“Unseen Is Unsold:” VR & Analytics Study What and Why Shoppers Buy

Humans are great about saying a lot of things. We’re not that good about actually following through. See: New Year’s diet resolutions or election polls.

That tendency affects retailers as well. Big stores and brands spend millions in market research to figure out what shoppers want and then model production and creative teams to create those items.

“What people say and what people do is different,” says Anne Stephenson, a partner with Explorer Research, which works with retailers and brands. “So, we immerse people in these environments and measure their behaviors.”

Last month, the Toronto-based research marketing firm launched its Behavioral Science lab, which uses technologies such as virtual reality, eye-tracking, and facial coding to study and measure shopper behavior. The 7,500 square-foot lab can be formatted to resemble grocery, department, drug, and other stores, Stephenson says.

Explorer Research, which was founded in 2006, typically works with clients in the consumer goods, retail, technology, food service, consumer electronics and appliances, financial, automotive, and media industries.

I recently spoke with Stephenson about the Behavioral lab, which is based in Chicago, and how retailers are turning to technology to better understand their customers. Here is a lightly edited transcript of our conversation:

Xconomy: Tell me about Explorer Research. How did you come to found it? What are its goals?

Anne Stephenson: We are a research company. Clients hire us to answer a question that they would have. What we do that’s different is that we’re really focused on the behavioral aspect. That’s why we have an actual lab facility set up to test behavior. That’s different than traditional market research where you ask people a series of questions and then they would rate it on a five-point scale. What people say and what people do is different. We know that; we all say we’re going to go on that diet and it never kind of happens. We immerse people in these environments and measure their behaviors. We arrange different tools to help better understand of some of their subconscious, use a lot of eye-tracking and facial-coding, to measure the more emotional or subconscious aspect.

Really, most of our behaviors are driven by that part of our brain—versus thinking and analyzing. For most products, it’s these emotions that influences you to make a purchase.

X: What sorts of environments do you create for your customers?

AS: We either physically set up an aisle or a section where we’re testing influences of signage or a new way to set up a shelf, planogramming, new packaging. We do life-size virtual reality with eye-tracking. A person puts on a headset and they’re fully immersed; they are not looking at a computer screen. They pick products up off the shelf, look at them, place them in a basket. The headsets capture eye-tracking while they’re doing this: where they are looking, how they are behaving. There is a green screen set up, and we see on our monitor what they’re doing and precisely what they’re looking at.

Eye-tracking is one of the most powerful tools you can use in terms of understanding [buyer behavior]. Unseen is unsold. It gives us a sense, is your product being noticed on shelves? Eye movement … is a sign of engagement. We can analyze shelf setup. Is your product being seen as much as you would expect given how much shelf space the product is taking up. Are they noticing you, but then not converting that into a sale?

Are you performing as well as you would expect to? That has implications in terms of how you set up a shelf.

X: What are your retail customers looking for help for?

AS: With all the change taking place in retail, a lot of retailers are trying to optimize the experience in their stores. They’re looking to test ideas in the reinvention of the store of the future. Before they roll [possible ideas] out, they have the ability to build and do a test location, and then do iterative-type testing.

They want to see how they can create unique online and in-store experiences. [Grocery] is looking at offering more prepared meals and pre-ordering. What is the reason to go to the grocery store, to go to physical location? What do they do to make that engaging? Is it around grab-and-go or experiences like cooking classes?

Most convenience stores [are focused on helping customers] get more in that convenience trip: healthy, easy snacking, health and wellness is a general theme. How does that manifest itself? Does that mean a yoga studio is attached? How do they use their real estate differently?

The idea is to bring interest and a reason to do more frequent trips. So you always know something new is going to be there.

X: What are the technologies retail needs to be most focused on?

AS: Beacons, augmented reality/virtual reality, RFID, data analytics, robotics and inventory tracking. Walmart (NYSE: WMT) is doing that now. [Editor’s note: We’ll be exploring this topic in an upcoming Xconomy story.] There is need for technology around customer service, autonomous driving stores.

X: Who is doing this well?

AS: Amazon (NASDAQ: AMZN) buying Whole Foods is the biggest example. People are saying retail is dead. But not necessarily. Bigger e-commerce companies are buying up great retailers. How do we integrate that? There is retailing in different locations like Warby Parker in Grand Central [Terminal in New York]. The idea is creating brand engagement.

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