Going Where CPGs Do Research

On-site research labs were once few and far between at CPG headquarters, and they've come a long way since the days of near-empty rooms for testing displays and planograms. Today, major companies have resources ranging from dedicated office space for focus groups to large mock-store environments used not only to test merchandising but to research shopper interactions and emotions.Before Hewlett-Packard opened its 2,000-square-foot research lab in Vancouver, Wash., nearly five years ago, the shopper marketing folks could only send out PDFs showing sample store layouts. In 2006, the shopper insights team campaigned for a lab to help intimately partner with retailers, as well as internally with marketing teams and R&D. "Now we can make real-time changes," says shopper marketing lead, Karen Stermitz.Stanley Black & Decker used an external agency for recruitment and testing before opening its facility about 12 years ago. It performed 95% of all research online and did very little in-store. At that time, the tool company was using an in-house space for focus groups.Tim Dunphy, group marketing research manager, says the company saw the need to start using it for research in 2006. "There was a definite need to be able to conduct research at a cost savings because budgets weren't huge," he recalls. "There was a huge need for the company to get this research done. Skipping that step just increased the risk of failure and not getting it right. It was less demanding from a budget standpoint, using our internal folks and our expertise."In years past, Shopper Marketing has covered companies like Nestlé-Purina with its two learning centers and singular mock store; Fisher-Price, which brings adult and kid shoppers into its Play Lab; Frito-Lay, where recruits wear brain caps, glasses for eye tracking and a skin galvanizer when walking its large mock store and lab; and Sara Lee's 120,000-square-foot "Kitchens," where chefs, scientists, engineers and packaging designers all work together. Many top American manufacturers are utilizing in-house research labs like Hewlett-Packard (H-P), Stanley Black & Decker and GlaxoSmithKline (GSK). Other companies may not build research facilities but use virtual retail environments to test products and planograms (see sidebar for more).But, those interviewed here say the insights gathered in on-site locations can save companies thousands of dollars from producing inefficient marketing materials, and earn brands a significantly better market share by taking competitors to task.Hewlett-Packard (H-P)Hewlett-Packard's lab was designed to mock the aisles of many major big box stores selling its products. The company tests many of its campaigns as it receives the first prototypes, approximately three to six months before launch. "It's the ideal store for shoppers based on their insights and what they want," Stermitz says. The room, which is owned by the company's Americas shopper marketing team, has two, double-sided aisles and mock retail experiences like endcaps. There's also a "play space" where employees have the flexibility to create anything they desire.Depending on the type of study the H-P crew wishes to perform, the company may recruit from the streets. They also do shop-alongs. Since Stermitz explains that 96% of shoppers research online first (and 79% still buy in-store), they oftentimes sit recruits in front of computers first to gauge their reactions, then let them "shop" in the mock environment. "We believe strongly in online and in-store integration," Stermitz says."It has been hugely beneficial," says Tyler England, H-P's Americas customer and market insights manager. "Now we're leading with shopper insights. We were not able to do that before. It has changed the way we do business."Sometimes the adjustments made as a response to research efforts are gradual and painstaking -- one example cited was a packaging sticker that was changed nearly a dozen times before going to print -- but they say these efforts are always worth it in the end. Because the company was able to test all of its tools before its Photosmart Interactive product hit the market, the team estimated the launch resulted in 10 times more interaction from customers after it was placed on shelves.H-P also brings retailers in regularly to test planograms, merchandising and mobile tools. Aside from Microsoft, which has a 20,000-square-foot facility it calls the Retail Experience Center, England and Stermitz say they are not aware of any competitors with a dedicated research lab. Microsoft's center resides at HQ and is used to showcase its latest technology, digital marketing, visual merchandising and store design.Stanley Black & DeckerBlack & Decker University (BDU) in Towson, Md., is a 36,000-square-foot facility comprising a floor area where all of the company's tools are demonstrated and used, along with seven state-of-the-art classrooms, mock aisles and meeting room facilities. The facility, which also has a house built inside it, is used for internal and external training, media events, meetings and research. The company also has two BDU facilities in Europe and one in the Middle East that it currently uses for training, media events and meetings.Though the American-based structure was definitely expensive to build, Dunphy says there's a huge cost savings. "In an external facility, the clock starts ticking as soon as you hold the space. If it's something elaborate, you don't have the time to get it done well. We're able to get our designers out there and do tweaks before the research phase. We're not rushed, so that really helps bolster validity." The facility is used every day by all of the company's brands, including Porter-Cable, Delta and DeWalt, but they only test their high-profile or challenging products. Dunphy estimates Black & Decker launches 75 new products each year.BDU came in handy when the company did a flagship study of its SmartSelect drills and jigsaws, which featured a camera-like dial that would allow the user to adjust settings. What they found through introducing it at the lab was that shoppers either didn't notice or dismissed the product, and they didn't even realize the dial was a feature. "We had developed that packaging hundreds of times," he recalls. "We were missing how our packaging was effective in a competitive set. When the end user walks down the aisle, what are they noticing?"Because of the significant cost savings, having an on-site facility allows the company to do more research than it would've done in the past. The company recruits from a large internal database of users captured through product registration and sweepstakes entries, as well as from the local population.They conduct focus groups, introduce new products and prototypes, and can even do one-on-one interviews after a customer uses a product on-site. And they invite retailers to visit and learn to use the tools. This has proven a much more effective way to get them involved than just sitting them through a presentation.Stanley Black & Decker mainly uses the facility to get feedback on an idea, unearth engineering feasibility, introduce a rough prototype, or discuss commercialization. Once the concept is agreed upon, the company will introduce packaging concepts and competitive setups to focus groups so it can drill down to the top one or two selling points that need to be addressed to get a customer's attention on the shelves.The project has been so successful that B&D was considering expanding upon BDU, but with the recent Stanley merger, Dunphy suspects they will soon have use of its New Britain, Conn., office for other research projects.GlaxoSmithKline (GSK)Moon Township, Pa.-based GSK has a focus group room in Pittsburgh and consumer research facilities in Parsippany, N.J., that its marketing team mainly employs. "We saw this as a great opportunity to invite consumers in to gain deep consumer insights, discuss new ideas, conduct taste tests, review and optimize new packaging concepts, [and] test understanding of a marketing message, etc.," Peggy Franzese, the company's research coordinator, says. "We conduct a variety of different qualitative research in both facilities including focus groups, in-depth interviews, dyads/triads, paired interviews, consumer walks, and employee discussions. We also conduct health care professional focus groups and interviews in both facilities." The facilities are utilized approximately two to three times each month since the company doesn't test all of its products at its on-site facilities.The Pittsburgh property, which opened in 2005, has several different setups, including a consumer interview room, a back room for internal clients, and a merchandising/mock store space. The back room is connected to all GSK locations via closed-circuit television so other sites can view the experience remotely. "This provides maximum flexibility and saves travel expenses," Franzese says.Opened in 2007, the Parsippany facility has a back room with a two-way mirror that looks into a large consumer room designed to accommodate a variety of setups. "For example, the room is equipped with a sink so we can actually set up a brushing station if we are looking to conduct any type of research on our oral care brands," she says.Having these facilities has allowed the company to shorten lead times and lessen costs since it can react to market situations quickly. Plus GSK benefits from reduced travel costs, and employees are able to spend less time away from daily work activities. "There are times when we don't know the right path forward, and having this facility allows us to pilot test some ideas first," she says.GSK outsources recruiting and provides potential participants with a detailed questionnaire outlining project specifications. The company also uses a third-party moderator to conduct interviews.

Going Where CPGs Do Research

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