May 24

Fast Innovation At The Shelf: How Kimberly-Clark, Procter & Gamble, Pepsi Co., General Mills Speed Up The Launch Of Their Innovations Via A Virtual Store

To launch innovations faster and still successfully. That is the objective of  Fast Innovation. For this the customer must be understood in depth. Kimberly-Clark, the Innovation Machine Procter & Gamble, Pepsi Co. and General Mills demonstrate which innovative methods help in discovering consumer insights faster. In their innovation management they make use of a Virtual Store.

For the sake of approaching the “truth” in the consumers´ opinions, the “tree of truth” offers diverse methods. These methods, proceeding from the top to the bottom, become ever more exact and unearth progressively better consumer insights  Top-innovators increasingly replace methods of consumer interviews (at the peak of the tree) by methods of observing the consumer (at the bottom of the tree).

Fig. “Tree of Truth”

This minimizes the risk of conditioning the consumer. Those companies that can observe their consumers without them noticing it do have optimum precondistions. In particular if they can observe their customers not only when they select a product in the store but if they can also observe them unnoticed in their situations of consumption or usage (e.g. restaurants, mobile phone companies).

The product selection at the shelf is typically the first critical moment, or, as P&G declares, „the first moment of truth“, in order to win over the customer. Will the consumer pick the innovation and put it in her shopping basket ?

Part of the innovation management of a company is to explore this critical moment in a real-life situation of a shop. For this purpose, one or several nicely looking mock-ups of the new product or rather of its package need to be made, and the in-store test needs to be agreed with the store manager with a sufficient lead time. In case it turns out in the test that the package of the innovation needs to be improved, it has to be modified, and the test needs to be repeated.

A modern-day alternative for the innovation management is a Virtual Store. It accelerates the innovation process considerably in the spirit of Fast Innovation, and it possibly saves cost.

Kimberly-Clark (KC) and the innovation machine Procter & Gamble (P&G) are two examples of companies that have built such a Virtual Store  for purposes of their innovation management and in order to generate valuable consumer insights. In Neenah, Wisconsin, Kimberly-Clark opened its Innovation Design Studio last year. The center utilizes a proprietary virtual reality system in order to help KC in generating critical consumer insights fast. Consumers enter the three-angled Virtual Store through the open side. They can stroll along the shelves of this interactive 3-D store model, they can enter their purchase descisions via a touch screen, and can react to virtual displays and virtual promotions. Sophisticated eye-tracking technology is measuring the direction in which their eyes are looking and the level of engagement of the consumers in response to the stimuli in the store. KC can test new ideas via its Virtual Store without a significant time investment in the individual test set-up and without incurring the cost of the mock-ups of the new product. Within a short time span the virtual shelf can be “re-programmed”. How it feels walking through Kimberly-Clark´s Virtual Store is demonstrated by the following video by ABC ( Click on this link ).

The innovation machine Procter & Gamble, too, uses the method of a Virtual Store in its innovation management in order to accelerate the innovation process in the spirit of Fast Innovation, to more rapidly test innovations with consumers, and to gain consumer insights faster. Sine the beginning of this decade P&G has been working on a Virtual Store. The first Virtual Store for purposes of the innovation management was opened by P&G in the Beckett Ridge Innovation Center in Cincinnati. P&G has another Virtual Store in Weybridge, Surrey, UK, which also makes use of the Cave 3-D technology. Packages of new products can be easily ”placed”  on the virtual shelves. The consumers can walk though the store, can stop in front of the virtual displays, can “take” products from the shelves, turn them in order to read the ingredient labels, and buy them if they wish. P&G researchers compared the test results of the Virtual Store with the results that traditional methods would have yielded. They are satisfied that the virtual simulations generate results that are robust enough to be useful. P&G is still working on removing the remaining “reality barriers”. For instance, the computer mouse that had been used to “pick” products from the virtual shelf is being replaced by a virtual trolley plus glove.

But besides the rather expensive method of building a Virtual 3-D Store which the consumers can physically enter there are more affordable virtual methods in innovation management to generate consumer insights faster. One such method is leading the consumer through a virtual store at the computer screen. Companies such as Pepsi Co. and General Mills use this possibility for their Fast Innovation.

(c) Rolf-Christian Wentz