Thursday, 7 June 2012

What makes shoppers tick?

What makes shoppers tick?

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Section: eye on the customer
Cutting-edge technology and virtual reality aid observational studies of buying preferences and influences
This first installment of a two-part series, "Eye on the Customer," explores the latest technologies for in-store observation and the science behind emerging customer tracking strategies. Look for part two in the April issue, which will delve into the growing field of neuromarketing and the science of measuring brainwaves to detect a customer's response to in-store advertising and environments.
How many customers walked down an aisle? What products did they look at? What did they buy? How much time did they spend? Questions like these are becoming increasingly easier for retailers to answer in today's technologically driven world. With the help of innovative, cutting-edge technology systems, companies can delve deeper into the world of in-store metrics and yield more accurate, detailed results. More retailers are taking part in this in-store observation, watching customers while they shop in hopes of determining what works — and what doesn't. Infrared sensors, behavior-capturing video cameras, facial coding analysis and virtual reality simulations are just some of the many technologies retailers are experimenting with today.
Virtual retail-ality
However useful the results of customer observation may be, it is often costly and time consuming to implement changes in-store — and that's where Irving, Texas-based Kimberly-Clark Corp's new Innovative Design Studio comes in. Located in Neenah, Wis., the facility helps retailers explore store design, merchandising and product concepts based on consumer insights without ever having to change a thing in-store — thanks to the use of a virtual reality system.
The core of the Innovation Design Studio features a state-of-the-art visualization room with advanced virtual reality technologies and equipment, including a high-tech kiosk called the K-C Smartstation that simulates a customer's shopping experience. Together, these help Kimberly-Clark research new product innovations and store concepts from idea through concept testing to actual execution. The center's four key areas of capabilities focus on design, research, analyzing and tracking shopper behavior. "When you think about the design and research piece, how do we uncover and get to the root of consumer thinking, and what they're reacting to in-store, and how that impacts their purchase decision?" explains Mark Rhodes, senior insights team leader for Kimberly-Clark. "This whole studio is about getting at those types of ideas."
Through using the virtual reality system and the K-C SmartStation, the company can create real store settings, down to retailer-specific color palettes, graphics and layouts. These 3-D, interactive store models allow retailers to explore and test hypothetical in-store design and merchandising concepts prior to launching them. For example, grocery store chain Safeway used the K-C SmartStation to test a new format for its baby care aisle. Additionally, the K-C SmartStation allows consumers to walk the aisles of the virtual stores, shop the store via a touchscreen panel and react to virtual displays and instore promotions. Eye-tracking technology also analyzes consumers' engagement and reaction to different shopping environments. "It's really about taking ideas full circle from concept all the way to reality — and doing that faster," Rhodes adds. "If you think about how we've traditionally done that, if we can take time out of that innovation pipeline and bring an improved product to the marketplace in a faster means, that's a big win."
Tapping into the senses
Minneapolis-based Sensory Logic Inc. applies methods of eye tracking, facial coding and verbal analysis to tap into every step of the decision-making process at the store. A scientific insights company, Sensory Logic specializes in helping its clients create a stronger sensory-emotional connection with their target customers in order to boost sales and productivity. The firm combines facial coding with eye-tracking technology from Tobii to gather information on customer behavior — analyzing video of a customer down to 1/30th of a second.
Tobii's eye-tracking technology utilizes advanced image processing of a person's face, eyes and reflections in the eyes of near-infrared reference lights to estimate the 3-D position in space of each eye and the precise target to which each eye gaze is directed toward. The results from eye tracking combined with facial coding indicate the precise nature of gaze activity (where people look) and emotional response to a stimulus (how people feel about what they see) and, given adequate sample size, even to specific elements of the stimulus. "We like (facial coding and eye tracking) in combination, because we're looking at some very granular data that way," explains Dan Hill, president of Sensory Logic, which has worked with such retailers as Petsmart and BP's Wild Bean Café. "They are a very powerful one-two punch."
To gather the required data, Sensory Logic works primarily with videotape, although in some cases experts versed in facial coding may do on-site observation. Many small, discrete cameras are located throughout the store to capture not only what the customers are looking at, but also how they are responding. "You almost have to create a force field of cameras," Hill says. Once information is gathered, the firm can begin to break it down. "Eye tracking is great, but are you looking at [a product] because you're fascinated, you're repulsed, you're puzzled? Which is it?" Hill asks. "As you move past the first initial impression and capturing responses, then the facial coding can allow you to quantify emotionally just how excited or displeased or disinterred customers might be by different aspects of the store experience." It is deciphering this emotional reaction that can help retailers better align their stores with their customers' needs.
Facial expression analysis is also being experimented with at the Restaurant of the Future (ROF) in the Dutch town of Wageningen in the Netherlands. Part company restaurant, part sensory consumer research lab, the ROF is a cooperation between scientists of Wageningen University, catering company Sodexo, professional kitchen supplier Kampri Group and software developer Noldus, which tracks diners with cameras and monitors their eating habits. ROF is open to the general public, but requires visitors to register and sign consent forms agreeing to being watched by the team of 22 scientists who manually record their actions into a database.
At the ROF, scientists can observe diners in conditioned situations over a prolonged period of time, researching various elements, including behavior, food choice, design and layout, the influence of lighting, presentation, traffic flow, taste, packaging, preparation and other aspects of dining out. Hidden cameras and sensors observe diners, and face-reading software is being developed to automatically analyze expressions. Chairs in the restaurant can monitor a customer's heart rate, while scales built into the floor can weigh unsuspecting diners as they purchase meals.
"We want to find out what influences people: colors, taste, personnel," Rene Koster, director of the research team and head of the Center for Innovative Consumer Studies at Wageningen, told Reuters. "The restaurant is a playground of possibilities. The changes must be small. If you were making changes every day it would be too disruptive."
Observational technologies
Cameras play an integral role in advanced customer-monitoring technologies. Brickstream uses dual-lens cameras to monitor store traffic for retailers such as Office Depot, Toys "R" Us and Walgreens. Best Buy uses Brickstream's BehaviorlQ camera system to collect information on shopper behavior patterns, and the data can also be compared to sales numbers to determine the effectiveness of various elements of the store design.
But cameras aren't the only way to observe customers. On a basic level, grocery store chains such as Schenectady, N.Y.-based Price Chopper and U.K-based Tesco are testing Irisys' SmartLane, which uses infrared sensors to track people/groups to better manage check-out lines and waiting time. Abercrombie & Fitch and U.K.-based Marks & Spencer also use infrared sensors.
Another infrared sensor technology monitoring instore traffic is being used by the Pioneering Research for an In-Store Metric (P.R.I.S.M.) project, under the direction of New York-based The Nielsen Co. (parent company of DDI). P.R.I.S.M. has also moved beyond traffic counts by incorporating store communication audits to derive estimates for consumer reach. (For more P.R.I.S.M. coverage, see DDI's Feb. issue, page 36).
Paco Underbill, CEO of New York-based Envirosell Inc., is a pioneer in the field of customer observation. Combining traditional market research techniques, anthropological observation methodologies and videotaping, Envirosell builds profiles of what happens in-store. In video shop-alongs, Envirosell runs through a shopping trip with recruits using a small camera, talking to them about what they see. However, for the most part the company physically follows shoppers in secret, observing their behavior and marking it down on tracking forms.
They may also intercept customers as they are leaving a particular section or leaving the store and ask them questions about their shopping trip. Questions might be about education, income, career or about frequency of shopping — issues that can't be established just by observation, Underbill explains "Based on interviews with a person, our observations, their comments and often one-on-one interviews with staff that work on the floor of the store, we build our profile of what happens," Underhill says.
The analysis process begins by taking all of the data and looking at it — both from the context of having been in the store, and then from the context of Envirosell's databases. "When we isolate a problem or an issue, some of it is saying, 'is this something that can be solved by physical changes in the design? Is this the problem of the information system, or is it a problem of the operating culture?'" Underhill suggests.
With all of these emerging technologies aiming to stake a place in the landscape of in-store metrics, should retailers anticipate a backlash? Is there such a thing as too much technology? Underhill believes the retail industry's adoption of technology metrics has added to the stream of data without adding to the ability to process it. "Retail does not need more data. Retail needs better processing of its existing data," he notes. Whether there is such thing as too much technology, it seems that it will only continue to speed ahead, and retailers wanting a share in the competitive market should all be on board.
To e-mail this article, visit www.ddimagazine.com/magazine.
PHOTO (COLOR): Kimberly-Clark's Innovative Design Studio features virtual reality technology.
PHOTO (COLOR): Sensory Logic Inc. combines sensory inputs to gather customer info.
PHOTO (COLOR): Scientists at the Restaurant of the Future observe diners with hidden cameras.
PHOTO (COLOR): The K-C Smartstation simulates a customer's shopping experience.
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By Jessie Bove, Associate Editor

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