Virtual circles

CASE STUDY: New technology means that manufacturers can test the positioning of their products in virtual retail environments. Charles Ilsley reports

The advent of the 'virtual' store has revolutionized the pre-testing possibilities of store layout and merchandising. With the use of sophisticated computer graphics, it is possible to create any retail environment, such as a supermarket, convenience store or petrol station. And by employing highly developed, but easy-to-use, software, consumers are able to 'shop' the virtual store as they would their local store.

It is possible to replicate the current store layout and see how consumers 'shop' it in terms of their movements round the store; the products they look at on shelf (browsing); the products they pick up and look at (selecting); the products they purchase; and the time they spend shopping the 'hot spots' on shelves. It is also possible to ascertain the reasons for their behaviour and their attitudes to the store layout.

This new technique is called Discovery and, as its name implies, it reveals how new marketing and merchandising approaches will perform in real life.

Discovery has been successfully used in both the UK and US markets covering all types of retail outlet and a broad range of product categories including soft drinks, confectionery, household cleaning products, personal hygiene products, children's food products and many more.

The Discovery technique has been validated by comparing the shopping habits of loyalty card holders with their shopping in the virtual store – and also by comparing the effectiveness of merchandising in the virtual store to that achieved in a test market.

A recent study carried out for Yoplait Dairy Crest makes a good example. The dairy drinks market is experiencing very strong growth, with major brands competing fiercely for shelf-space and promotional slots. Yop, a yogurt drink, is performing well with strong TV support, but Yoplait wanted to gain more support in major accounts. It therefore needed to understand where this product would be best placed in-store to ensure that it achieved maximum sales.

There were five layouts in the study (the current layout, plus four alternatives) and each respondent 'shopped' one of them. A sample of 500 respondents, who had purchased flavoured milk or yogurt drinks at Tesco in the past month, were interviewed at central locations in the North, Midlands and South.

Each respondent was shown the virtual store environment, given an explanation of how it worked, and allowed to use it until they were comfortable and at ease with the methodology. They were then asked to assume that they were doing their main household shop at their local supermarket for chilled dairy products and drinks.

The brand share data produced by the virtual store shopping closely replicated IRI data. And the layout which showed the largest increases positioned Yop with flavoured milks. This layout increased both the number of interactions with products in the aisle and increased the value of the total basket.

Sue Tiller, customer marketing controller at Yoplait Dairy Crest, comments: "This was an extremely important piece of market research for the Yop marketing team, and we were delighted with the Discovery project. The results have confirmed our positioning and merchandising strategy for Yop and will enable us to present key recommendations to the trade very soon."


Charles Ilsley is research director at 5th Dimension Solutions

June | 2005