October 2, 2023
By Michael Wilkening, ARC Communications Manager
If you are a retail space planner who loves technology, you are in the right place at the right time. Retailers and CPGs are increasingly using a growing number of advanced technology tools leveraging virtual reality (VR), augmented reality (AR) and machine learning (ML), allowing for customized space and floor plans at speed and scale. Moreover, these tools allow retailers and CPGs to test store layouts in a virtual store setting before implementing them in the real world.
The market for virtual tools only figures to grow. According to one industry estimate, the global retail VR market is expected to near $5.5B by 2028. Retailers such as Lowe’s, IKEA, and Macy’s have embraced these technologies to allow end-users to create a customized virtual experience once incomprehensible.
To learn more about these tools, the Space Planning Community recently surveyed vendors and industry experts. Here’s what we learned about the current state of the virtual space planning market, as well as what’s ahead:
What are the advantages of virtual space planning tools?
From our research, these trends emerged:
- Efficiency and Accuracy. With these tools, retailers and CPGs can test a variety of planograms in a virtual setting, reducing the need for on-site visits. This can result in savings of both time and cost of a product launch, or a planogram reset.
- Reduction of Errors: For starters, the tools can be very helpful for planogram compliance. Then there’s the issue of ensuring your best-laid micro-space ideas work in a given macro space. In a CMA webinar this spring, 3DVR Solutions CEO Nigel Hemer described the advantage of being able to plan virtually first. “Being able to go and walk the aisles in virtual before it’s actually built means you have that first-time right-time execution part, so you have the macro space component as well,” said Hemer, whose firm is one of the notable virtual vendors in the space, along with 345 Global, InContext Solutions, and ReadySet Technologies. “And because it’s so easy to load in a floor plan [virtually], the work effort to actually go and look at an entire store is a couple of button clicks, and then you can walk up and down, identify things that are wrong, and it’ll save you money from that point.”
- Study Shopper Behavior. Using VR headsets, the behavior of test shoppers can be captured in a virtual world, allowing for vendors and retailers to see if their plans will work in reality – or whether they will need to be changed before implementation. Some providers also use AR to capture shopper insights (usually through a phone app), or to help retailers and suppliers show how a proposed display would look live in-store, at that very moment.
- Volume of Insights Before Launch: How’s this for a compelling example? In a Space Planning Community webinar in August, Deloitte Consulting Specialist Master Alecia Reed outlined how a major discount grocer tested nine different virtual layouts in a “digital twin” of an existing store with more than 300 people per layout. “When’s the last time you’ve had that amount of feedback prior to even setting it in store?” Reed asked.
Which parts of an organization are most likely to work with these tools?
Vendors surveyed by ARC indicated that Shopper Insights, Category Management, Sales, Account Management, and Space Planning were all functions that utilized these tools in some form or fashion. As a rule: the more functions who can use it, the better, given the need to win support to purchase this sometimes-expensive technology. Vendors will also provide training and customer support to ensure adoption.
These tools sound very helpful for retailers and CPGs, but are there any hurdles to widespread implementation?
The obvious one is cost, as major projects can reach six figures. In short, the bigger the budget, the more likely it would be for retailers and CPGs to work with these tools.
That said, there are ways for companies with smaller budgets to get the VR/AR experience. For starters, vendors we surveyed noted that project sizes and costs varied, and that smaller projects/scopes were possible. As always, it never hurts to ask before assuming something is out of reach.
Secondly, smaller retailers might be able to get some of the VR/AR experience via larger CPGs, who can be willing to pay to view their product in a virtual setting, as one industry VR/AR expert told us. Companies with existing virtual planograms (i.e., Blue Yonder) can utilize those as well, reducing the cost of developing those separately.
How do these tools figure to be used in the years ahead?
Those surveyed believe virtual tools will lead to stores and product mixes more uniquely tailored to the shoppers of an individual store. Steve McLean, the CEO of ReadySet Technologies, sees “localized assortment optimization nimble enough to respond in real time to both behavioral and situational inputs” as a major trend to watch over the next 3-5 years.
“Based on what we hear from clients, AR / VR will be increasingly prevalent in enabling localization, specifically in terms of planning / decision making, execution and maintenance of store plans,” said Melissa Jurgens, Chief Operating Officer at InContext Solutions.
What does this mean for space planners?
Technology is here, and it’s only getting more prevalent. The upside should be obvious: better data, faster tools, localized store layouts, all trending toward the end goal of creating that special bespoke experience for the shopper. It’s no longer a one-size-fits-all world. Custom is in.
For space planners, that’s good for business.
Want to chat more on space planning and technology? We’d love to keep the conversation going. Email Mike Wilkening: email@example.com.
About the Author: Mike Wilkening, Communications Manager, for the Association of Retail and Consumer Professionals (ARC).
Mike brings more than two decades of communications experience to the CMA/SIMA. He began his career in journalism, spending more than 10 years covering the National Football League for Pro Football Weekly and NBC’s Pro Football Talk. His bylines have also appeared in CBS MarketWatch, the St. Louis Post-Dispatch, NBC New York, and ESPN.com. More recently, he has pivoted to corporate communications, including strategy and messaging experience for a Fortune 500 company. Mike holds a master’s degree in journalism from Northwestern University and a bachelor’s degree in accounting from the University of Illinois.