May 22, 2008
CPGmatters: Kimberly-Clark Scores with Virtual Retail Settings
By Al Heller
Through a special arrangement, what follows is an excerpt of a current article from the monthly e-zine, CPGmatters, presented here for discussion.
By using virtual reality technology to create compelling retail environments that sell more of their diapers and tissues, Kimberly-Clark is elevating the art of actionable insights.
Virtual depictions of stores, shelves, products and displays—even sounds and smells people encounter while shopping—enhance traditional means of research and enable the CPG manufacturer to “garner deeper insights into factors that impact a shopper’s decision to make a purchase. It often does this faster, better and more cost-effectively,” said Mark Rhodes, the virtual reality team leader at Kimberly-Clark.
With virtual reality, K-C and its strategic retail partners have a stealth, risk-averse way to test new products, packages, display positions, assortments and point-of-purchase materials without taxing muscles or bearing the cost of physical goods movement. Depictions of retail interiors on the full wall-size screen at its facility in Greenville, Wis. (opened in May 2007), are realistic and reflective of real world shopping, he stated.
The facility has provided distinct virtual reality-driven insights, he said, among them the ability to:
- Gauge shopper engagement with in-store point-of-purchase materials, to help retailers determine where to most effectively channel spend and merchandising efforts. The system tracks eye movement and head turns, and discovers which specific element attracts the shopper—color, price or something else.
- Gain insights into consumers’ wants, needs and shopping habits by exposing them to the high-tech kiosk called the K-C SmartStation. The kiosk, which simulates a person’s shopping experience, sits inside a state-of-the-art visualization room at the Greenville studio.
Mr. Rhodes believes that K-C is “one of only a few companies in the world to have an innovation design studio with an integrated virtual reality system…By engaging ourselves and our customers in this virtual world, we can spark better ideas to improve the shopping experience and collaborate on new product concepts and innovations.”
K-C accrues further benefits from the studio and its virtual reality technologies, some of which Mr. Rhodes described as:
- Product development and design teams can collaborate at the facility to explore global residential and commercial environments and lifestyle needs, and develop product solutions tailored to local needs around the world, without leaving its home state.
- K-C can develop and test next-generation retail environments with customers and third-parties such as store designers, without the extensive costs or time associated with building actual in-store environments.
- K-C and customers can visualize changes at shelf that previously could only be examined through data analysis. This makes merchandising and planning processes easier and more intuitive.
They add to the company’s product, marketing research and customer development toolkits, and advance capabilities that touch customers, shoppers and users.
It is Mr. Rhodes’ belief that “in-store communication has become more and more important” to reach shoppers when they’re making purchase decisions. “Our tools help us determine the most effective in-store vehicles, and then build customer-specific shopper marketing programs designed to increase foot traffic and build loyalty and sales for K-C and our retail partners,” he said.
Discussion Questions: What do you think of Kimberly-Clark’s Innovation Design Studio? What do you think the pros and cons are of using virtual reality technologies to gauge the shopping experience? What else would you like to know about the use of virtual retail technologies to understand the shopping experience?
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Discussion Questions
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Learning how consumers react to different elements of the environment, packages, and information would reveal insights about how to effectively develop POP experiences. To make a transfer from information learned in the test environment to the actual store, the shopping experience needs to be as realistic as possible. This new technology sounds promising. However, will the consumers in and around Greenville, WI, be representative of all types of consumers?
Read the original article–the claims that K-C makes regarding sales increases through research are absurd–they’re talking 25% to 75% sales increases. K-C spent millions to have their own system and look slick. How they ever could think that will be paid back is beyond me. Much less expensive technology is readily available. Betting big bucks on consumer reactions drawn from a population near Appleton, Wisconsin (certainly the hotbed of VR users)is risky at best, dangerous more likely.
Interesting to see this being developed by a manufacturer; I guess the first thing that springs to mind is that this is another way of trying to improve relationships between supplier and retailer, and appears to also be a good, constructive medium in which to do so.
This is a still a newish methodology (although has been around for a decade or more but is not mainstream) and if successful at what it intends to achieve, then it won’t be long before we see some case studies of why it is a good technology to use–etc, etc….
The pros of this type of research are obvious and my concerns over this are also obvious about what Kimberly-Clark intends to use it for–assuming that it would be more successful in-store.
There are a couple points to raise: assessing behaviour/reaction alone is not enough to drive a successful shopper marketing programme and secondly, as always, this will not mean more successful in-store implementation.
Identifying what success looks like is one thing but it generally has very little to do with what will actually happen in-store. Should equal investment go into implementation, or does Kimberly-Clark already know enough to go straight into investing more heavily in implementation and taking an iterative approach to improve sales?
Hope this provokes some thoughts/comments….
It is a great system, if you have no other way to connect with the customer. And if you don’t have contact with the customer and can’t talk to them directly, that is too bad. You will learn so much more than any high tech system of monitoring, spying and tracking customer behavior ever will tell you. I firmly believe in one-on-one with the shopper.
Kimberly-Clark’s virtual reality studio started a year ago. Since then, the stock went from $71 to $64. So it seems unlikely that the virtual reality studio’s impact has been major, so far. It doesn’t help the cause of any new technology to exaggerate its expected impact. Many retail executives are quite cynical about new technology announcements because of frequent gross exaggeration.
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Learning how consumers react to different elements of the environment, packages, and information would reveal insights about how to effectively develop POP experiences. To make a transfer from information learned in the test environment to the actual store, the shopping experience needs to be as realistic as possible. This new technology sounds promising. However, will the consumers in and around Greenville, WI, be representative of all types of consumers?
Read the original article–the claims that K-C makes regarding sales increases through research are absurd–they’re talking 25% to 75% sales increases. K-C spent millions to have their own system and look slick. How they ever could think that will be paid back is beyond me. Much less expensive technology is readily available. Betting big bucks on consumer reactions drawn from a population near Appleton, Wisconsin (certainly the hotbed of VR users)is risky at best, dangerous more likely.
Interesting to see this being developed by a manufacturer; I guess the first thing that springs to mind is that this is another way of trying to improve relationships between supplier and retailer, and appears to also be a good, constructive medium in which to do so.
This is a still a newish methodology (although has been around for a decade or more but is not mainstream) and if successful at what it intends to achieve, then it won’t be long before we see some case studies of why it is a good technology to use–etc, etc….
The pros of this type of research are obvious and my concerns over this are also obvious about what Kimberly-Clark intends to use it for–assuming that it would be more successful in-store.
There are a couple points to raise: assessing behaviour/reaction alone is not enough to drive a successful shopper marketing programme and secondly, as always, this will not mean more successful in-store implementation.
Identifying what success looks like is one thing but it generally has very little to do with what will actually happen in-store. Should equal investment go into implementation, or does Kimberly-Clark already know enough to go straight into investing more heavily in implementation and taking an iterative approach to improve sales?
Hope this provokes some thoughts/comments….
It is a great system, if you have no other way to connect with the customer. And if you don’t have contact with the customer and can’t talk to them directly, that is too bad. You will learn so much more than any high tech system of monitoring, spying and tracking customer behavior ever will tell you. I firmly believe in one-on-one with the shopper.
Kimberly-Clark’s virtual reality studio started a year ago. Since then, the stock went from $71 to $64. So it seems unlikely that the virtual reality studio’s impact has been major, so far. It doesn’t help the cause of any new technology to exaggerate its expected impact. Many retail executives are quite cynical about new technology announcements because of frequent gross exaggeration.