Red Dot Square Renders ?Virtual’ a Market Research Reality

Red Dot is in the construction business; it builds retail stores. Sort of.

Instead of building brick-and-mortar supercenters or grocery stores, Red Dot Square Solutions Ltd. builds them out of pixels, in the cyber ether known as virtual reality.

In June, Red Dot, based in the United Kingdom, opened its second full-fledged U.S. office in the Pinnacle Hills area of Rogers. The company believes its mix as a high-touch, über-tech company and consumer package goods market researcher will go over well in the backyard of the world’s largest retailer. With good reason – it already boasts clients such as General Mills Inc., Unilever, Kimberly-Clark Corp. and Kraft Foods Inc., not to mention retailers like Target Stores Inc., Tesco PLC and, of course, Wal-Mart Stores Inc.

At its most basic form, Red Dot uses 3D computer rendering and virtual reality technology to facilitate collaboration between CPG manufacturers and retailers. In many instances, that collaborative effort can then be used in the field at test stations around the country. From those stations, the company can measure consumer behavior in a simulated shopping environment. 

But most of the golly, gee-whiz stuff is in the company’s ability to render an entire Walmart Supercenter in 3D and project it onto a 30-foot concave screen located in its Rogers office. It’s ,like a scaled down Imax theater for retail wonks.

One of the most obvious benefits from the service Red Dot supplies is that it can eliminate or reduce the need for a retail supplier to build out actual store planograms (product placement plans) in their own offices or in rented space (think less rent, reduced man hours spent building and tearing down, fewer package mock-ups). It puts a specific planogram pitch within the context of a retailer’s own store, which helps buyers think through potential pitfalls and benefits.

“The reason we’ve been successful is that our CPG partners are looking for new solutions to old problems,” said Mark Rhodes, head of North American customer relations for Red Dot.

Red Dot was formed about three years ago and sold to British company WPP PLC in February 2009. A press release about the transaction pegs Red Dot as closing 2008 with 60 employees and unaudited revenue of £6.1 million, or about $9.5 million USD.

Rhodes said there is competition in the VR category of consumer research, but the technology and its application is so new there’s not a well-defined industry value or market share.

 

ICE ICE, Baby

Rhodes and Matt Martin, a citizen of the U.K. and Red Dot’s manager of advanced technology, recently led a presentation at the Rogers office. It’s really not an office in the traditional sense. The company calls it an Innovation and Collaboration Environment, or an ICE lab. The space is designed to break down barriers between people and foster open communication. Meeting spaces are circular.

Red Dot gains permission from retailers to build a visual library of a typical store and supplier-clients work with the company to build a library of its packaging in specific categories. (For instance, Red Dot likely has an image library of all General Mills cereal boxes.)

From the visual library, a team of 3D modelers and computer programmers build a virtual store and virtual packaging that can be projected onto a screen. From the back of the projection room, a technician takes directions from the 16-seat audience and “walks” anywhere in the store. If the audience team is, say, General Mills working on new packaging concepts, the audience might be suddenly looking at a near life-sized facsimile of the cereal aisle. The technician can then walk the audience to its section or shelf space, pan up or down, left or right. Once in front of the shelf space, an audience member can direct the technician to “pick up” a product. A representation of that product’s packaging is enlarged, filling much of the 30-foot screen, and can be rotated to look at all panels from different angles.

The benefit of this, Martin said, is that a CPG client can prep a presentation to a retailer without “PowerPointing them to death.” When the CPG client schedules time with a retail buyer, they sit together in the audience section and the presentation becomes a collaboration.

 “It’s amazing what type of dialogue you get with decision-makers when you get them in a non-traditional space,” said Rhodes. “Then when players and decision-makers are put in the context of their store, then they really start thinking.

“It’s truly about collaboration at it’s best.”

Once a presentation is complete, clients can opt to test market their product with consumers.

Red Dot has the ability to test in about 60 research facilities around the country, using a device called a SmartStation, which is essentially a shopping cart connected to a TV screen. The research facility runs Red Dot’s presentation and allows shoppers to navigate through the virtual store and even virtually pick products off the shelf. All the while, biosensors track the consumer’s eye movements, what packages she picks up and what panels she looks at. That information helps CPG clients make sound decisions before they make expensive capital investments.

Traditional market research on new products or packaging, or even store layouts, involves a consumer being shadowed or debriefed after their shopping experience.

“In a traditional method, you’d just be talking. There is a deeper insight by observing them in a virtual world,” Rhodes said.

“The way we use it gives us a more efficient speed to market with optimal results,” said Regina Bailey, director of category management for Unilever’s office in Rogers.

The company has used Red Dot’s services to test merchandising, product development several other factors.

“This is not a solution to get at every single problem, but it opens a new door to get an insight that is faster, better and sometimes cheaper than traditional methods,” Rhodes said.

“This is a way to bring things to life.”