The Use of Virtual Store Simulations in Marketing Research and Beyond

In September last year the In-Store Marketing Institute invited us to participate in a white paper examining the use of Virtual Store simulations in marketing research. We enthusiastically grabbed the chance to ‘de-cloak’ the mysteries surrounding the technology and make it more accessible to a wider audience. I think Peter Brean, the author, did a brilliant job. He bravely tackled a very complex subject, succeeded in making it much easier to understand, and managed to describe the benefits as clearly as I’ve ever seen them put. Here is his summary:-

Executive Summary

• The use of computer-driven store simulation technologies to conduct market research and achieve other key business objectives is fast becoming a common practice among consumer product manufacturers and retailers.
• If conducted properly, virtual store tests can deliver a more accurate representation of at-shelf product selection and other shopping behaviors than traditional methods of consumer research and a faster, more cost-efficient alternative to instore field tests.
• While startup costs can be significant, the use of virtual store simulations offers a wide variety of business benefits that practitioners say more than justify the initial expense. The strategy goes well beyond “pure research” to encompass effective internal planning and collaboration and the fostering of stronger relationships with key retail accounts.
• Judged in the context of shopper marketing, virtual store simulations can be an indispensable tool for understanding in-store behavior and designing stores and merchandising programs that truly meet the needs of consumers.

Peter’s Introduction then goes on to set the stage;

‘ ….. On Oct. 3, 2007, the front page of The Wall Street Journal featured an article entitled, “A Virtual View of the Store,” which detailed Kimberly-Clark’s use of three-dimensional store simulation technology as a marketing research and business development tool.

The high-profile coverage inspired a classic “overnight success” story, introducing to many marketing professionals a technology that, in fact, had been available for nearly two decades: Procter & Gamble, Intel Corp., ConAgra Foods, Frito-Lay, Goodyear Tire & Rubber and a number of other companies had been experimenting with various methods of computer simulation since at least the early 1990s……

… Professor Raymond Burke, E.W. Kelley professor of business administration at Indiana University’s Kelley School of Business, began working with virtual environments in the late 1980s while at the University of Pennsylvania’s Wharton School. (Today, virtual simulation technologies are an integral part of the Customer Interface Laboratory that Burke operates on IU’s Bloomington campus.).

In a 1996 article published by the Harvard Business Review, Burke concluded that “three dimensional computer graphics” not only “have made simulated test-marketing practical for a broad range of companies” but also would ultimately “change the ways companies innovate and how they approach a variety of strategic issues.”

It may have taken another 12 years, but Burke’s forecast appears to have finally materialized. Although only 3.7% of respondents to a recent Shopper Marketing magazine survey said that they use virtual testing to generate insights for in-store marketing, an obvious rise in activity in 2008 makes it safe to predict that virtual-store testing will soon become a standard component of both marketing research and retail planning……

Nicely tee’d up Peter. Of course, in a brief outline, with all the limitations of space imposed on such a paper, the main compromise Peter had to make was where to draw the line on detail. I’d like to add some of what, we felt, were important details that didn’t reach the final document.

The Birth of Virtual Reality

This is not intended to be a comprehensive history, but it’s worth reviewing the outlines. The concept of Virtual Reality (VR) seems to appear for the first time in the 1950s. Morton Heilig is cited as the Father of Virtual Reality having invented The Sensorama Machine in 1957 (patented in 1960).

The Sensorama was a semi-immersive, mechanical simulator, shaped like a 1980s arcade game, which provided the ‘experience’ of riding a motorcycle through the streets of Brooklyn using a 3D motion picture, stereo sound, vibrations felt through the motorcycle seat, wind in the viewer’s hair to reinforce the sensation of speed as well as the smells of the city! Amazing technology for it’s time.

Perhaps next in the timeline is Ivan Sutherland.

He was the inventor of the first computer graphics system called SketchPad (please see related CAD history articles on this blog) who, with the aid of his student Bob Sproull, later developed at Harvard what is thought to be the first Virtual Reality head mounted display system.

Somewhat cumbersome and unwieldy, it was rather unfortunately nicknamed ‘The Sword of Damocles’ owing to the fact that it was extremely heavy and had to be suspended from the ceiling so as not to break the neck of the unfortunate wearer!

Here is a series of prophetic quotes from his 1965 paper ‘The Ultimate Display’:-

….. If the task of the display is to serve as a looking-glass into the mathematical wonderland constructed in computer memory, it should serve as many senses as possible.

….. By working with such displays of mathematical phenomena we can learn to know them as well as we know our own natural world. Such knowledge is the major promise
of computer displays.

….. The ultimate display would, of course, be a room within which the computer can control the existence of matter. A chair displayed in such a room would be good enough to sit in. Handcuffs displayed in such a room would be confining, and a bullet displayed in such a room would be fatal. With appropriate programming such a display could literally be the Wonderland into which Alice walked.

Priceless, and spot on! Sutherland’s head-mounted display showcased virtual rooms displayed in wireframe form where the view was dependent on the position of the viewer’s gaze, quite an innovation.

Laboratory Experiments in Computer based Shopping Simulations

Peter also refers, in his introduction, to Professor Raymond Burke’s remarkable work in the early eighties. Looking at his prolific publishing record it’s clear that he’s been a thought leader in the application of Virtual Reality to market research from the beginning.

One of his early papers ‘Comparing Dynamic Consumer Choice in Real and Computer Simulated Environments - 1992′ caught my eye. Even though he makes reference to many laboratory based studies conducted in the seventies and eighties, this paper is surely one of the first, if not the first, to validate the approach and show the way forward. I review this paper in detail elsewhere on this blog. It makes fascinating reading.

His team used two laboratory setups, one very crude and the other designed to mimic an actual shopping experience as closely as was possible at that time. In their ‘Realistic Lab’, the computer displayed photographic images of the front faces of products arranged on the shelf as in a store - a crude planogram of sorts. Some categories required multiple screens to show all the products and so the respondents were ‘walked’ between screens using a trackball interface. The ‘purchasing’ of products was simulated by the respondent ‘zooming in’ on a selected item and incrementing a counter to confirm the purchase. The respondents were ’shopping’ for some 30 minutes each. Only ten respondents participated in this part of the study. A parallel study was conducted in a real local store and the data used as a comparative benchmark against the computer simulated shopping tests.

The graph on the left clearly shows a very close correlation between what the participants ’shopped’ during the simulated shopping versus the actual store shopping. The results from these tests is discussed elsewhere on this site but suffice it to say that, with some interesting caveats, the research team felt able to conclude:-

‘…. However, in the realistic laboratory, there was no significant difference between the simulated and actual environment‘ …. and finally ….
‘…. Within appropriate limits, these computer environments will allow us to study research issues that previously could not be explored.’

Even though it was a small sample and conducted under laboratory conditions, these tests signposted what was to come - the use of photorealistic computer simulated environments to investigate consumers’ responses to innovative shopping concepts.

In his 1996 paper ‘Virtual Shopping - Breakthrough in Marketing Research’ Burke revisits this earlier work and also describes a further study confirming the close correlation between respondents shopping in a real store environment and those in a computer simulated one:-

Chart showing the high correlation between actual in-store shopping and a virtual store test

Computer Simulated Shopping leaves the Laboratory

Peter’s Introduction makes reference to several manufacturers adopting computer simulation in early studies, among which are Procter and Gamble. However, he leaves out one important participant, namely PepsiCo. Bill Bean, in his paper ‘Advances in Category Management Research’ describes some of PepsiCo’s early collaborative work. Fifth Dimension’s development of our Virtual Store implementations for them is mentioned. Our Virtual Convenience Store, Virtual Grocery Store and Virtual Drive-In are described in more detail in an article titled ‘The Pepsi Challenge - Could They Use Virtual Stores to Predict Shopper Behavior?‘

Procter and Gamble’s Virtual Store collaborations actually predate PepsiCo’s by at least a year. Fifth Dimension had been commissioned by P and G to develop two virtual environments in 1999 - a Virtual Mall and an innovative, themed store called Spa Lore. These projects are described in more detail in an article titled ‘Pioneering Virtual Stores with Procter and Gamble‘.

These project triggered Fifth Dimension’s commercial development of our ‘Discovery’ virtual research tools and methodologies. But that’s another story!

Useful Links

Some Links for those interested in Morton Heilig:-
http://www.mortonheilig.com/
http://www.mortonheilig.com/InventorVR.html

Ivan Sutherland’s 1965 Paper:-
The Ultimate Display

For In-Store Marketing Institute members, the article can be found at:-
http://www.instoremarketer.org/article/46615

For those interested parties who are not members, here is the PDF of the article:-
Shaping Retail: The Use of Virtual Store Simulations in Marketing Research and Beyond

Tagged as: Consumer Behavior, Consumer Insights, Consumer Research, Market Research, Retail Insights, Shopper Insights, Virtual Shopping, Virtual Store, Virtual Stores