Alexander Schnack started out with a fairly standard marketing topic for his doctoral thesis, but he couldn’t find a reliable way of measuring consumer responses. The process of solving this problem has led to a new virtual reality (VR) market research business.
“I wasn’t happy with the usual survey approaches like questionnaires,” Schnack says. “With my master’s research I had some problems where I felt people would say they would buy particular things, when in reality they wouldn’t.
“So I was looking for a different way of observing actual consumer behaviour when I came across VR. I wondered why no-one was using it for market research. I thought the time was right to jump into this VR gap.”
He called on a computer programmer friend to help him build a VR system using an existing game engine. His PhD supervisor, Professor Malcolm Wright, saw its potential immediately. This led to the system being licensed by Massey University spinout company Consumer Insights.
Professor Wright, a director of Consumer Insights, says the market research company is commercialising the system, allowing New Zealand companies to use VR to test such things as product packaging, store layout and shelf positioning.
“We are now working with potential clients both nationally and internationally,” Professor Wright says. “Our business model scales up nicely, it’s internationally portable, and there are many related VR services we could launch. We hope to give VR shopper research a really strong push, and see how far we can take it.”
Meanwhile, Schnack’s thesis changed to determining if purchase behaviour in a virtual environment closely resembles behaviour in a real environment.
“I’ve compared the results of desktop simulation and VR simulation and VR is better in terms of usability and telepresence, which describes the degree of involvement in a virtual environment. The higher the telepresence, the more realistic people’s behaviour will be,” he says.
“VR simulations mimic a real shop. For example, you have to bend down to pick something up from the bottom shelf, unlike a desktop simulation where you are just clicking on items.
“So it offers a good trade-off between cost efficiency and realism. It’s much better than rudimentary tools like questionnaires, which are cheap, and a lot less expensive than test market initiatives, which cost millions because they require retailers to reconfigure their stores.”
Schnack is developing a new study to analyse brain activity while shopping in a virtual store using electroencephalography.
“We are looking not only at purchase outcomes, but also at brain activity while a person makes purchase decisions,” he says. “The software calculates the emotions people are feeling as they shop, including excitement, interest and stress.”
He hopes to compare how people feel when they use different methods to move around the virtual world, and how this ultimately affects what they buy.
“When you are hooked up to a VR system, you’re limited in the distances you can travel, so we’re currently constrained to a small convenience store environment,” he says. “If you want to test a large-scale supermarket or warehouse store, you need to find a different way of moving through it.”
The most common way of moving in gaming environments is teleportation, where the player simply points to a location and they instantly move there. Schnack’s exploratory study will investigate whether using teleportation affects consumers’ decisions.
“If you want to use techniques like teleportation in market research, you really have to understand how it might affect your results. That’s the only way you can make informed decisions when designing the research project,” he says.
Both Schnack and Professor Wright believe VR will have an impact on online sales as well.
“It will make shopping online an entertainment experience,” Schnack says, “as retailers offer immersive retail environments to build their brands.”