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Sterling Ross-Harrington

Sterling Ross-Harrington

Planograms: Incorporating Augmented and Virtual Reality

Planograms

Let’s start off with the basics before diving into the rapidly evolving world of planogram technology.

Visuals

Planograms, or POGs, provide a visual depiction of the optimal locations to place products in a merchandizing environment.  This technology takes in a variety of inputs like unit price, unit cost, and shape. Rather than organizing the products arbitrarily, a planogram would facilitate the creation of the most cost-effective layout. This allows for retailers to reduce expenses, increase sales, and improve the overall customer experience. Currently, most planogram software consists of basic two-dimensional images. This image must then be interpreted and executed correctly into a three-dimensional space. However, soon enough, this will not be the case.

Source: SMSB Consulting Group

Data Management

The implementation of a planogram allows for the retailer to gather an abundance of valuable data. There will be a testing period in which product placement is analyzed and optimized. This gives the retailer information regarding the relationship between product placement and consumer purchasing behavior. Strategies can then be developed in order to profit from this data. For instance, certain items may be placed near each other in order to influence the consumer to make an unplanned purchase. Not only does this increase the profits of the retailer, it also gives the consumer opportunities to benefit from current sales or discounts. This data is used in a similar way to targeted advertisements that you would see online. Consumers are presented with items that they may not have been aware about or are more likely to buy.

Cost Reduction

There is a plethora of costs when it comes to organizing a store, whether it be labor costs or additional shelving space. These costs can be unexpected depending on current stock of a particular item or even the product sizing changes. For example, when adding a new item, it may be possible to find space for it by reorganizing the current layout rather than adding a new shelf.

Upcoming Technology

Now here is where it gets interesting – virtual and augmented reality are working their way into planogram technology. You may be wondering what the difference is between the two.

Virtual Reality

When you hear the term virtual reality, or VR, you probably think of those silly games that kids are playing nowadays. However, this technology is becoming more and more prevalent in our daily lives, whether it be visiting another planet or even allowing a handicapped person to walk around the city. Virtual reality works by deceiving the brain into believing that the three-dimensional images or videos displayed are actually real. The headset tracks the user’s movement, eyes, and their position relative to their starting location.

Augmented Reality

On the other hand, augmented reality combines the real world with digital aspects via a headset or even a camera. This allows for the user to see objects interact with the world around them. Some groundbreaking devices include Google Glass and Microsoft HoloLens. But why is all of this important?

Source: Pixabay

Virtual and Augmented Reality Merchandising

I’m sure at this point you see the value in planograms. However, the current technology is very limited in regard to the visual depictions and expected outcome. Previously, you had to imagine what the actual shelves will look like based on the two-dimensional images. Virtual reality software allows you to walk around in a digital version of the store and see exactly how it will look based on the planogram. This not only improves that planning process, it also allows you to put yourself in the shoes of the consumer. This technology is not limited to the allocation of shelving space; it also allows the retailer to simulate different layouts and floor plans.

Augmented Reality planograms serve a slightly different purpose. With AR, retailers are able to view their empty shelves or even vending machines in the real world. They are able pick up digital items and place them on the physical shelves in a store. While this may seem difficult, it is actually very simple. The Microsoft HoloLens, for instance, can scan the area around you with various cameras and automatically upload a store to a digital environment.

Virtual Reality also enables a retailer to test and survey people regarding product placement even if they are across the world. Location is no longer a limiting factor when it comes to consumer testing. Furthermore, VR also vigorously tracks eye movement which gives the tester a considerable amount of useful data. Some of this data is completely unique to virtual reality. Consumers may subconsciously glance at a product that they believe to be visually appealing. Retailers will be able to connect information regarding their eye movement to purchasing behavior.

The Future

This disruptive technology is beginning to change every aspect of store planning. From consumer habits to three-dimensional planograms, virtual and augmented reality will save time and money for retailers. It is very interesting to ponder what the future of this technology holds. Will consumers eventually be able to walk around a virtual store from their home? Will this lead to planogram automation based on machine learning? We will just have to wait and see.

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