This article was originally published by Retail Customer Experience.
Initial buzz about VR focused on how it could transform consumer experiences like gaming and shopping. Early retail applications focused on providing supplemental in-store experiences, but those haven’t seen wide adoption — and they certainly haven’t stopped the closures of once-dominant retailers.
But even though highly visible VR applications haven’t become mainstream, virtual reality technology is having a significant impact on brick-and-mortar retailers behind the scenes. Today, the retailers succeeding with VR aren’t using it as a gimmick but rather as a cost-effective tool for optimizing their merchandising – and they’re creating a better manufacturer-buyer ecosystem in the process.
Rethinking customer experience
Often, the conversation around VR in retail focuses on the idea of “experiential” shopping. Take The North Face’s 2015 campaign to let shoppers virtually experience Yosemite or the Moab desert via VR headsets in stores. And then there’s Ikea, which launched a VR game customers could play (by wearing headsets) when they shopped during store grand openings.
While both of these certainly qualify as “experiential,” customers aren’t necessarily seeking out add-ons to the shopping experience. What they want is to feel connected to and to be able to make purchases in the way that is most convenient for them.
Using VR to deliver what customers will buy
The secret to delivering that experience in ordinary retail settings is for manufacturers and retailers to use VR before customers ever set foot in a store.
If we assume that customers are happiest when they can easily find the products they want — and discover new products that they’ll want in the future — the job of the retailer and manufacturer is to figure out how to optimally merchandise so that customers can do that.
VR is making this possible by letting retailers and manufacturers test merchandising scenarios much faster and more efficiently than is otherwise possible and make decisions based on hard data rather than gut feel. For example:
• Kellogg’s saw an 18 percent sales bump of a new product in virtual testing of various shelf placements. The tests used immersive VR software that let real customers experience digital versions of store shelves. This proof of concept benefited both the food giant and the retailers selling its products.
• Walgreens and Coca-Cola collaborated on a VR-enabled test that determined customers had an almost 100-percent preference for standalone blocks of Coke transaction packs, versus placement within an existing vertical block. Since making the change to standalone blocks in actual stores, the pharmacy chain has doubled the number of shoppers buying Coke’s mini-cans — again, a win-win.
• The baby food brand Happy Family used VR software to test four shelf setups and determined that top-shelf placement yielded 15 percent lower sales and bottom-shelf placement caused 13 percent loss — a compelling, data-driven narrative to take to retail partners. Notably, Happy Family was able to complete the entire study, from concept to completion, in less than four months, meaning it was able to communicate sales-boosting strategies to its retail partners far faster than would have been possible with analog testing.
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