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VR transforming brick-and-mortar CX but not how you'd expect

David Rich, CEO at InContext Solutions, writes that the key to successful virtual reality is delivering the experience before customers ever set foot in a store.

Photo by iStock.com

June 27, 2019

By David Rich, CEO, InContext Solutions

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.

The key here is understanding the role that acquiring merchandise plays in customers' lives: people picking up soda on the way home from work want immediate refreshment. They don't want to pause in-store for a virtual tour of the bottle factory.

The VR software available now is so powerful because it lets retailers and manufacturers test potential signage and shelf configurations much more quickly and inexpensively than is possible with physical tests. These virtual tests, in turn, provide data on exactly what customers want, thus empowering retailers to arrange merchandise on their shelves accordingly.

Whether customers hope to dash or linger, manufacturers and retailers can rest assured knowing, based on hard data, that they're making that experience possible.

Often, the best experience Is one you don't notice

With today's technology and shopper expectations, the best VR experience in most retail settings is one customers don't know is happening: merchandising optimized by testing in a virtual environment (and, thanks to the speed and minimal expense associated with that testing, frequently re-tested and re-optimized).

Providing shoppers the most intuitive and convenient shelf layout possible lets brick-and-mortar retailers fit as seamlessly into consumers' lives as online retailers, which in turn boosts profitability for retailers and manufacturers. In an era where consumers value experiences more than "stuff," that's key: frictionless acquisition of said stuff lets them get on to their experiences more quickly.