Charles R. Goulding and Preeti Sulibhavi discuss recent trends in consumer discretionary spending and how 3D printing can play a role.
Consumer discretionary spending is down. The hardest-hit industry is the gift-giving market.
People are shifting to gifting “experiences” as opposed to tangible items. Whether it is a MasterClass subscription or a Tinggly bucket-list gift, gifting things that people can remember doing, as opposed to a tangible item that they may eventually break or need to be thrown away, appears to be resonating with many of us.
Whether it’s a birthday, a holiday, or an anniversary, presenting a fun-filled day or even a mini vacation as a gift is increasingly becoming a favorite choice. This trend is impacting the traditional gift-giving industry, leading to lower profits margins and job losses for some.
Retail giants specializing in consumer discretionary products like Hasbro and Etsy are feeling the pinch.
Hasbro
Children, especially teenagers, prefer adding video games from their Steam accounts to their wish lists instead of traditional, physical toys. Hasbro, responding to weak toy sales, has let go 1,100 of its employees. It’s a serious issue, not something to be taken lightly.
Earlier this year, Hasbro laid off hundreds of employees and predicted trouble ahead in October. The company’s latest quarterly earnings report saw a decrease in its full-year outlook, anticipating a 13% to 15% decline in revenues for the year.
As per Hasbro’s October quarterly report, sales for popular toy brands like My Little Pony, Nerf, and Transformers fell by 18% due to a shift towards digital/virtual gifts.
However, now is not the time to despair, but a time to seek inspiration in innovation. If toys are designed to align with children’s favourite activities, the toy industry could make a recovery. Through the use of 3D printers, such customization could be achieved.
R&D Tax Savers data shows Hasbro’s 2022 R&D spend per employee.
Etsy
Etsy has recently restructured its workforce due to changes in the market, resulting in 225 team members being let go. The company has ventured into the “experience-giving” sector with its one-stop service for virtual interior decorating and unique 3D printed homewares. By doing so, consumers have the flexibility to hire their own “virtual interior design decorators.”
Worth highlighting, Etsy has taken advantage of the industry’s potential to swiftly create and personalize designs.
3D printed dinosaur toy available at Etsy.
When you visit Etsy, you will come across a section dedicated to 3D printed products. Here, you can find everything, right from customized cosplay props to colorful 3D printed dinosaur toys.
Etsy has been scaling up its research and development efforts to keep pace with customer demand. The 3D printed product section could very well be a manifestation of Etsy’s focus on innovative ventures.
Etsy’s R&D expenditures per employee have been shown from 2019 to 2022 R&D Tax Savers.
The Research & Development Tax Credit
The enduring Research & Development Tax Credit (R&D) Tax Credit is accessible for businesses developing novel or improved products, procedures, and/or software.
3D printing may augment a company’s R&D Tax Credits. The salaries of technical staff who design, test, and modify 3D printed prototypes can be incorporated as a portion of qualifying time spent for the R&D Tax Credit. Similarly, if used to boost a process, the time dedicated to integrating 3D printing hardware and software is deemed an eligible activity. Lastly, when utilized for modeling and preproduction, the expenses of filaments used during the development process may also be recouped.
Regardless of whether it is used for generating and testing prototypes or for final production, 3D printing is a robust indicator that R&D Credit eligible activities are ongoing. Businesses adopting this technology at any stage should consider leveraging R&D Tax Credits.
Conclusion
Gift-giving is a delightful expression of gratitude or love, or sometimes, a combination of both. The trend of giving experiences rather than physical presents has been on the rise, clearly visible in the sales reports of companies like Hasbro and Etsy. Yet, the emergence of the 3D printing industry shows a potential for a new trend where tangible presents can be highly personalized and therefore, more special. Perhaps this can result in a transformation of the conventional gift market, allowing it to rediscover its relevance among consumers.
“Why did the 3D printer go to therapy? Because it had too many layers of unresolved issues!”
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