VR Is Transforming Corporate Retail Decision-Making

VR Is Transforming Corporate Retail Decision-Making
July 25, 2017

Amid speculation, L'Oreal has found a highly practical and effective use case for the new technology


Virtual reality is often touted as the next frontier for computer interfaces, and while there’s been a flood of promising content and experiences to be had, VR has yet to prove itself in the domain of sales—an end game for brands hoping to adopt the technology into their respective marketing strategies. Thus far, VR has been used to build hype around products or services more so than directly selling those experiences within their native headsets. And while a surfeit of experiences promises immersion, engagement and a temporary escape from reality, the corporate world simply isn’t sure how to use the technology to build and deploy strategies for growth, organizational and technical infrastructure, and monetization.


“I’m not a big believer in virtual reality as it relates to retail,” Scott Friend, managing director at Bain Capital Ventures, tells Glossy. “Maybe it has a place in an industry like gaming, but having seen the best retail VR experience out there, I walked away from it thinking, ‘Why would I ever do this?’”

For the more practical minds out there, its true that there’s no immediate ROI in a transactional context—the bitter truth is that most people don’t have a readily accessible headset of their own, and even among those who do, there’s little to no infrastructure to deliver value for brands outside of the gaming industry. Still, this knowledge hasn’t deterred optimistic brands from diving headfirst into the experimental medium, including beauty giant L’Oreal, whose unique approach offers insight into the transformative effects three-dimensional technologies can have on decision-making, organizational efficiency and brand cohesion across siloed departments.


Located in the company’s 352,000 square-foot New York City headquarters, the ‘L’Oreal Beauty Lab’ is surprisingly easy to miss with flashier features like a full Essie nail salon or a terrace facing the Hudson River decorating its interiors. In stark contrast, the lab look likes an ordinary conference room, only with a screen that spans the entirety of one of its walls that projects the perspective a viewer sees within an accompanying VR headset. The subtlety of the room is entirely intentional; in fact, it wasn’t made to woo consumers at all – instead it was designed for internal teams looking to optimize the various processes in place to take new products from ideation and prototyping to launching and beyond.


With over 30 cosmetics, hair and skincare brands under its belt, L’Oreal claims a single product can take several months to properly strategize the branding, packaging, PR, merchandising and so forth. The traditional process requires the mini-brands that are part of the larger L’Oreal ecosystem to envision the full interaction from discovery to purchase to usage, which often requires them to build full-on prototypes of the designated shelf displays. With the Beauty Lab, the scope of the products’ respective timelines can shrink down to a matter of weeks, with the visualizations and 3D renderings shaving tremendous amounts of time and money off of physical construction and decision-making all the same.


Dermablend, a dermatologist-made brand of foundations and concealers was the first of the L’Oreal-owned companies to assess the impact that the virtual reality room would have on lean decision-making. With the intent of making ‘a strategic and aggressive leap forward’ in 2017, general manager Malena Higuera suggested that the conventional market research required for a full-scale rebrand and package redesign would have been far too time-consuming and money-draining to merit the effort.


“This type of thing takes very complicated, cumbersome and expensive live merchandise demonstrations, but I really wanted my team to be exposed to as much real, potential feedback as we could get” says Higuera. “We’re undergoing a renaissance of sorts, [so] every time we need to see something in real life, we [now] come here. Speed is important, but it’s about doing the right thing fast.”


Having brought in a focus group to test whether there was clarity in its messaging and an overall product market fit, Dermablend found that new customers were able to identify its core differentiator (dermatological benefits), and the brand was even able to realize a fuller scope of makeup shades as a result. The full rebranding process of its Ulta units took a total of three months – five less than the expected length had L’Oreal’s technology not been available.


As with any bleeding-edge technology, there is indeed a learning curve for using the system; but the rewards reaped from learning how to create content for and interface with VR largely outweighs the time spent having to pick it all up. As the beauty world grows increasingly competitive with each passing day, moving at a faster rate becomes essential for maintaining relevancy. As such, L’Oreal continues to integrate the visualization practices into its expanding line of indie products in an effort to ramp up commercialization. Coordinated by the Future of Retail team (who reserves the rights to the space and acts as a cross-divisional partner at the company), the facility plans on continuing its exploration of how three-dimensional technologies will revolutionize internal projects such as retailer presentations and consumer decision trees.


Since the massive success of Dermablend, L’Oreal has invited additional companies to take part in streamlining their various processes with the hopes of creating a silo-free, collaboration-encouraging environment for all.

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