Shopping With Big Brother

MINNEAPOLIS — As a savvy advertising executive, Tina Wilcox knows what sells. And she has a hunch that $70 air freshener will not.

But there’s a manufacturer convinced that folks will pay perfume prices for a decorative spritzer wrapped in fabric and filled with scents reminiscent of fresh-baked cookies, or mossy summer-camp hikes, or grandma’s floral soap. He wants Wilcox to test his product in the market.

So she opens up her laboratory: a retail store wired to spy on shoppers.

The Once Famous boutique is invitingly eclectic, jammed with artsy accessories and upscale home furnishings, from velvet beaded pillows to ornately carved chairs to china imprinted with the Eiffel Tower. But hidden amid the jumble, surveillance microphones and video cameras record shoppers’ every move.

The boutique is an elaborate attempt to learn what all manufacturers and retailers want to know: why shoppers buy what they buy and ultimately, how they think.

Which displays snag their attention? Where do they linger? What do they ignore? How do they react to a bargain? What do they mutter to justify a splurge?

The traditional way to answer these questions has been simply to ask them. Researchers would intercept random shoppers as they browsed, for on-the-spot interviews. Or they would gather a dozen customers into a “focus group.”

Many marketing experts, however, now find such forums too contrived, and too easily manipulated: Participants tend to give the answer they think the researcher wants, not their honest opinion.

So the latest trend in the science of psyching out the shopper--a trend propelled by the development of new technology--is “observational research,” otherwise known as “retail ethnography.”

Market analysts monitor how shoppers move through a store, what they pick up and how they handle it, how much time they spend comparing prices or reading labels. “You get a purer reaction,” Wilcox explains.

Once Famous takes this new tactic to an extreme because the store was set up for the purpose of conducting research. Marketing experts say it’s the only retail lab in the nation.

Where surveillance technology is in use elsewhere, it’s integrated into existing stores. From convenience marts to department stores to national chains with thousands of outlets, just about any retail environment can be wired as a clandestine lab.

Networks of hidden cameras can size up each person who enters a store and follow him as he moves from aisle to aisle, recording how long he stops at each point. Such information, multiplied by tens of thousands of consumers, can help retailers identify which marketing and display techniques woo the most shoppers. That’s data no focus group could give.

“If you stop shoppers coming out of a store, I don’t think they can tell you, ‘There was this [display] near the front door that felt awkward so I looked away, and because of that, I missed all the new merchandise laid out to the left,’ ” said Kirthi Kalyanam, associate director of the Retail Management Institute at Santa Clara University.

Surveillance also can be used to gauge how shoppers react to specific products.

If a woman dallies at a cosmetics counter, for instance, a camera might zoom in to capture her expression. Studying the video later, analysts can see whether she’s intrigued by a new shade of lipstick, struggling with a hard-to-open package or intently comparing prices. Cosmetics companies can then use these observations to refine their products or tailor their advertising.

“We can learn things about consumer behavior by observing real consumers that we cannot learn any other way,” said Leonard L. Berry, who founded the Center for Retailing Studies at Texas A&M; University.

That’s why Wilcox set up Once Famous.

Wilcox, 46, is the chief creative officer of Fame, a subsidiary of advertising giant Omnicom Group Inc. Fame markets itself as a “retail brand agency” that helps chain stores define a distinctive image. The agency also works with manufacturers to design and launch new products. Among its clients: Target Stores, General Mills, Tupperware and Energizer Batteries.

When Fame moved into cavernous new downtown headquarters last year--its 63 employees get around on scooters--Wilcox hit upon the notion of using the front 1,800 square feet of space for a “retail laboratory.” She would open a real store that would attract real shoppers, and use it to run experiments for clients. Her aim was not to make money, but to observe how money is made.

From her stuffy control room, Wilcox watched the other day as store clerks subtly steered shoppers toward the table with the $70 air fresheners. Many appeared to like the scents. Then they checked the price.

Eyebrows shot up. Eyes widened. Lips pursed.

“Whew,” one woman whistled.

“I’d maybe use a Glade PlugIn,” a man said, hastily putting down the spray and backing off.

Listening on her headset, Wilcox grimaced. It was just as she had thought: The price would have to come down, way down. Maybe she’d test it again at $40, or $38.

Even then, the manufacturer would have to better promote the product as a decorative accessory, not just a fragrance, Wilcox mused. The spray needed a classier look--a gold spritzer perhaps, with some sort of crest. The new packaging had to shout luxury. And it had to make a bold statement on the bathroom shelf. Or else a $4.95 Glade PlugIn would win every time.

She would show the manufacturer her candid video. One look at those raised eyebrows and he would have to agree his product needed serious rethinking.

Such experiments cost Fame’s clients $15,000 for two days of recording and $100,000 or more for longer tests.

Since opening last November, Once Famous has focused on home accessories, with a lush, boudoir-like atmosphere that Wilcox describes as “romantic bohemian.” To her surprise, the merchandise--most of it there to entice shoppers, not as part of a product test--has proved so popular that the store has turned a small profit, quite apart from the lab work.

Still, Wilcox is willing to strip the boutique to its crimson walls, stashing the inventory in her ad agency until it’s needed again, to create a lab with a very different look.

One client, Wilsons Leather, is considering taking the whole space over for a few months to test its new leather accessories.

“When you take your products to a focus group, they really know they’re on camera,” explained Joel Waller, the company’s chairman. “This is a much more valid customer experience. They’re not looking to impress anyone by picking out the ‘good’ styles. You’re seeing their real reaction.”

Another client, General Mills, may turn the lab into a clothing store to see whether it could sell specialty groceries in such an unexpected environment. Would shoppers snag a soy drink from a cooler as a break from trying on shoes? Might they pick up a holiday cake mix or a festive box of cookies while browsing Christmas sweaters?

“We’re always looking for opportunities [to sell food] outside the normal grocery store,” said Mark Addicks, vice president of marketing for General Mills. With Once Famous, he added, “we can try different things within minutes.”

There’s rarely a shortage of research subjects. Once Famous opens to a food court that connects two office towers. Thousands of people walk past each day at lunch. Many stop in, drawn by the funky chandeliers and the handmade greeting cards, the Japanese bath salts and the Oriental rugs.

A subtle sign at the entrance warns shoppers when the lab is in “test mode,” and adds: “If you prefer not to be recorded, kindly visit when this sign has been removed.” Wilcox is developing a more eye-catching sign, with a blinking light.

For now, however, many breeze past without reading the warning--and never know that their every move, their every wistful stare and disdainful sniff, is being taped. Even those who do know say they soon get so involved in browsing--the merchandise changes almost daily--that they forget they’re on camera.

“They’re really unaware,” said Coco Sullivan, the store’s full-time sales associate.

Such surveillance is perfectly legal. Experts in privacy law say retailers are free to record, videotape or otherwise monitor their shoppers, except in areas considered private, such as fitting rooms. They are also free to do as they like with the data they gather--including sell it.

“There’s broad recognition that we give up virtually all our expectations of privacy when we go into a public area like a mall,” said attorney Sheldon Krantz, who recently chaired a task force on surveillance for the American Bar Assn. “There is virtually no regulation of this area at all.”

That makes some privacy advocates edgy, but few shoppers at Once Famous seem to mind.

“Now that I know [someone’s listening], maybe I should walk around and make more comments,” said Jamila Petite, a sales representative who had drifted in on her lunch break without noticing the sign.

Marketers, of course, have always cared about consumer opinion. Until recently, however, gathering such information was laborious.

In addition to convening focus groups and interviewing shoppers, researchers would lurk in grocery aisles, stopwatches in hand, to time how long customers looked at each product. They would trail alongside shoppers as they browsed, quizzing them on their purchases. Or they would pay select consumers to keep a diary of their shopping experiences.

One famed retail ethnographer, Paco Underhill, developed a technique for secretly videotaping shoppers as he trailed them through stores. Underhill’s research firm, Envirosell, now employs 100 such “trackers” worldwide.

The new surveillance equipment can track the behavior of many more shoppers for much less work.

Much of the basic hardware is familiar: hidden cameras and sometimes microphones concealed in ceilings. The difference is in the software that links all the cameras in a store so they can follow a shopper’s route instead of just videotaping whoever moves in front of each lens.

The individual shopper, identified by body mass or body temperature, is “passed” from camera to camera so his movements can be fluidly mapped. There are also programs that automatically direct wall-mounted cameras to zoom in on a shopper’s face if he lingers more than a few seconds in one spot. And there is software that turns hours upon hours of video into digital maps of shopper behavior.

“We can tell if someone picks up a Coke, sees a sale sign, puts it back and buys a Pepsi. We can tell how many people pass by a certain cardboard display,” said Stan Beck, a vice president of Brickstream Corp., a leader in the emerging field. “This technology can provide much greater insight into consumer behavior than our old way of doing things.”

Brickstream, for instance, is working with a soft drink firm that sells its sodas at 10 locations within a typical SuperTarget. The company wants to find out which sites draw the most traffic so it can focus its promotion efforts there.

Another client, a brewery, wants to know whether it’s worth it to pay a premium for space in refrigerated cases. Inventory controls don’t answer this question: A six-pack scans as a six-pack whether it’s warm or cold. But hidden cameras can track whether shoppers head for the chilled beer or buy it off the shelf.

“Our clients can understand exactly what their clients are doing--and why,” Beck said.

Such insight can be pricey. Monitoring an average-size convenience store with Brickstream costs a minimum of $300 a month for a long-term contract. (Unlike Once Famous, Brickstream does not provide video footage of shoppers or transcribe their comments.)

The cost is not the only hitch. Truth is, most retailers and manufacturers are swamped with data. They track sales figures and coupon use. They monitor inventory. They survey customers. Hidden cameras can give them more information still. But then they have to figure out how to use it.

“The question is, how do you crunch all that data to achieve results?” Underhill, the ethnographer, said. “Moving from data to information to intelligence to wisdom is part of the challenge.”

That was evident one recent afternoon at Once Famous, as Wilcox watched from the control room while a young woman browsed through a collection of writing supplies.

The woman picked up a spiral notebook in deep purple and gazed at it intently. She put it down, stared into space, picked it back up. She gave it a little caress. She put it down. She picked it up. She rubbed her chin.

Wilcox figured the woman was hung up on the $15 price.

As it turned out, the shopper had decided to buy a notebook the moment she saw the display. She had been standing there wishing they came in green.

“They’re watching me,” Pauline Neumann said as she paid for the purple notebook. “But they don’t know what I’m thinking.”