Nestlé’s virtual shopping centres deliver real competitive advantage

Nestlé continues to gain competitive advantage in retailing with the official opening of a GBP 1 million (almost CHF 1.5 million) extension to its simulated shopping centre in the United Kingdom today.

The Insight and Learning Centre, located in York, is one of a worldwide series of centres established by the Company to provide retailers with the strategic insight to optimise their sales while growing Nestlé’s range of products in stores.

Combining leading consumer and shopper research with cutting edge digital technology, the centres are used to demonstrate how people behave when shopping and when using Nestlé products at home.

The York centre, which was originally built in 2008 for confectionery products, has now trebled in size to cover Nestlé UK’s entire product range including coffee, cereals, pet food and waters.

The new extension features an Imax cinema, replica living room and working kitchen, full size convenience store, and digital media area.

Paul Bulcke, Nestlé Chief Executive Officer, and Laurent Freixe, Nestlé Executive Vice President and Zone Director for Europe, attended the opening ceremony in York, along with Paul Grimwood, Chief Executive Officer of Nestlé UK.

Mr Grimwood explained why the centre sets Nestlé apart from its competitors.

He said: “We are the only company in the United Kingdom to offer our retail customers strategic insight in such a state-of-the art learning environment.

“In the centre’s first 18 months, we hosted 355 retail customer visits and generated more than GBP 20 million in incremental sales, which is why we have chosen to develop it further.

“The results from the initial visits we have hosted in the new extension have already covered its cost. For us, the return on investment is clear.”

Virtual reality technology

Set up since 2000, Nestlé’s other insight and learning centres are based in a variety of countries including the United States, France and Spain. More are under development in places such as China, Italy and Mexico.

In France, Nestlé has recently enhanced its Shopper Experience Centre at its regional headquarters in Noisiel, Paris, with virtual reality technology.

The centre - which features a number of different, customisable areas - allows Nestlé to host up to three individual retailers at a time to talk about different product categories.

Arnaud Marie, Corporate and Sales Development Manager for Nestlé France, described how it works.

He said: “The Shopper Experience Centre is an important tool, based on high-level market research, which allows us to successfully target specific product categories for growth.”

“As well as sharing strategic information on product categories, consumers and shoppers, we have the capacity to replicate the aisles, shelves and displays of a particular store, and to demonstrate areas for improvement.

“Using virtual reality technology, we can immediately redesign the store based on our recommendations to quickly and conveniently demonstrate how this can be altered.”

Mr Marie explained how centres like the one in Noisiel allow Nestlé to approach senior retail executives in addition to the usual sales negotiation process.

He said: “In France our market is very concentrated, and things tend to move quickly.

“With a facility of this quality, we can instantly elevate discussions to a higher level. It is easier to persuade top management to attend a presentation, and so important decisions can be made there and then.”
Bringing research to life

The Learning Center at Nestlé Purina PetCare Company’s St. Louis Headquarters in the United States was the first to be established in 2000. Due to retailer demand, the company opened a second centre in California in 2001.

With a full-scale reproduction of a typical American consumer’s house and garage, a replica retail store, a cinema-style presentation room, and two live-in cats called Rocki and Ava, the St. Louis centre provides a comprehensive ‘path to purchase’ learning environment.

Allowing Purina to deliver precise and targeted recommendations to its retail customers, it has become a benchmark for Nestlé’s other centres around the world.

Linda Hennen, Director of Nestlé Purina Learning Centers, described how the St. Louis centre is used to showcase the company’s best-in-class consumer, shopper and retail insights.

She said: “At the St. Louis centre we can offer a critical study of pet owners’ at-home behaviours, demonstrating exactly how and why these behaviours might lead them to purchase Nestlé Purina products in a retail environment.

“The recent addition of virtual reality technology has enabled us to more effectively demonstrate our shopper-centric recommendations in a flexible, retail-friendly environment. This is a true competitive advantage for Nestlé Purina.”

The Purina centres share their expertise not only with retailers in the United States, but also those from a number of other countries, Nestlé employees from around the business, and even groups of veterinarians.

A brand new Nestlé Purina Learning Center is now planned for construction, to extend this expertise to other parts of Nestlé’s business.

Ms Hennen concluded: “We are excited to be building a boundary-pushing new centre which will provide world-class shopper and retail focused business building tools for both our Nestlé colleagues and external retail customers"

Due to open in June 2012, the new Learning Center will be the first construction on the St. Louis campus in more than 25 years.