Will virtual reality transform in-store merchandising?

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Source: InContext
Apr 12, 2017
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Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

Virtual reality (VR) simulation is arguably the most talked-about tech solution in grocery today. It aims to drive faster, smarter and more profitable decisions by enabling retailers to ideate new in-store concepts, evaluate them with test shoppers, and activate those concepts.

The technology is “a good value,” Tom Wozbut, director, category analytic and shelving hub, Kellogg Co., said in a presentation he did at the Western Michigan University 2017 Food Marketing Conference last month along with Jason Smith, VP, customer service, InContext, its VR technology provider.

Mr. Wozbut cited a few examples of how Kellogg has successfully used its virtual reality solution.

In one case, a retail buyer challenged competitors to improve the shop-ability and navigation in the cookie/cracker/on-the-go aisle. VR video showed a walk-through down the aisle, and the presentation refuted a concept that signage above the aisle was ineffective

In a different usage, the VR technology let store managers see what displays would look like in their environment for big events. Said Mr. Wozbut, “They can get a feel for how big the display is and can start thinking about how it fits in their store. It’s much more impactful than walking in with a sheet of paper.”

To increase sales of Pringles, Kellogg tested shelf arrangement performance indicators. Previous tests had indicated that the best-selling red can of Pringles Original should be moved to the bottom shelf, but VR found that vertical ribboning of the popular product resulted in significantly higher sales and a big increase in category penetration. Also, it only took two weeks to develop the market recommendation. “So we are rolling this out nationwide right now,” Mr. Wozbut notes.

In the future, consumers may use virtual realities in e-commerce to have a real shopping experience instead of browsing a series of pages, Mr. Wozbut notes. This could result in additional sales of related items or impulse products. “Seventy percent of e-commerce trips are to buy one item, so there’s not a lot of impulse,” he says.

DISCUSSION QUESTIONS: What do you see as the strengths and weaknesses of VR simulation as an in-store merchandising tool? Do you see other applications for the technology in e-commerce or in other areas?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The real advantages of VR technology will emerge once other technologies are dialed into the mix."
"VR tech simply can’t live up to the hype. It will succeed in some very limited consumer-facing applications and be useful in store planning."
"What is bothering me these days is our fascination with things that are “virtual” and “artificial.” Have we totally abandoned what is actually “real?”"

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20 Comments on "Will virtual reality transform in-store merchandising?"


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Kim Garretson
Guest
3 years 3 months ago

The real advantages of VR technology will emerge once other technologies are dialed into the mix. For instance, in the Kellogg example above, Kellogg has also been using a motion sensing technology in tests to monitor what the shopper actually does in aisle. It hangs motion sensors like those in Microsoft Kinect games above the shelf. The sensor then can heat map and gather other data about which items are lifted from the shelf by the shopper and are either put back or put in the cart. With in-store tests like this, the data can then help drive the VR scenarios for further refinement of the optimum shopping experience.

Lyle Bunn (Ph.D. Hon)
Guest

VR is good for alleviating mistakes (the expense part of the design process), optimizing and every gradient in between. It is especially valuable when linked to neuroscience in which the impact on the brain is assessed, rather than commentary by viewers. This is well described in a new bank design here.

Charles Dimov
Guest

I love the idea of using VR as another channel or augmentation of e-commerce. It gives brilliant feedback to the retailer on what works in terms of layout, display and placement. For standard things like boxed or canned groceries, I think this will fly.

For retail purchases that have an experience involved, an opportunity to ask an expert or an opportunity to try on the clothes for the right feel/fit, VR will open another shopping avenue, but will not replace brick-and-mortar stores.

All told, the more retail channels the better. It means shoppers get to use the channel that they like best and with which they are most comfortable.

Tom Redd
Guest

VR should go back in the drawer for the kids. Especially for food. VR is a rush-rush tech that has no solid role in retail yet — except to sell to people around holidays. Stop the rush. Focus on SCM and replenishment issues.

Dr. Stephen Needel
BrainTrust

Tom – you may be right that its role is limited as a sales tool. But as a research tool, it has proved invaluable to a lot of my manufacturer and retailer clients.

Max Goldberg
Guest

Virtual reality can quickly and efficiently test in-store concepts that in the past would take days and big budgets. Using VR, manufacturers and retailers can see how consumers respond to ideas and then implement them rather than set a store, test a concept, reset the store and test again.

Dr. Stephen Needel
BrainTrust

We’ve been doing this for 25 years now. It’s a great research tool for studying in-store merchandising, category management and shopper marketing initiatives. The key is to have a technology that’s validated — a number of players in this area drop the ball there. When we do a VR study, we want it to replicate when you roll it out.

The advantage is that you don’t have to reset a store and wait for months to get your answers — most of our tests take a few weeks. The disadvantage is that, as close as we get to real behavior, it’s still a simulation and there are other things that affect behavior besides choices at the shelf (type of trip, promotions, crowds in the aisle, etc.) — it is an idealized trip.

And one should be skeptical of showing category growth with these types of tests, especially when it’s penetration-driven rather than an increase in how much a shopper buys or how much they pay for their products.

Ian Percy
BrainTrust

There is part of this VR tech that makes all the sense in the world. I’ve been through situations where we showed people simple pictures of different arrangements and did muscle testing on them to see which deleted energy and which added. Not sure VR works any better though it is sure easier. So the discovery that vertical displays work better than horizontal ones, though obvious to a lot of us, is worth the effort.

What is bothering me these days is our fascination with things that are “virtual” and “artificial.” Have we totally abandoned what is actually “real?” Real reality. Real intelligence. I know, we think technology is advancing us but I wonder what we’re losing without realizing it.

Sadly we’re seeing way too much virtual and artificial leadership in government, airlines, banks, schools, charities and even in food production and water management. I just hope we don’t wake up one morning to see we’ve been led to artificial living. Too many are already there. I think I need another coffee!

Adrian Weidmann
BrainTrust

Many people have a very difficult time visualizing or experiencing a drawing in their mind. VR technology helps people experience these designs and, more importantly, allows design modifications and optimizations based upon these virtual experiences — saving time and money. It’s a lot cheaper to make these changes inside the computer before committing to concrete, metal, glass and plastic. VR technology will rapidly become the norm in the design and testing of almost everything.

At the recent DSE, the design firm Shikatani/Lacroix presented a retail bank design wherein they augmented VR with neuroscience monitoring to determine the emotional responses to the design of virtual travelers through the proposed design.

Dave Nixon
BrainTrust
Dave Nixon
Retail Solutions Executive, Teradata
3 years 3 months ago

It will streamline merchandising and product assortment decisions and INFLUENCE the in-store merchandising, for sure. But in conjunction with other methods and as a tool in the toolkit. Anything that can increase the probability of success for retailers earlier in the process that can be measured and validated is a good thing. VR will only help to make the physical retail store even more effective.

Tom Erskine
BrainTrust
3 years 3 months ago

VR is an extremely cost-effective way to test and promote ideas internally, for example to let executives experience a new store concept, but I don’t know any merchandisers or store teams ready to don a Gear VR headset from 9 until 5. The feedback is that it’s disorienting, in some cases creates light nausea and makes them feel like dorks. Today, headquarters and store merchandising teams vastly prefer a digital 3-D model on a tablet versus the disorienting process of donning a Gear VR headset.

Ian Percy
BrainTrust

Further on my “virtual reality” rant this morning …

If the picture at the top of this piece reflects on the “picture” people are given through a virtual reality experience then all bets are off. The picture is sterile and perfectly groomed with wide unobstructed aisles and absolutely no one to bother you.

When the virtual reality experience includes lineups at the cash register, people parking carts in the middle of the aisle, kids throwing tantrums, lousy lighting, discount price tags by the thousands, speaker announcements about clean-up in Aisle 3, crowded parking lots and (here in Arizona) a long walk on melting-point asphalt — and gives me a throbbing headache at the same time — then and only then will I become a virtual believer.

Dr. Stephen Needel
BrainTrust

Ian — we can do obstructions in a limited fashion now, and our new version will be able to do it even more. You are absolutely right — there are limits to VR.

Ian Percy
BrainTrust

Now you’ve got me interested! That’s amazing Stephen. That opens up the possibilities for VR enormously. If you’re ever in need of an “obstructionist” please call on me. 🙂

Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
3 years 3 months ago

VR tech simply can’t live up to the hype. It will succeed in some very limited consumer-facing applications and be useful in store planning. But it won’t transform retail.

At this point we are at the peak hype moment — lots of hype about things that haven’t been built. If you will, it’s a type of vaporware that we are told science fiction stories about. Once real work starts, as good friends of mine are doing, reality will narrow down where it offers any value. So we will see it have some impact. But, as my friends are finding, there simply aren’t good areas where it offers much.

In part, we need to remember that stores are physical and their advantage is physical. Drawing consumers to the physical store to offer them digital integration with products simply doesn’t add up.

Cate Trotter
BrainTrust

For research and testing, VR definitely has some great potential, especially when it comes to visualising what new initiatives will look like. You can road-test different displays for example without having to physically go into a store and change it out three times. And vitally everyone sees the same thing, everyone is on the same page.

When it comes to e-commerce, I’m not sure people are ready to strap on a headset when shopping. For a lot of people, shopping is a leisure activity, it’s relaxing, and at the moment VR doesn’t necessarily lend itself to that.

Ralph Jacobson
BrainTrust

There are some pretty cool VR demos out there right now for retail, however, I see it more as entertainment than a necessity at this point. I believe there is a real opportunity for VR to enhance the shopping experience in ways that are impossible in the physical world. The challenge is to make the technology convenient so a wider audience will be attracted to it. That way, retailers could leverage marketing, supply chain and other functional capabilities with VR to deliver an unprecedented consumer journey.

Min-Jee Hwang
Guest

Utilizing VR simulation to better visualize and research potential arrangements in-store is an invaluable tool. Believing it will replace the current standard page scroll shopping online is a little far-fetched. Using VR to visit and walk through a foreign museum is one thing, but a menial task such as grocery shopping? I don’t imagine it catching on. Other retail stores where seeing a digital representation of the product such as clothing or furniture to see scale have a future in VR usage by consumers, but not grocery stores.

Julie Bernard
Guest
Any technology that allows marketers to learn, experience, and demonstrate relevance and context for the in-store shopper stands to drive engagement and exploration. Using virtual reality to better understand the impact of display and marketing environments in the physical space may well prove critical to the next steps retail needs to take — all part of the industry’s response to the recent rise of store-closings and de-staffing decisions. But the vision for VR in the retail-strategy space should be broad, not narrow. It’s not enough to understand where sweaters or signage looks best. Although these are significant considerations, VR should be the underpinning of a new wave of proof-of-concept approaches — all geared toward rethinking and actually visualizing how brick-and-mortar approaches its indoor environments, and then turning to VR test customers who can provide pre-rollout validation. The upshot of VR’s promise — retail can actually see and confirm that changes to come will equate to meaningful and memorable moments for shoppers. Rather than mazes of massed-out merchandise piled high on tables retail needs to revitalize the craft… Read more »
gordon arnold
Guest

We are living smack dab in the middle of the digital information age. Never has there been more pent up desire for information. So what has retail done for this consumer demand? Those willing to invest have spent billions on clumsy and or hard to find user unfriendly apps and talking end caps. The stated goal was and is to relieve consumers from associates. Well the stores have reduces staff levels in spite of consumer complaints and the digital info they provide is seldom accurate. It may be a good time to reassess the “goals” of this money pit.

wpDiscuz
Braintrust
"The real advantages of VR technology will emerge once other technologies are dialed into the mix."
"VR tech simply can’t live up to the hype. It will succeed in some very limited consumer-facing applications and be useful in store planning."
"What is bothering me these days is our fascination with things that are “virtual” and “artificial.” Have we totally abandoned what is actually “real?”"

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