Kimberly-Clark Scores
With Virtual Retail Settings
By Al Heller
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 Innovation Design Studio in Greenville, Wis. (opened in May 2007), are realistic and reflective of real-world shopping, he stated.
The company has been targeting “retailer-specific shoppers to uncover better insights” that lead to actionable shopper marketing programs, said Rhodes, noting early success.
At Safeway, for example, K-C helped to develop and test new baby- and child-care retail environments “with an eye on making the shopping experience easier and more productive for busy moms with kids,” he described.
The partners tested three different nursery-style concepts to determine which performs best, why they appeal to consumers, and how they might encourage more purchases. Safeway tested them in the baby aisles of three stores. Over an 8-week period, according to Rhodes, disposable diapers sales in these stores jumped by 28%, disposable pants by 68%, baby wipes by 43%, and infant toiletries by 81%. As a result, Safeway asked K-C to help refine execution and roll the new format into more stores.
Seeking differentiation as a supplier in its categories, K-C sees virtual reality as a provocative tool for that purpose. Its novel facility has served as host to “innovative summits with leading retailers” to preview new product solutions, improve supply-chain efficiency via RFID technology, and ramp up customer-specific shopper marketing efforts to influence the customer at the point of purchase, Rhodes noted.
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.
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 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.
The company’s commitment to virtual reality comes at a time when CPG is wrestling with the question of how to most effectively deliver messages to consumers that will lift brand sales and retail productivity. Clearly, messages have multiplied and media has fragmented in recent years.
It is 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.
Market Watch
ShopperDNA Measures Effectiveness
Of Brand Communication Vehicles
By Rose Anthony
Capturing the attention of shoppers has become increasingly critical in today’s retail environment. As a result, in-store marketing and communication vehicles such as digital displays and signage help CPGs increase awareness, impact attitudes and change behavior. The end game is increasing sales and building brand equity.
But how does today’s manufacturer know what works best for a brand with a specific marketing objective? Cannondale Associates, a leading marketing and sales management consulting firm, believes it has found the answer.
The Wilton, Conn.-based firm recently developed a solution that uses cutting-edge analytical processes and methodologies to evaluate in-store marketing communication. The innovative solution, called ShopperDNA, measures activities and results by targeting shopper response as well as financial ROI vs. industry benchmarks. It aims to be an effective means of improving overall marketing effectiveness and optimization of spending.
According to Cannondale, traditional media is fragmented platform whose overall effectiveness is waning. This has forced CPGs to redirect more marketing dollars to retail as more purchase decisions are being made in-store. The numbers are clear: according to recent research, over 70% of purchase decisions are made in-store and only 16% of consumers prepare lists before they shop.
What is Cannondale offering that is so unique? So far, in-store metrics have focused on activities, not results. What ShopperDNA brings to the table is an analysis that is results-driven, not theoretical. It is quantitative, attitudinal and behavioral-based. It works by measuring shopper response and ROI among various in-store marketing vehicles and tactics while quantitative results are developed by marketing objective, vehicle, time of year, placement and message.
The approach incorporates four fundamental metrics:
- Demand through brand/communication awareness and engagement
- Changes in attitudes and intent through the right communications
- Activation through an immediate product purchase
- Repeat or sustained change in consumer behavior. Key benchmarks include: trial, source of volume and performance by shopper segment.
These solutions couldn’t come at a better time, according to Cannondale. Marketing is shifting to the place where customers make their purchases – the store. Success will hinge more and more on solutions that are behavioral-based to drive results.
ShoptoCook Upgrades Content
The Reader’s Digest Association will be the exclusive media content provider and integrated sales resource for ShoptoCook’s in-store, interactive kiosk offering instant meal solutions to consumers at the point of purchase. Under the agreement, recipes, shopping lists, food preparation tips and pairing suggestions from the premier food properties of RDA, including Every Day with Rachael Ray, Taste of Home and Allrecipes.com, will be featured.
The kiosks are available to millions of shoppers in progressive and influential chains like Bloom, Schnucks, Spartan Stores, Brookshires and divisions of AholdUSA. Interactive units are positioned in the high-traffic produce and meat sections of grocery stores. Consumers can choose from a variety of recipes and coupons, print them out, and take them along as they shop.
Store Entrance Ads Debut
The conventional methods of advertising through television and magazines have a creative new competitor. News America Marketing is launching SmartSource Entrance Ads, which wrap store security pedestals with vibrant full-color, oversized advertising. The ads, intended to grab a consumer’s attention the moment they walk through the door, are the only form of in-store advertising that can guarantee reaching 100% of shoppers. Ads get a facelift every four weeks, ensuring that they always look fresh. They will be installed by an in-house field force with rollout plans scheduled for this summer.
Company research shows that advertisers can reach a wider audience than airing a television commercial during even the most popular programs. Entrance Ads deliver a reach of 28 million and impressions of 110 million, as compared to a reach of 25 million for a top-rated TV program. Magazines such as Family Circle, Good Housekeeping and Women’s Day only offer reaches of 18 million, 17 million and 16 million respectively.
APRIL 2008
McCormick Spices up Sales
With Gravity-Feed Shelving
By John Karolefski
An innovative merchandising fixture deployed in supermarkets by McCormick and Company is driving brand and category sales for the world’s leading maker of spices, herbs and seasonings.
The gravity-feed shelving installed in larger U.S. grocery stores aims to make it easier to for consumers to shop the section which is stocked with dozens of varieties in small bottles. The fixture has increased sales by “mid-single digits” and cut labor costs in half, according to Alan Wilson, president and CEO of the Sparks, Md.-based company.
“Spices are an extremely confusing category for the consumer who wants to spend less than a minute finding what she is looking for. It is also very difficult to merchandise because you have to touch every bottle,” he said, speaking recently in Philadelphia at the second Food Industry Summit sponsored by St. Joseph’s University.
The merchandising program began 18 months ago when McCormick aimed to revitalize the spice category. The gravity-feed system is now deployed in some 9,000 supermarkets with the goal of putting the shelving in 12,000 to 14,000 stores. Installations, which have proceeded regionally across the country, are now taking place in the northeast at chains such as Giant of Carlisle.
“This program works in A and B stores,” said Wilson. “We have to have a certain amount of linear feet to get variety into the set.”
Products are stocked alphabetically. Bottles slide forward when the first one is taken off the tilted shelf, resulting in a shelf set that is always faced fully.
“We’re able to feature new products and generate some excitement in the category,” said Wilson.
During his talk, Wilson outlined growth opportunities for McCormick. They included expanding the line with organic products and with single-serve packaging. In 2007, the company opened the McCormick Science Institute to advance the culinary health benefits of spices and herbs.
“We want to make sure the category stays relevant,” he said. “Spice consumption continues to grow and is very healthy.”
Gravity-feed shelving was popularized by the Campbell Soup Company in 2002. Today, its original system for condensed soup is in about 23,000 stores. A larger version that includes ready-to-serve soup is in about a quarter of those stores.
The success of both the Campbell and McCormick programs comes after retail critics downplayed the concept of gravity-feed shelving. They said shoppers would replace products in the wrong slots and the display would increase labor costs for retailers. The response from shoppers and retailers has proven critics wrong.
“Where we’ve installed [the racks] we have had very positive feedback,” said Wilson. “It’s really been a successful program.”
McCormick, a 119-year-old company, sells products in 100 countries. Sixty percent of its business is in the U.S. with the rest international. Nearly 60% of its sales are directly to consumer, while the rest is to industrial customers.
Market Place
Foodtown Emphasizes
Nutritional Program at Shelf
By Lynne Cooke
Foodtown, a grocery chain with 58 stores in the northeast, is the latest grocer to implement a nutritional program. The retailer is supporting its “Easy to Eat Well” initiative with shelf-edge communications.
Easy-to-read shelf tags operate as color-coded “flags” used to identify foods that meet special dietary needs, such as Gluten Free, Healthy Kids, Organic, and Heart Healthy.
“Part of Foodtown’s mission is to e a family-friendly place to shop,” said John Durkin, vice president of operations for the chain based in Little Rock, Ark. “The East to Eat Well program lets our customers know we are making it extremely easy to get healthy at Foodtown.
“We are proud to be one of the first retailers in our market to deliver this type of information at the point of sale. We see it as a jumping-off point for an overall healthy program Foodtown plans to extend to the community in a variety of ways . It is very exciting.”
The informative tags provided by Vestcom International comply with Foodtown’s store branding requirements and capture the customer’s attention without cluttering the aisles or interfering with overall store design. The shelf-edge dietary tags are part of Vestcom’s new
health and wellness education marketing program available to retail food clients.
“Foodtown is a retailer that understands the tremendous benefits that come from providing in-store marketing programs that truly make a difference,” said Tim McKenzie, president and COO
of Vestcom.
Next Generation Shopping Carts
Shopping carts are becoming more interactive. Cabco Group, maker of interactive TV screens mounted on carts, plans to replace its existing models with an upgraded, interactive screen that faces the shopper. Called TV Kart, the new design has been rolled out to 20
H-E-B stores in Texas as well as to the Tom Thumb chain, a division of Safeway. The current model of TV Kart, without the upfront screen, is in about 450 stores in the U.S. including select Publix, Wal-Mart, Kmart, Dominick’s, and Meijer locations.
The new technology will employ RF sensors to trigger ads on the interactive screen as the shopper moves through the store. Featured prominently will be buttons on a menu that can call up additional information such as recipes and nutritional facts. For parents with bored children in tow, the TV Kart can display children’s programming.
P&G Partners with O4
O4 Corporation has equipped Proctor & Gamble with software to maximize the productivity of partner retail sales. The consumer products giant has already reported strong user adoption in markets around the world.
With its new technology, P&G’s retail reps are able to effectively plan visits, execute in-store audits and analyze performance. Also, management is now able to electronically distribute field activities and access results in real-time across multiple geographies, languages and cultures.
