Kimberly-Clark’sInnovative Design

Studio features virtualreality technology.

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 brain-

waves 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, compa-

nies 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 cus-

tomers while they shop in hopes of determining what

works—and what doesn’t. Infrared sensors, behavior-

capturing video cameras, facial coding analysis and vir-

tual reality simulations are just some of the many

technologies retailers are experimenting with today.

Virtual retail-alityHowever useful the results of customer observation

may be, it is often costly and time consuming to imple-

ment 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 virtu-

al reality technologies and equipment, including a

high-tech kiosk called the K-C SmartStation that simu-

lates a customer’s shopping experience. Together,

these help Kimberly-Clark research new product inno-

vations 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 pur-

chase 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 set-

tings, 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 in-

store promotions. Eye-tracking technology also analyzes

consumers’ engagement and reaction to different shop-

ping environments. “It’s really about taking ideas full cir-

cle from concept all the way to reality—and doing that

faster,” Rhodes adds. “If you think about how we’ve tra-

ditionally done that, if we can take time out of that inno-

vation pipeline and bring an improved product to the

marketplace in a faster means, that’s a big win.”

Tapping into the sensesMinneapolis-based Sensory Logic Inc. applies meth-

ods 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 sen-

sory-emotional connection with their target customers

in order to boost sales and productivity. The firm com-

bines facial coding with eye-tracking technology from

Tobii to gather information on customer behavior—ana-

lyzing video of a customer down to 1/30th of a second.

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Sensory Logic Inc.combines sensory inputsto gather customer info.

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M a r c h 2 0 0 8

What makes shoppers tick?What makes shoppers tick?Cutting-edge technology and virtual reality aid observationalstudies of buying preferences and influencesBy Jessie Bove, Associate Editor

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Tobii’s eye-tracking technology utilizes advanced

image processing of a person’s face, eyes and reflec-

tions in the eyes of near-infrared reference lights to esti-

mate 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 stim-

ulus (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 gran-

ular data that way,” explains Dan Hill, president of Sen-

sory 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 pri-

marily 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 track-

ing 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 cod-

ing can allow you to quantify emotionally just how excit-

ed or displeased or disinterred customers might be by

different aspects of the store experience.” It is decipher-

ing 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 Uni-

versity, catering company Sodexo, professional kitchen

supplier Kampri Group and software developer Noldus,

which tracks diners with cameras and monitors their eat-

ing 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 condi-

tioned 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 unsus-

pecting 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 technologiesCameras 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 BehaviorIQ camera system to collect infor-

mation 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 Schenec-

tady, 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 in-

store traffic is being used by the Pioneering Research for

an In-Store Metric (P.R.I.S.M.) project, under the direc-

tion of New York-based The Nielsen Co. (parent compa-

ny 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 Underhill, CEO of New York-based Envirosell Inc.,

is a pioneer in the field of customer observation. Com-

bining traditional market research techniques, anthropo-

logical 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 com-

pany physically follows shoppers in secret, observing

their behavior and marking it down on tracking forms.

They may also intercept customers as they are leav-

ing a particular section or leaving the store and ask

them questions about their shopping trip. Questions

might be about education, income, career or about fre-

quency of shopping—issues that can’t be established

just by observation, Underhill explains. “Based on inter-

views 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 hap-

pens,” 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 abil-

ity 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.

Above: Scientists at theRestaurant of the Future

observe diners withhidden cameras.

Right: The K-CSmartStation simulates a

customer’s shoppingexperience.

eye on

thecustomer

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Inside the mindInside the mindNeuromarketers use brainwave science to see how emotional,sensory and neurological cues are affecting consumers in-storeBy Alison Embrey Medina, Senior Editor

This second and final installment of a two-part series, “Eye on

the Customer,” explores the growing field of neuromarketing and

the science of measuring brainwaves to detect a customer’s

response to brands, in-store stimuli and environments. For a

downloadable PDF of the entire two-part series, please visit

www.ddimagazine.com/specialreports.

Companies wanting to know more about what’s going

through consumers’ minds as they shop their stores

needn’t rely solely on video cameras, satisfaction sur-

veys and focus groups any longer. Now they can actual-

ly open up that consumer’s brain and see what’s going

on inside (figuratively speaking, that is). Neuromarket-

ing, the science of studying consumers’ brainwaves to

see how they respond to advertising and brand mes-

sages in the commercial field, is for the first time pro-

viding concrete evidence of what works and doesn’t

work in the retail environment.

Learning more about the mental processes behind

purchasing decisions has grown exponentially over the

last several years, due largely to the advances in brain-

imaging technology. This technology is being used to

track the way consumers respond to everything from

brands and products, to movie trailers, Web advertising

and even political campaigns. The two most commonly

used brain-imaging technologies—functional Magnetic

Resonance Imaging (fMRI) and electroencephalography

(EEG) mapping—have made headway in recent years in

finally allowing research in the commercial market to

deliver hard data on what is happening when con-

sumers receive messages in the store setting.

The more costly of the two technologies, fMRI scan-

ners enable researchers to determine how much oxygen

is being used in the various parts of the brain while the

test subject lies completely still with his or her head

inside the scanner. The most active areas of the brain dis-

play the most oxygen flow, and “light up” on the scanner.

While more accurate—fMRI scanners enable researchers

to look deep into the subject’s cortex accurately, up to 1

mm—the technology has downsides as well. The subject

must lie horizontally and remain completely still during

the scanning—a sudden cough or laugh could cause the

entire test to be thrown out. Secondly, the technology is

expensive—one scan typically costs between $3, 000 and

$4,000 per person—which limits most companies’ ability

to test large numbers of subjects.

EEG, on the other hand, measures electrical signals

produced by the brain through sensors in a baseball-

cap-like apparatus that sits on the subject’s head. “The

EEG sensors pick up your brainwaves the same way a

microphone picks up soundwaves,” says Caroline Win-

nett, chief marketing officer, NeuroFocus Inc., Berkley,

Calif. “EEG gets the information you need. It gets deep

inside the brain; it gets the innate, inherent neurological

response that we’re looking for.” Winnett adds that EEG

does not emit any power or signals, so it’s very safe and

has been used in clinics for many years. While the test

subject sits in a comfortable environment, the baseball

cap filled with sensors is tracking heightened periods of

brainwave activity, letting researchers know which parts

of ads and messages are getting through. EEG is more

practical, affordable and portable than fMRI—in fact,

NeuroFocus’ researchers travel the country with their

equipment in tow, seeking new test subjects. In addition

to EEG, NeuroFocus uses supplementary tests, such as

eye tracking and a skin conductance test called galvanic

skin response (GSR) to add more depth to its research.

EEG and fMRI, through their development over the

years, both have changed and will continue to change

how messages are delivered to the consumer. “In prin-

ciple, the fMRI is by far much more accurate than EEG,

but EEG enables you to test many more respondents,”

says Martin Lindstrom, author of “BrandSense” and the

soon-to-be-released “BUYology: The Truth and Lies

About Why We Buy and the Signs of Desire,” which

focuses on a neuromarketing study of more than 2,000

consumers across five countries.

The subconscious mind“It actually turns out our unconscious processes are a

lot more powerful than we thought,” Steven Quartz, a

neuroscientist at the California Institute of Technology,

said recently in an interview with Fast Company. “In fact,

they’re probably better at making decisions than our

conscious access. Our conscious awareness and atten-

tion is really limited in the amount it can process.”

According to Lindstrom, about 80 percent of all the

decisions we make every day are subconscious—deci-

sions we’re not even aware we’re making. “The problem

we have right now is that brands are not really clocking

into that—they’re not really aware of how to do it,” Lind-

strom explains. “Most retailers are not really aware of it,

but the fact is that basically eight out of 10 of all the

products you put out onto the shelf, the decision to pur-

chase is made by the subconscious mind and not by the

rational mind. The majority of the focus in our study has

been to look into the subconscious mind—what’s going

on when we’re not really aware of it.”

Lindstrom goes on to explain that retailers are not

necessarily narrow-minded, but they are close to it.

“They have the world’s best opportunity to make a

sensory heaven—to appeal to our unconscious mind,

to create a place or space that really is clocking into

the emotional side of our mind,” he says. “That’s the

stage retailers should compete on. Retailers should

A p r i l 2 0 0 8 w w w . d d i m a g a z i n e . c o m

eye on

thecustomer

Which aisle should I go down?

What does that admean?

This brand orthat?

How much?

On sale?

Buy?

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EEG brain mappingmeasures electric

signals produced bythe brain.

not compete on rational dimensions, because they’ll

never ever survive.”

What are they looking for?When conducting brain-imaging tests, there are three

basic measurements that researchers are looking for—

attention, emotional engagement and memory retention,

Winnett explains. “In all of these, we can measure just as

we measure temperature in a thermometer—very pre-

cise; we can even assign a number to the measurement,”

she explains. “Those three measurements are based on

well-established neuroscience,” Winnett says. “The trick

is to take them out of the clinic and bring them into

stores, brands, advertising and the commercial market.

That’s where the magic comes in.”

NeuroFocus works with a wide spectrum of clien-

tele, and has worked with retailers to test aisle design

and in-store advertising, as well as with consumer

packaged goods (CPG) manufacturers to work on prod-

uct displays. For example, NeuroFocus recently did a

test for a large CPG company, which had created a

whole new aisle design for a number of their flagship

products. The company was hoping to get across some

new, more environmentally friendly messages that

they had not promoted quite so heavily before, and

they wanted to know if that message was coming

across successfully in their new aisle design. “We test-

ed all of those things, monitoring the brain as our con-

sumers were walking down the aisle,” Winnett says.

“We can measure whether the brain is harmonious, or

if it is hung up or confused at any point as the con-

sumer walks down the aisle. We also can specifically

test which of those messages are coming through from

that aisle design, so that our clients can determine if

certain messages they want to get across are actually

getting across.” The company determines if messages

are getting across through a well-established neuro-

science technique called an ERP test (evoked

response potential, or sometimes called event related

potential). “From there, they can refine the design to

see if it’s working, or determine if they need to scrap

the design and start over,” Winnett says.

Sensory perceptionsAccording to previous studies by Lindstrom, “83 per-

cent of all commercial communication appeals to only

one sense—sight.” This is a huge factor for brands and

retailers to consider, as Lindstrom’s new data suggests

that several other senses are just as, if not more, pow-

erful to consumers when it comes to brand impact. “Up

until now, I could base my writing on existing data and

data gathering from conventional research methods,”

Lindstrom suggests. “But if you ask everyone around

you what they are smelling in the room right now, it’s

really tricky because most of them would not be able to

describe it—they cannot define their sensory emotions.

We really needed to find another method.”

Through his new neuromarketing data, Lindstrom is

discovering that the senses of touch, taste, smell and

sound are much more important than he first thought.

“The stronger senses are smell and sound,” Lindstrom

says. “These senses are much stronger than we ever

thought, more than anyone in the world thinks they are

today. This is most likely going to change the entire way

we are going to build brands in the future, and the way

retail is going to build their in-store experience.”

About 15 percent of Lindstrom’s study focuses on

retail specifically, as he feels one of the biggest strengths

retail has today is that it can be a true sensory experi-

ence. “When you buy clothes, the first thing you do is

touch it,” Lindstrom explains. “When you buy coffee, you

smell it. You use your senses to log together information

in order to evaluate your decision. This is the No. 1

strength retail stores have, and the reason retail stores

can justify still being around. It’s going to be even more

the reason why they will stay around in the future if they

really understand the sensory dimension to it.”

Lindstrom adds the example of Howard Schultz of

Starbucks recently closing down all of the company’s

stores for three hours to re-establish a sense of smell

and re-train the Starbucks employees. Lindstrom’s firm

did a research study relating to the senses with Star-

bucks a few years back, and the results were staggering.

“The No. 1 smell that people associated with Starbucks

was not coffee, but the smell of sour milk,” Lindstrom

reveals. “The No. 2 sense that people associated with

Starbucks is sound—the sound of noisy coffee-brewing

machines. Then No. 3 was the tactile sensation of the

cup. It’s not until No. 4 that we get to the smell of cof-

fee—which is not good news for a coffee chain. That is

very much strong evidence that retailers who really

want to justify their existence really need to go back to

their roots and examine their sensory dimensions.”

Many people have noticed that certain smells some-

times bring up very strong, clear memories, as if the

whole feeling and sense of the original event were com-

ing back to them. “There is a good reason for that: smell

and memory are processed in the same area of the

brain,” says Daniel G. Amen, M.D., a clinical neurosci-

entist and author of “Change Your Brain, Change Your

Life.” “Because smells activate neurocircuits in the

deep limbic system, they bring about a more complete

recall of events, which gives one access to details of the

past with great clarity.”

Neuromarketing, unfortunately, still comes with a

stigma in the commercial marketplace—both from con-

sumers and marketers. Marketers, most of whom went

to business school and have had no exposure to neuro-

science, are leery to whole-heartedly accepting new

findings. Consumers, similarly, are not always willing or

comfortable with the idea of allowing someone to read

what’s happening inside their heads. However, as the

technology continues to evolve and the results contin-

ue to dumbfound, it becomes clearly evident that brain

mapping will be the means of unlocking the secrets to

consumers’ inner emotions that have stupefied retailers

and brands for centuries.

A p r i l 2 0 0 8

eye on

thecustomer

About 80 percent of all decisions we make every dayare subconscious—decisionswe’re not even aware we’remaking.—Martin Lindstrom, author, “BUYology”

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