Dive Brief:
- Kellogg uses a cloud-based virtual store simulation and shopper insights platform called ShopperMX to boost sales, increase efficiencies and better leverage market research insights, according to CPG Matters.
- Tom Wozbut, Kellogg director of category management analytics and space management, said the virtual reality technology saved the company 50% on display costs when it tested different in-store displays for back-to-school 2016. Normally, Wozbut said the company would assume the most expensive display model would get the most attention, but the simulation showed a cheaper option performed best.
- The VR tech also can help managers see what new in-store displays will look like ahead of time.“They [store managers] 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," Wozbut said.
Dive Insight:
Kellogg's successful integration of virtual reality technology into the company's operations is impressive, especially given the promising results. Though still a relatively new space for manufacturers and retailers, the virtual reality space holds a multitude of opportunities, from cost-cutting measures to more targeted marketing.
For example, virtual reality can be used to help determine if consumers pay attention to a specific product concept, which can then be quantified in sales. It also can help brands determine the perfect place to put a new product in a grocery store or category and could better establish a shopper purchase decision hierarchy.
Kellogg is racing ahead of competitor manufacturers with this innovation, and it will be interesting to see if other brands — and retailers — will experiment with the technology as a result. In the grocery space, virtual reality can drive faster, smarter and more profitable decisions at retail — especially among millennial consumers.
Wozbut predicts in the future retailers could use virtual realities in e-commerce to provide consumers with a simulated shopping experience, rather than just browsing the internet. This could encourage sales of similar items and also drive impulse sales. According to Wozbut, 70% of current e-commerce "shopping trips" are to buy a single item, eliminating opportunities for impulse buys that are abundant in-store.