Generative AI in the Innovation Process: How the “Virtual User LAB” Is transforming and improving product innovation

The integration of generative artificial intelligence into the product innovation process opens up new opportunities for companies to develop products faster, with greater insight, and with a stronger focus on user needs. This is precisely where the “Virtual User LAB” comes in—an interactive tool developed by the interdisciplinary design studio code2design and its founder Michael Schmidt in collaboration with Fraunhofer IAO, Stuttgart.

The “Virtual User LAB” uses generative AI to create intelligent personas, develop them further, and integrate them into dynamic application scenarios. In a chat-based interface, large language models like ChatGPT take on the role of these personas. This makes it possible to interact with virtual user profiles (AI assistants) in real time—for example, in virtual focus groups, when evaluating product ideas, or for real-time validation of concepts in workshops.

AI as a Catalyst in the Product Innovation Process

code2design supports companies in designing and conducting innovation workshops for product design and development. The goal of these workshops is to systematically analyze existing product portfolios, target groups, and relevant industry and market trends in order to derive new product ideas and viable concepts.

The use of generative AI in our “Innovation Workshops” significantly expands this process and creates new qualities in innovation work:

• Refining user needs: Personas are described in much greater detail and with more realism based on target group characteristics, behavioral patterns, and preferences.

• Generating and expanding personas: The AI creates realistic target group representatives with specific traits, mindsets, and requirements—so-called AI agents.

• Clustering innovation ideas: Ideas from the workshop can be structured more quickly, grouped thematically, and assigned to relevant categories.

• Analyzing success factors: Product ideas can be evaluated from the perspective of virtual personas to better assess potential, acceptance, and risks at an early stage.

Greater Efficiency and Higher Quality in Innovation Workshops

Integrating AI into innovation workshops not only brings methodological advantages but also improves the entire workflow—from preparation through execution to follow-up.

Key benefits include:

• Improved customer understanding: User requirements are considered more broadly, with greater differentiation and a stronger foundation.

• Time savings: The development, consolidation, and evaluation of ideas happens significantly faster.

• Better documentation and analysis: Workshop results can be summarized more efficiently and described more precisely.

• Structured innovation process: Teams receive reliable decision-making foundations for further concept development more quickly.

The „Virtuelle User LAB“ represents a forward-looking step in connecting generative AI with innovation work. It strengthens companies’ ability to develop market-relevant, user-centered products more efficiently and to think strategically about innovation processes.

© pic: Fraunhofer IAO

Additional Applications for Generative AI and Virtual Personas

Beyond supporting innovation workshops, the “Virtual User LAB” also offers significant potential in other business areas.

Public Relations

Generative AI can help target different audience groups more precisely and align communication measures more closely with their expectations. It also enables the simulation of potential reactions and communication approaches for crisis management.

Marketing

In marketing, AI supports the personalization of campaigns and the development of content tailored to specific target groups. Messages, formats, and strategies can be more precisely aligned with different user segments.

Sales

In sales, the tool enables stronger pitch personalization. Teams can test and refine sales arguments with virtual personas and tailor them to specific target groups.

Product and Software Development

In product and software development, virtual personas foster a deeper understanding of user needs, application challenges, and expectations. They support both idea development and the evaluation and refinement of solution approaches..

Conclusion: Generative AI as an Innovation Driver

The “Virtual User LAB” demonstrates how generative AI can be meaningfully integrated into the product innovation process.

For code2design, the “Virtual User LAB” is a consistent step toward modern, data-driven, and user-centered innovation work. It combines methodological design expertise with the potential of generative AI—creating new perspectives for market-relevant, innovative products.

Through collaboration with code2design, companies gain a powerful tool to align innovation workshops, product development, and product design more closely with real user needs, accelerate processes, and create better decision-making foundations.