How Retail is Using VR to Innovate Planograms Amid Product Shortage

one per customer please sign on empty shelf

The labor and product shortages in 2021 has made it difficult for stores to keep shelves stocked. Virtual reality is providing a collaborative space for innovation despite global supply chain realities.

Pandemic induced supply chain issues and labor shortages in 2021 have changed retail experiences and strategies. Just as retailers were ramping up their assortments with more brands and niche products, a global manufacturing disruption altered their ability to do so. Categories that were once highly saturated with numerous brands and product options are now only offering half of previous assortments.

To solve for these circumstances, retailers are asking about insights surrounding 3 key areas: simplified shelves, product substitutions and category walks.

The problem is that manufacturers face such limited inventory that it is challenging to obtain products for innovation purposes. This does not mean that retail store planning should cease to exist. In fact, the rapidly changing circumstances have made it more important than ever. It is time for retailers to find a new way to innovate in-store ideas that does not involve physical products and labs.

How can retailers appropriately optimize their goods and services at a time where retail jobs remain unfilled and product inventory is desperately required in stores?

virtual reality 3D laundry product aisle in Target store

Strategy: Simplified Shelf

Although this inventory shortage has caused a lot of headaches, not all impacts may be considered harmful. For example, it has led to the resurgence of a more simplified planogram that consists of core products with more facings to fill in the gaps.

Through these simplified planograms, shoppers are no longer struggling to find the right product for their needs. In fact, many customers are finding the limited selection easier to shop.

Of course, the ideal simplified shelf is still different for every category and will elicit different shopper reactions. In order to identify and create the most easily shoppable aisle for your category, different versions of a more simplified shelf should be created and tested.

Solution: Digital Planogram and Space Planning

One technology that brands and retailers are taking advantage of for category management solutions is virtual reality (VR). Agile 3D planogram software in VR allows category managers to quickly develop realistic visual merchandising concepts that can be seamlessly transitioned to field research.

These virtual planograms are constructed using digital 3D product models and fixtures so excess inventory and space is not required. This allows brands to establish unlimited versions of simplified shelves without use of their high-demand physical inventory. It also simplifies internal collaboration because all work can be done online as opposed to in-person set-up of test shelves within a physical lab space.

Woman looking at 3D laundry detergent while shopping in virtual reality

Strategy: Product Substitutions

This inventory shortage has left grocery stores with a lack of products and made empty shelves the new normal. Less available product means that creating planograms is a hassle and substitution is occurring regularly at the shelf. Customers have gone from frustrations over out-of-stocks to expecting that they will need to find a product substitution for their favorite items.

Solution: Virtual Store Testing

In order to effectively understand the impact that product substitution is having on your category, it is necessary to examine purchase decisions. To do so, product planograms can be evaluated using virtual reality market research.

VR research uses headsets with eye-tracking to immerse consumers in a virtual store experience that tracks their movements, attention and purchases to uncover in-depth insights into their shopping behavior. Through testing shelf planograms in virtual reality, you can identify and plan for areas of high substitution and ensure that your products will perform well in these circumstances.

Man shopping for pasta in virtual reality grocery aisle

Strategy: Category/Store Walks

This inventory and labor market shortage has made it virtually impossible to do in-person store walks. There are limited physical products and retail workers to stock the shelves and perform resets. It has made gathering consumer behavior on floor plans, displays, promotions, and packaging extremely difficult.

Solution: Online Shopping Exercises

Aside from headset based virtual reality research, retail planograms can also be evaluated remotely through online shopping exercises. Respondents navigate and shop a virtual brick and mortar store on their computer as they would in the physical world.

Virtual online market research generates reliable insights though interactive store shopping exercises that offer a more engaging and realistic experience compared to standard online surveys. The rise in freelance work from individuals working from home also provides significant opportunity for brands to find online respondents to complete these experiential surveys. This allows retailers to optimize in-store assortments and increase sales amidst having limited product availability and a retail labor shortage.

Man on laptop virtual shopping in online grocery store

Although market research is currently unable to be reliably carried out in the physical world, it has made room for new and possibly more efficient ways for retailers to gather critical shopper insights. Virtual reality software can be used to accelerate the category management process and improve how the retail business innovates.

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