create.

The technology was housed in a darkened room where customers could manipulate light with hand gestures to create a design. Laser body scans offered the option of bespoke sizing. Then a state-of-the-art machine ran off the garment.

“The Adidas project is impressive because it connects the end user to production and involves them in the creative process,” says Dirk Wichner, Head of Retail at JLL Germany. “Standard sales channels involve purchasing products that are delivered to stores several months after the design phase. It’s a challenge for designers to predict upcoming trends.”

Currently it takes Adidas 12 to 18 months to get products from the design stage to stores. It hopes the new customisation initiative will also bring financial benefits – it currently sells less than 50 percent of its products at full price but is looking to raise that to​ 70 percent.​

Customers look for the personalized touch​

At the same time, customers across sectors, from retail to gastronomy are demanding customized products. “Individualization is a big social issue,” says Wichner. “Fashion and other comparable products, including food, are reflected in this overall trend.”

A number of retailers have already begun experimenting with 3D printing. In Boston, Ministry of Supply is also producing customized blazers in just 90 minutes.

In a separate initiative, Adidas has partnered with Silicon Valley start-up Carbon on a project called Futurecraft 4D. Using the technology, the company can produce relatively small batches in record time, and initially plans to create shoes customized to cities or sports. The ultimate goal is to be able to create completely bespoke products for each individual customer.

It remains to be seen if in-store production can be cost effective. Right now, products created onsite tend to be more expensive—the Adidas sweaters set customers back €200 ($224). Plus, according to Wichner, “the time involved in creating a decentralized production facility makes it unsuitable for national rollout.”

Rethinking retail spaces

When the technology is ready, 3D printing and other onsite production apparatus are set to transform physical stores, which will require less space for shelving and display facilities and more for machines, scanners, devices and the like.

Ripples are likely to be felt across the supply chain. “Mechanical engineering here in Germany would probably have full order books for years to come,” notes Wichner. At the same time, the need for storage and distribution facilities would drop.

Though still in trial phase, decentralization holds the potential to eliminate major logistics challenges and over-production which can lead to significant waste. “If we can master it, the environmental impact will be immense,” concludes Wichner.

The technology may be in its very early stages but the benefits for both customers and retailers could well see it become a feature of future stores.​​

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