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Extended Reality is Changing the Retail Merchandising Game—Here’s How

Think virtual reality is just a fun techie toy for gamers and fanboys? Think again.

Extended reality, the catchall term for the family of technologies that includes augmented and virtual reality (VR), is growing up and into new applications for retail enterprises looking for ways improve their merchandising operations. News from Walmart and Accenture hints at where this innovation can take a retail industry roiled by change.

Seizing upon the excitement around the upcoming theatrical release of How to Train Your Dragon: The Hidden World, DreamWorks Animation and Spatial&, born from Walmart’s Store No 8 innovation arm, teamed up to create a virtual reality experience immersing consumers ages 8 and up in the world of Toothless, Hiccup and the rest of colorful cast of characters. Consumers visiting the virtual tour sit in a Positron motion VR chair powered by HP’s VR backpack to immerse themselves in the Hidden World.

Spatial&’s first activation, the virtual tour will pop up in 16 Walmart parking lots across Arizona, Arkansas, California, Nevada and Texas between Feb. 15 and April 9 with a curated gift shop offering movie-branded merchandise from dragon-printed pajamas to plush toys and DVDs. Two thousand Walmart stores will carry a limited assortment of pop-up products.

Spatial& leverages virtual reality-infused commerce to create “next generation merchandising experiences using cutting-edge technology and storytelling tools,” according to the Walmart release announcing the VR collaboration. The startup is based on the vision that “VR will transform merchandising and retail,” Spatial& CEO Katie Finnegan added.

Scott McCall described the VR project as Walmart’s latest effort to “enhance the experiences of shoppers across the country.”

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While Walmart’s VR blends commerce and entertainment, Accenture, Qualcomm Technologies and Kellogg worked together to create a smarter and faster approach to in-store merchandising. The Accenture Extended Reality group built a VR merchandising solution using Qualcomm’s VR headset and platform, Cognitive3D’s eye-tracking data analytics, and mixed reality software from InContext Solutions, a firm focused on XR solutions for retail optimization and shopper engagement.

By putting a simulated store into an XR headset, brands and retailers can quickly and cost-effectively experiment with layouts and product placements while also recruiting more consumer participants from outside the typical major urban hubs and regions, driving more comprehensive insights. Data gathered from the eye-tracking tech shows how consumers interact with the store set-up—the products they engage with, what they ignore, how they navigate the simulated environment and factors that influence interactions and purchases.

Patrick Costello, Qualcomm Technologies’ senior director of business development, touted VR’s “transformative value to the enterprise.”

Kellogg was launching a new product, Pop Tarts Bites, and wanted to identify the best way to position the snacky breakfast entrant on store shelves. Compared to traditional market research methods of fielding surveys online and conducting tests inside consumers’ homes, the companies said the VR approach gleaned richer behavioral insights that bucked conventional merchandising wisdom. Most people expect new products to appear on higher shelves but the VR experiment revealed that the Pop Tarts Bites performed better on lower levels, driving an 18 percent lift in brand sales during the trial.

“Our VR merchandising solution has the potential to transform product placement by examining consumer buying behavior in a holistic way,” Raffaella Camera, global head of innovation & market strategy for Accenture Extended Reality, explained. “By combining the power of VR with eye-tracking and analytics capabilities, it allows significant new insights to be captured while consumers shop by monitoring where and how they evaluate all products across an entire shelf or aisle. Ultimately, this enables product placement decisions to be made that can positively impact total brand sales, versus only single product sales.”