When we hear about virtual reality in the news, it’s usually a story about consumer-facing applications like video gaming or the ability to shop in a virtual store from the comfort of your couch. But even with this summer’s HTC Vive price cut (following a short-term discount of Facebook’s Oculus Rift), consumers have not yet flocked to using VR headsets as fast as some predicted.
But where individuals aren’t seeing value, businesses are. For instance, UPS has incorporated virtual reality into its student driver program, Walmart announced employee training through VR headsets, and other companies have found use of VR applications for maintenance.
Decisions With Data, Not Hunches
Most retailers are all too familiar with the shortcomings of standard market research options:
Inaccurate forecasting: Shopalongs, focus groups and purchase intent surveys don’t always reflect what shopper behavior will be in real-world conditions. This means that decisions based on the outcomes of these research strategies may not necessarily yield increased ROI for retailers.
Significant time and expense: Conducting reliable in-store tests — such as evaluating a new store floor plan —requires a significant upfront investment of time and money. Observing and recording how shoppers interact with the layout requires additional time, as does parsing and interpreting that data.
Inefficient decision making: Stakeholders in major company decisions are often dispersed, making it difficult to find efficient ways to communicate ideas among invested parties, sign off on recommendations and implement changes.
As a result of these challenges, many decisions in retail are still made largely on hunches, whether it’s a gut feeling about which layout to test in a model store or one person’s confidence that the results of a focus group are “good enough.”
It’s no wonder, then, that arecent Oracle survey found that 74% of online retailers are currently using VR or say they will be by 2020. The promise of taking labor-intensive market research into the digital world is too enticing to pass up.
VR For Retailers In Action
So how, exactly, can VR transform market research for retailers? It can enable users to set up entire virtual stores, send customers through these stores and observe their behavior for in-depth shopper data studies. VR tools like these offer several advantages:
Retailers can save time and money. Rather than using a mock store to iterate on new concepts, or setting up and staffing an actual physical location and observing how shoppers interact with a new concept, VR enables retailers to build any environment —or multiple environments —digitally. They can then evaluate with real shoppers through a cloud-based VR platform. This allows retailers to create and test new ideas, and then make tweaks to concepts with minimal effort, meaning the time from concept to outcome is significantly shorter.
Data provides confidence. Because VR software makes it so easy to gather a critical mass of data, retailers can rest assured that they’re making confident, data-based decisions. When it’s nearly as easy and efficient to run multiple tests as it is to run one, retailers no longer have to choose between stronger data and lower costs. Even better? VR software collects so much data, you can easily test multiple KPIs in a single simulation —a daunting prospect in analog tests.
Real-time analysis. Because data can be analyzed and digested from anywhere retailer and brand teams have computer access, retailers thatuse VR can better collaborate and make changes as they go. Additionally, comments from shoppers’ experience in virtual stores can be captured in one place, and research teams can dive into the results from virtually anywhere in the world.
The Path To ROI
It’s hard to overestimate the potential impact that adopting VR can have on market research. The speed to market combined with the cost savings and ROI that virtual research provides should be a no-brainer when it comes to implementing new business strategies.
For example: an InContext Solutions client was considering an updated display that involved buying high-end shelving units. The total upgrade involved 22,000 such units, and they were considering three different options. They assumed the most expensive option would be the winner, but wanted to evaluate them in a virtual setting before investing. The client used our software to conduct a VR test of shopper behavior and found shoppers actually preferred —that is, they bought more from —the lower-end shelving unit. At a $40 savings per unit, the client was able to confidently make a decision that not only saved $880,000 on upfront costs, but also yielded a more profitable store.
A VR Tipping Point
Perhaps most exciting for many retailers we talk with is that VR is no longer a pie-in-the-sky technology that only the name-brand manufacturers and best-funded companies can afford. Today, VR software can be run on almost any computer and comes with hands-on customer support.
Using VR to guide market research will give retailers a competitive edge they’ve long been searching for —particularly when it comes to changing the in-store shopping experience. And as its capabilities become known, VR will likely become a standard part of any retailer’s competitive toolbox.
Mark Hardy is CEO of InContext Solutions, the leading provider of cloud-based virtual reality solutions for retailers and brands. Use of InContext Solutions’ flagship ShopperMX™ platform helps brands and retailers build, visualize and test in-store concepts within hyper-realistic retail simulations —enabling more immersive, cost-effective and faster go-to market strategies.