DIGITAL SOLUTIONS
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The Retail Innovation Challenge:
Change Agents & Virtual Reality’s ROI

The Wall Street Journal recently reported that “grocery-store chains around the country are
building new stores that have less space for traditional packaged foods in the center aisles,”
which means maximizing the return on shelf space is more important than ever. Questions like,
“How does a national brand get on the shelf?” and “How can we differentiate beyond price?” are posed daily. Retailers and brands want to know how to make their own experience memorable and different, but the resources to do so are already stretched thin.

More and more companies are implementing zero-based budgeting systems to keep costs in check and reduce unnecessary spending, while mergers, acquisitions and consolidations are ramping up in an effort to offset declining growth rates within center store categories. The financials are an easy equation when topline growth is stagnant: reduce costs, focus on acquiring high-growth businesses, and minimize the exposure of poor performing businesses.

While these strategies can address short-term growth expectations, the question becomes how do you drive sustainability in the new norm? One solution that InContext customers are turning to involves shifting the mindset of talent to focus on adopting new capabilities, techniques, and technology. Driving this attitude requires organizational change—and an openness to evolve how we have always done business.

The Challenge to Innovate
Even in good times, businesses tend to stick with tried and true methods— many of which the food, drug, and mass industry has been using for years. Employees are changing roles on a regular basis to drive professional development, which can limit the chances we are willing to take during our rotation in any given role. Change can be overwhelming, and to many it means risk—and dollar signs.

According to a 2016 MIT Sloan Management Review and Deloitte digital business study, “nearly 90 percent of surveyed participants anticipate that their industries will be disrupted by digital trends to a great or moderate extent, but only 44 percent say their organizations are adequately preparing for the disruptions to come.” There are a few reasons why today’s manufacturers may be holding back from leveraging technology to make transformative changes in how they do business:

  • It may seem inconvenient to learn a new platform and implement it company-wide
  • They don’t know how to calculate ROI of new technology versus traditional methods
  • Pessimistic outlooks toward the fate of brick and mortar obstruct change.

If you want to win at retail, you have to change the status quo. One way is to invest in new solutions that help your business operate more efficiently and drive your organization to think differently. Luckily, there are solution partners for retailers and manufacturers that are helping do just that. But effective execution requires a well-rounded leader who has a vision, and has the support of leadership to evolve business process.

The CEO of a multinational manufacturer—and one of our leading clients—has said “to win at retail we need to evolve how we get to market; we no longer have the luxury of taking our time to develop innovation, evaluate it, and activate it with our consumers and shoppers. Speed is currency. We need to fail fast, and learn from our mistakes.”

They have done just that. By focusing on an enterprise deployment of tools and capabilities that allow them to develop ideas, test those ideas with real shoppers in a matter of days, and activate their learnings in market, they have successfully turned around a declining center-store business. These ideas aren’t limited to new products or packaging, but innovation across all functions including sales, category management, shopper marketing, shopper insights and more.

A Change Agent
Enter VR. Virtual store simulations have been around for years, yet very few have realized the value of VR and its impact on a return on investment. That’s because VR historically has been a costly, centralized capability used primarily for customer presentation: a wow factor. That all changed with the launch of ShopperMX™.

Fluctuations in shopper behaviors affects packaging demands and food trends. It also affects how manufacturers and retailers have to look at their store footprints, categories, trade dollars, and more. Adapting to those changes can take months and years when you think about the time it takes to come up with a new concept, test it and implement it through collaboration between manufacturer and retail partners. It can also be a huge budget buster, which translates to huge risk when you’re not confident that those changes will result in a return on investment.

ShopperMX™, our enterprise VR software platform for retail, is a leading change agent company leaders have been implementing when it comes to staying competitive in today’s retail industry. Those that are effectively adopting the solution are seeing significant return on their investment, tied to real dollars and cents. How?

Whether you’re a manufacturer or a retailer, ShopperMX™ optimizes these key areas of the go-to-market process across your organizational functions:

It is inherently risk-free: New concepts are created and iterated within a virtual space, eliminating the need to build physical mock stores or new products. The elimination of physical prototyping reduces costs significantly. New concepts are created and iterated within a virtual space, eliminating the need to build physical mock stores or new products. The elimination of physical prototyping reduces costs significantly.

It saves time: Making real-time concept changes only requires a mouse and a computer, and is done in a matter of minutes, rather than weeks. Understanding how these changes may impact shopping behavior at the shelf used to take months through rigorous controlled store, mock store, or virtual testing. With ShopperMX™, this now takes two weeks or less. Communicating the results to your sales organization or business partners can be streamlined and provides more rigor to your materials by repurposing the VR content produced.

It creates a collaborative environment: Working within an enterprise VR platform removes silos and closes the loop between teams, and between manufacturers and their retail partners. Multiple teams in different locations can make notes, suggest changes and demonstrate new ideas in real time.

It improves manufacturer/retailer engagement, and ultimately ROI: Because that’s the goal—implementing new concepts that resonate with shoppers, all while saving time and money and improving the bottom line. You can do all that with virtual.  

                                                             
This article was provided by InContext Solutions. For more information: www.incontextsolutions.com.

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