Edgewell Gains with Shoppers, Retailers via Virtual Reality

By Dale Buss

Edgewell spent about a decade assembling and integrating the various CPG brands that became the basis of today's $2-billion-plus house of brands, a roster reshuffling that also included the departure from Energizer last year and a formation into a new company.

Now Edgewell is pivoting with more determination toward in-store management of the categories in which it plays major roles. To that end, Edgewell and its brands—which include Schick, Edge, Banana Boat, Hawaiian Tropic, Playtex, Carefree and Stayfree—have been harnessing virtual reality (VR) technology along with planogramming software to gain strategic advantages in its markets and with key retailer customers.

“We realized through surveys and talking with retailers that we had the opportunity to significantly improve our approach to category development. To do this, we started by developing strategic visions in each of our categories to increase customer and shopper engagement,” Michael Law, senior director of customer strategy and planning for Shelton, Conn.-based Edgewell, told CPGmatters.

From there, Edgewell and its brands figured out exactly how they were going to achieve greater shopper engagement. The combination of virtual-reality technology and planogramming software – with shoppers serving as the guinea pigs – became key.

“It’s kind of become table stakes with CPG manufacturers that want to influence their large, sophisticated [retailer] customers who want to be able to see their planograms the way that the shopper engages them,” Law explained. The problem with images that attempt to accomplish the purpose in only two dimensions is that “they are very flat and don’t allow you the richness of being able to see how the shopper will engage the set, or the opportunity to do a virtual-shopping excursion, or to do a quant test.”

Working with InContext Solutions, a global leader in scalable, cloud-based virtual-reality shopping and retailing solutions, Edgewell engaged consumers on desktops with virtual reality shopping simulations that allowed them to virtually “pick up” items, turn them around to read labels and ingredients and marketing messages, and then “place” them in their shopping carts. “This is much more cost efficient than doing an in-store test,” Law said.

Edgewell is attempting to use this solution to drive specific best practices around product assortments and merchandising in the classic “four Ps” of category management—pricing, promotion, placement and product—Peter Seidita, director of category development, told CPGmatters.

For example, the sun-care category “includes several hundred SKUs,” Law explained, “so that it is a very confusing category. And then you lay on top of that all of the SPF [sun protection factor] numbers. So it is confusing for shoppers, and if you reduced the assortment, shoppers might be less confused—and sales would go up as the shopping experience was less frustrating for them.

So, with one large grocery customer in the sun-care category, Edgewell conducted VR tests with shoppers to see how they might react to limiting the assortments that brands put on the stores’ semi-permanent seasonal display—and what the effects would be on shoppers as well as on sales and profitability in the category.

“It’s still early,” Seidita said, but initial results with VR testing showed that category sales growth under the optimum planogram would be 3.5 percent.

Edgewell competes in a number of highly competitive CPG categories in a slow-growth environment for retailing these days. It seems that the more they can get consumers to shop a virtual store simulation for a while and give the company their opinions, the further ahead Edgewell and its brands are.

In fact, what Edgewell is doing with VR is just one arena of digital big-data and predictive-analytics applications that CPG brands and grocers will have to develop, deploy and improve more and more.

“Most grocery retailers continue to merchandise their products in many of the same ways they have for decades,” Rich Scamehorn, chief research officer and co-founder of InContext Solutions, said. “While some changes have occurred with category management and logistics, I would submit they are only modest users of predictive analytics. Much of how they interact with consumers and show their merchandise to shoppers would change dramatically if they more fully embraced the use of predictive analytics.”

In fact, Scamehorn maintained, supermarkets “are just scratching the surface of their use of predictive analytics. The future will hold much broader applications of predictive analytics to improve the merchandising, the store layout, the inventory, e-commerce, mobile apps use, and many things that we can’t even dream of right now.

“It will change the shopping experience dramatically and with it unlock countless ways of building a tighter relationship with individual shoppers, creating unique experiences that spark loyalty,” he said.

And that, of course, is exactly what Edgewell is trying to do with its VR initiative.

                                                                        March 2016