COMPASS: What key challenges do CPG and retail companies face when it comes to optimizing brands and categories?
GUILLAUME PORTIER: Retailers need to optimize efficiency and enable a consistent experience for shoppers across all channels. Services such as click and collect now represent more than 10% of total turnover for food retailers in France. Retailers need to make sure their staff can quickly locate the products customers have ordered. Often, trainee staff or interns will do the picking. With thousands of stockkeeping units in the store, they can’t know exactly where every item is located. That presents a challenge, as a misplaced item can mean a missed sale.
In addition, retailers need to ensure they are compliant with agreements on how and where they display the brands they sell. To be productive and effective, traditional retailers and stores need to evolve and capitalize on the digital possibilities.
What is the background of the Virtual Store project among SES-imagotag, Atos and Dassault Systèmes?
GP: There are some great synergies between the partners in the project. Our vision was to combine our knowledge and capabilities to create a virtual 3D replica of the store that provides real-time information on every product. This is done using electronic shelf labels (ESLs) and 3D models to connect the physical store to a virtual model.
We first tested the concept three years ago in a small store in France, and today it is also live in a superstore near Paris. The project is initially focused on optimizing the supply chain and helping the superstore to locate every product it has in stock so it can ensure efficient click-and-collect services.
How are you using innovative technologies in the project?
GP: ESLs are already used to provide smart displays for shoppers, but now we are using a geolocation system to enable those ESLs to give store employees the precise location of each product. This information is gathered by the software to provide a perfect 3D view of the store so the retailer can see where the products are in real time. As soon as they move a product you can see in 3D what is occurring, with all the associated key performance indicators. By converging these technologies, we can enable each store equipped with the system to compare its theoretical plan with the reality in the store. The result is real-time visibility to merchandising compliance, enabling retailers to make faster and smarter decisions.
What benefits has the project delivered so far?
GP: It provides precise, real-time information on the location of products, so the retailer can use it to improve the picking of products in-store. Before the project, staff at the superstore were able to pick up to 50 products per hour, but now they pick more than 100. They are also able to increase basket size because, if a product has been misplaced, they are now able to find it when they might otherwise have thought it was out of stock.
The system can also enable real-time reporting on whether the retailer is complying with its agreements with brands. It allows a new way of working with those brands, because retailers can try out changes in the 3D model to see if they work better. It can change the way retailers do business, with more data, greater precision and increased compliance, enabling a much better return on investment.
The digital opportunity today is to transform the supply chain from beginning to end. There is a lot of data from the products themselves and from customers’ interactions with ESLs. Retailers can capture that data in real time and analyze it to improve the positioning of products on the shelf and deliver a better shopping experience.
What achievements of the collaboration give you the most satisfaction?
GP: The real challenge is to make an innovative solution run in a real store that operates every day of the week with real customers. Because of its innovative nature, the Virtual Store project involves an ongoing process of assessing how things work and making corrections, and it’s important to work with a real store in order to demonstrate how the solution can benefit real businesses. This project began with a shared, disruptive vision, and the partners worked together to align our teams and identify a customer who was ready to take part. I am proud of our achievement in doing that. There is a lot of enthusiasm for the project from everybody involved.
What is the next step?
GP: There is so much we can do with the Virtual Store, and a lot of our achievements are still ahead of us. The primary aim today is to enable merchandisers, supply chain managers and IT managers to build ultra-efficient stores.
Ultimately, we are providing a powerful application to enable the omnichannel revolution by helping retailers to transform their business. There is potential to embed more modules and functionalities in the future, and retailers could use the 3D model of their store to enhance the online shopping experience for customers. They will be able to reimagine the way they merchandise and promote a product with 3D. ◆
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