Increasingly, global retailers are making use of virtual reality to market and improve the in-store retail experience. Researchers are also starting to think outside the virtual reality box – suggesting it not only as a way to market products and advertise, but that VR is an avenue for gathering data and better understanding consumer behavior as well.
It turns out, VR has been considered a research tool for decades. As early as 1996, Marketing Professor Raymond Burke at the Kelley School of Business provided proof that that virtual market research provided an accurate prediction of brand market share as well as sensitivity to price by supermarket buyers. Since the early 1990s, large corporations such as Procter & Gamble, Intel Corp., ConAgra Foods, Frito-Lay, and Goodyear Tire & Rubber have been experimenting with various rudimentary versions of store simulation to observe and analyze consumer behavior in-store. However, the use of wide-spread virtual reality for market research has been slow to catch on. In fact, even as recently as 2014, “a heated debated was sparked as to whether businesses could really use the technology to good effect,” reports Forbes.
However, as VR becomes cheaper and more mainstream, there is a growing community of folks rooting for the use of VR for market testing. Those in favor generally suggest two ways that virtual reality can be utilized to better understand shoppers. The first is providing a virtual reality of the environment that the product is intended to be used in, and the second is observing consumer behavior in a virtual reality setting like a retail environment.
The first is best utilized when testing a new product, or attempting to make adjustments to an already existing product. Virtual reality comes in handy if the product in question is meant to be used in a specific setting, say, the middle of the ocean. That’s a bit harder to test on consumers in the physical world. With widespread use of home VR devices, make reaching folks whose expertise or demographics fit the consumer profile will continue to get easier.
Outdoor equipment retailer, The North Face, is making use of virtual reality in a similar way. In their Manhattan store, they provide virtual reality headsets so their customers can go “hiking,” “rock-climbing,” or “base-jumping” without ever stepping foot out of the brick and mortar store. The intention is to get them excited about the outdoors, and to use their equipment when they plan for these activities. While the intention is marketing rather than market research, The North Face or other similar brands whose products can’t be tested in store settings can start to make use of virtual reality by having customers interact with their products in a virtual setting and providing feedback. By doing this, retailers can better understand the positives and negatives of the product, make improvements to existing products, or test the market viability of a new product.
It’s easy to understand how this could have benefits for consumer testing of new products in any number of product categories. Creating a digital design is much less expensive than a fully manufactured product, while still leaving ample room to make improvements. If you’ve heard of the phrase, “test early and often,” imagine answering key questions about the practical and realistic use of products long before they need to be actually produced.
Since 2000, the Ford Motor Company been using simulations to create better designs. Even more recently, they’ve fully integrated the use of virtual reality, using the Oculus Rift virtual reality headset to interact with their designs and concepts, viewing them from the outside or sitting inside the virtual vehicle. This allows engineers and product developers to see the car the way a customer would in order to make adjustments and improvements to the design before it’s actually manufactured.
Specialty research firms have been creating virtual store environments and asking consumers to “shop” the store for close to a decade. Now, using VR headsets, researchers are able to reach consumers all over the world and ask them to perform their grocery or big-box store trip, in the virtual environment. Observing the way customers shop reveals a lot about store set-up, brand labeling, shelf organization, and more.
While this kind of research can be conducted in an actual store, virtual reality makes it easier for researchers to control and manipulate the environment. For example, in a virtual reality, researchers can easily change the environment, adjust the layout, add in various stimuli, or avoid distractions such as other shoppers. During the session, marketers can also speak to the consumer interacting with the virtual environment, asking them why they performed a certain action, what drew their attention to a product, or why they put a product back on the shelf. In this way, virtual reality becomes a kind of live-action survey. But because the “survey taker” is actively moving throughout the environment and interacting with the products, the “survey” is a much more reliable one.
A great addendum to the virtual reality market research experience is eye-tracking. Observing where customers’ eyes go says a lot about what draws their attention and what does not. Combining eye-tracking with virtual reality means that market researchers can observe both conscious and subconscious consumer behavior. While customers may consciously interact with their virtual environment, often times their eye movements are involuntary. The ability to observe both behaviors, and see what involuntarily draws consumers’ eyes can provide invaluable insights.
In a study on Measuring Behavior, virtual supermarkets are being employed to study customers’ reactions to price changes of food products, emotional responses to retail environments, and responses to emptied shelf space. They tested the virtual environment against a more traditional method, such as product pictures.
The study found that participants were more likely to buy products in lab conditions than in a physical store. However, the study concluded that the virtual reality simulation of a store was superior to more traditional forms of market testing. The conclusion was based on the fact that, since a virtual reality sequence more closely resembles a physical store, the behaviors of consumers more closely resemble the behaviors of consumers in a physical store. The researchers suggest that retailers could benefit from the use of virtual reality in testing consumer behavior.
Although some form of virtual reality has been around for nearly three decades, market researchers have been slow to integrate it into their market research strategy, choosing instead to implement it for marketing gimmicks. However, the evidence says that using virtual reality for market research is an invaluable method of gaining insight into consumer behavior and testing the marketability of products. One day this method may be indispensable.
It’s clear that wherever there are consumers, there is going to be innovation within the retail space to keep up with changing demands. We will continue to see technology and other tactics employed for retail spaces around the world, with innovative businesses at the forefront of the consumer experience.
If you’re looking to better understand how innovations in technology and the retail space affect consumer behavior, contact us using the form below.