Consumer packaged goods (CPG) manufacturers and retailers invest time and money to develop planogram layouts that indicate where they should place specific products in order to maximise in-store sales. However, once these planograms have been executed at store level, they often end up buried in a file that is only dusted off and used again as a starting point when they are ready to review and decide the placement of the next line of products. In the meantime, if retailers want to know how a specific product is performing in relation to the planogram, they need to pull data from a few different systems and, in many cases, manually input the data into the file and check it against several key performance indicators. Meanwhile, they usually have to wait to make any changes until a new planogram is developed during the next planning cycle. In a way, it’s a rather two-dimensional static planning process that repeats itself season after season, year after year.
Dassault Systèmes has identified a significant opportunity for CPG brand manufacturers and retailers to use virtual technology to drive better, faster and smarter decisions for the real world. Virtual technology enables retailers to move from a static environment to a more dynamic one, where they can model virtual shelves and stock them with realistic 3D product representations built from 2D pictures. This allows them to design shelf layouts more efficiently, view and experience them through the eyes of consumers, and augment shelves with real-time business indicators to enable them to make informed decisions. Consequently, the shopping experience design process is much quicker, while the layouts are more flexible and costs are lower.
Recently, Dassault Systèmes combined our online 3D virtual merchandising tool with Store Electronic Systems’ (SES) electronic in-store shelf labels to create an end-to-end digital tool that helps retailers to plan stores and ultimately, become more profitable.
Named the Store Digital Twin, the solution is designed to make the virtual shelves in the planogram more connected to the real shelves in a retail store to ensure that the store layout planning process is more productive and effective. The idea of a ‘digital twin’ solution can link the virtual and physical world has been commonplace in the manufacturing and heavy industries sector for some time, but has only recently been reimagined for use in the retail sector.
The Digital Twin looks like an immersive 3D virtual environment, which not only incorporates the actual dimensions of the product and store fixtures from the physical world, but also uses real-time store level data to help retailers to track out-of-stock levels and sales. This data allows them to develop more effective merchandising strategies.
In a recent live pilot with a French retailer, SES built geo-referencing indicators into its shelf labels to record the precise position of each product. The layout of the physical store shelf was integrated into Dassault Systémes’ 3D Perfect Shelf merchandising solution by Atos, an international IT services company. This product location information is then combined with sales data and entered into a ‘digital twin’ of the store to create a precise merchandising solution that relates to actual store sales. This provides retailers with real-time insights into store performance, enabling them to optimise a department’s item layout to ensure it appeals to customers and leads to sales.
For example, the management team can immediately analyse whether the store layout complies with the planogram and instantly inform the store if they need to make changes. Similarly, they can analyse a particularly effective planogram in a cluster of stores with high sales numbers and send associates in less successful stores real-time notifications about shelf layout updates via their mobile devices. They can then quickly make changes to shelf layouts and optimise sales.
Consumers will also benefit. For example, they can use geo-location functions that have been integrated into the retailer’s customer-facing mobile app to easily locate items on their shopping list.
At Dassault Systèmes and SES, we believe that renowned brands and retailers will increasingly use 3D virtual store planning technology and intelligent label, both to enrich the shopping experience for consumers and drive better business results.
Philippe Loeb is vice president of consumer packaged goods and retail at Dassault Systèmes
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