By Alex Pejak
3D virtual store research sounds exotic, and in many respects it is. But if you’re selling to businesses, there’s a lot this normally consumer-focused technique can teach you about how to improve your sales. To be sure, you probably will not be putting on 3D glasses when you walk into the next marketing meeting any time soon. Still, the combination of cutting-edge technology with a hard-line numbers-focused approach in many respects represents one of the most sophisticated market research methods the world has ever seen. Let’s take a look at what it is, and what you can learn from it.
What is 3D virtual store research?
When it’s crucial to extract every possible percentage point of market share from your market, as it is in many consumer goods businesses, market research becomes an entirely new game to play. It’s simply a matter of figuring out how your business can sell more goods, more quickly, more efficiently, and at a higher profit.
Consumer goods marketers therefore use a whole battery of techniques to observe their customers. They will accompany shoppers to stores and watch them as they make their purchases. They will interview them before they go into the store and after they come out, or using text messages or web based surveys. They may have shoppers wear special eye-tracking glasses to see which packages draw their eye. Or, they may have shoppers sit down and visit a ‘virtual store,’ either online or in a special facility.
Virtual stores can be as simple as a web-based application which shoppers can use from their home computer, displaying a virtual ‘shopping aisle’ with different products that they can pick up, examine, and ‘purchase.’ They can also be as complex as fully immersive 3D environments in a special ‘Cave’ style facility.
In either case, the virtual store allows the business to test many different packaging designs, prices, and shelf layouts in order to see what maximises sales. The manufacturer Johnson and Johnson, for example, used a virtual store to determine that paediatric products should be separated from adult products, and both infant products and children’s products should be arranged by ailment in order to allow customers to find what they want quickly.
Procter and Gamble, on the other hand, has found that the time to design and qualify new packaging has dropped by more than 50% since they started using virtual solutions. In one cases, they used it to let the consumer refine the packaging of a product to a design that met their needs in a way commercial designers couldn’t match.
Where is it used?
Product development for any kind of business tends to proceed through five main phases:
1. Initial brainstorming and new idea collection
2. Evaluation of the market
3. Product design
4. Prototyping and initial market testing
5. Product launch
Virtual product research and development can aid all five stages. In particular, implementing a virtualised research method in the early phases often greatly improves the success rate when things go to launch.
The fact is that testing products and product ideas is often extremely costly as well as time consuming. With virtual R&D, businesses can test early and test often, and do their testing inside a simulated virtual environment where the competition won’t hear about new designs.
Virtual R&D techniques also allow businesses to answer questions which simply can’t be answered with most other methods, at least not economically. For example:
– What image does a given product or design project to the customer?
– Does changing the packaging or design make potential customers more likely to purchase the product?
– Which price is optimal to maximise sales volume? Which price maximises overall profit? Which price will maximise market share?
– How much sales volume is a new product likely to generate in the first year after launch? How will changing a given product’s design or packaging affect sales volume?
Knowing these factors in advance makes it much easier to make consistently accurate marketing decisions. Few managers indeed would pass up the opportunity to find out beforehand whether a given product launch is likely to succeed or fall flat.
What are the B2B applications of virtual R&D techniques?
Anywhere the business needs to understand how the customer will interact with a given product or design, virtual R&D methods can provide a significant boost to operations. For example, one firm which provides “virtual store” experiences also uses their expertise to aid in creating maximally effective websites and even for planning stadiums. Construction, remodelling, and architecture firms regularly use “virtual store” type techniques to find out which designs will work best in the real world — and to help the client understand what the final product will look like.
In a larger sense, the takeaway from virtual R&D for most business is the focus on testing, and letting the consumer tell you from their actions — rather than their words — what they truly want. By hovering over their ‘virtual shoulder’ as it were, it’s possible to gain insight into the customer’s thinking which are not available any other way.
Alex Pejak is an economist currently working on a few projects in Australia. She is interested in topics related to market research and project management. You can follow her at @AlexPejak.