By Susan Olivier, VP Consumer Goods & Retail Industry Solutions, Dassault Systèmes
More than a century ago, Italian economist Vilfredo Pareto noticed that the vast majority of his country’s land was owned by a small percentage of the population — and coined the “Pareto Principle,” stating that 20% of input creates 80% of results. For more than one hundred years, retailers have held firm to the tried and true notion that most of their sales come from a small amount of their customers and have developed strategies to foster loyalty — and recurring revenue streams — from those top customers. These strategies have taken the form of discounts, giveaways, loyalty cards or “premium” memberships — all executed with the same goal: to keep the best customers happy.
To be successful in today’s world, however, retailers cannot just assume that their top customers will keep coming back — they must understand new trends and react quickly to changing customer demands. Even loyal customers have a wealth of choices and options to find what they need — and all it takes is one bad experience to turn someone away for good.
In the past, monitoring and identifying new trends was done through surveying focus groups or holding face-to-face sessions, where a small group of customers were quizzed and paid for their opinions. Today, smart retailers can gather the same data using virtual 3D technology to realistically simulate how a customer interacts with a product or store layout.
Enter The Third Dimension
The advent of 3D design technology is changing retail — it’s not just for designing products, it’s for designing experiences. With applications that facilitate global collaboration of product design, inventory optimization and even product shelf placement, retailers are using 3D technology both to create better products and to deliver a better customer experience.
Until recently, 3D in retail might mean finding better, cooler or more streamlined ways of bringing the customer to the store. But now, retailers across the globe are using 3D to bring the store to the customer and create the ultimate consumer experience.
Cutting-edge retailers are now able to create a virtual 3D model of their shopping environment. The benefits are obvious — the ability to make faster, more informed decisions on assortments and product placement before actually installing physical products, ultimately leading to improvements in how retailers showcase products and maximize sales. These models also share the retailer’s vision of how products should be displayed with store teams.
But getting back to our Italian economist friend, what’s not so obvious is how this can improve the relationship retailers have with their best customers.
Imagine taking the stale concept of focus groups, flipping it on its head and creating a unique 3D experience allowing your most important customers to browse a virtual store. Let’s say you invite 10 of your most loyal customers and engage them by providing $500 virtual dollars (which could be exchanged later for a gift certificate or other incentive) to spend in this 3D environment.
Never mind the positive affiliation and brand loyalty that goes hand in hand with delivering a genuine “wow” moment; imagine the insights that could be gleaned watching the way customers navigate a store’s layout, providing real-time feedback on inventory and interacting with merchandise. Instead of hearing a description from a customer about their preference for a blue scraf rather than one in purple, retailers can see the customer preferences in action. Where do they head to first in the store? What merchandise to they pick up but then put down? Watching a customer spend $500 in virtual money can save hundreds of thousands in real money.
These types of interactions and experiences are happening now, and smart retailers are already reaping the rewards.
Since its inception, 3D technology has been seen as a game changer for retail. As the technology evolves and improves, retailers continue to find new and exciting ways to derive value from this extremely powerful tool – fundamentally changing and improving the relationship between retailers and customers.
It’s probably not exactly what Vilfredo Pareto had in mind, but the concept remains true.
Dassault Systèmes, the 3DEXPERIENCE Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes’ collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 170,000 customers of all sizes in all industries in more than 140 countries. For more information, visit www.3ds.com.