Chicago startup makes store plans from 3-D world

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Rick Hanzelin (from left), InContext Solutions' chief strategy officer; Tracey Wiedmeyer, chief tech officer; and Bob Gillespie, CEO. On the screen behind them is a virtual store used in planning tests.

Updated: November 28, 2010 5:08PM

We take for granted our virtual-reality worlds of shopping, gaming, communing and networking, and now a Chicago startup is profiting from its use of virtual reality in market research and analysis.

InContext Solutions, a 17-employee firm housed in a River North loft, is using online three-dimensional technology to "walk" would-be shoppers through virtual stores and ask them to fill out a questionnaire about their likes, dislikes and reactions to certain products, displays, coupons, labels and locations.

The company's software developers created the single-platform technology so that its market research could leverage a large, geographically diverse group of shoppers from their home computers. The shoppers simply click on a Web link to enter the virtual store, and since the data remain uncompressed, see a full 3-D environment on screen.

InContext Solutions offers the research at one-third the cost, one-quarter of the time and with deeper analytical insights than conventional in-store and in-person research. Yet it still competes with companies moving into the 3-D space such as Decision Insight of Kansas City, Mo., Vision Critical of Vancouver, and U.K.-based Red Dot Square Solutions and Fifth Dimension.

"Conventional research using a researcher who asks shoppers questions at a mall or inside a store is very expensive, time-consuming and doesn't necessarily result in statistically significant data sets," said InContext CEO Bob Gillespie.

"The 3-D visualization lets companies do game theory, change competitors' prices, change shelf space and make other changes on the fly that they could never do, and not disrupt a brick-and-mortar store," Gillespie said. "We can place a product in certain areas of the store and time how long the shopper takes to find it. If the shopper reacts unexpectedly, we can refield a new question in the online questionnaire to find out why that happened."

'Pick up' a product

Said Rick Hanzelin, chief strategy officer, "The shopper can 'pick up' a product by clicking the mouse to turn the product around and read the product labels. The displays work just as they do in stores, so that soup cans roll out from their display cases, and the shopper opens the opaque door of a frozen-food case to inspect a frozen dinner."

The virtual-reality experience uses no avatars or pop-up questions because the goal is to walk the shopper through quickly, much as he or she would do in the store, and keep him focused on the product or idea being tested, Hanzelin said.

InContext Solutions has signed up drugstores, supermarkets, electronics stores, a candy manufacturer and consumer packaged goods companies that want to boost their sales quickly in today's competitive, discount-driven market. The company doesn't name its clients. InContext charges between $40,000 and $100,000 depending on a project's complexity, and promises clients a variety of insights within 60 days.

The company's principals -- Gillespie, Hanzelin, Chief Technology Officer Tracey Wiedmeyer, Chief Research Officer Rick Scamehorn and Chief Creative Officer Dave Zabloudil -- hail from the Midwest, and had no doubt they could hire a strong technology team in Chicago.

"The tech community here is amazing," Hanzelin said. "We've been hiring smart people."

The company has grown from the four founders on Jan. 12 to its current 17, with another 10 independent graphic artists who work as needed.

Hanzelin hails from south suburban Homewood and worked at Chicago's Andersen Consulting and Peterson Consulting, now known as Navigant, before helping start InContext Solutions.

Wiedmeyer played baseball at Ripon College in Ripon, Wis., for Gordie Gillespie, college baseball's winningest coach (including 24 years at the University of St. Francis in Joliet) and CEO Gillespie's grandfather.

Virtual-marketing expert

Scamehorn is regarded as a virtual-marketing expert after building his career at Tennant Co. and Market Resource Associates, both in Minneapolis. And Zabloudil, an Elmhurst native, worked for Midway Games and IBM, and taught animation production at Columbia College and computer-aided industrial design and animation at the Illinois Institute of Technology.

Analysts see the company's 3-D market research as particularly attractive to Generation Y and Millennial shoppers, who are accustomed to virtual reality and expressing themselves as individuals.

"These shoppers pressure retailers and consumer products companies to introduce new, more-tailored retail formats and products at a quicker pace," said Renee Sang, director of Accenture's Customer Innovation Network.

"The exciting part is the social-networking aspect of this kind of marketing," Sang said. "If companies can identify their loyal customers and the customers who set the trends, they let [those customers] become the marketing arm, so to speak, of new products and services."

The technology could even be used to test advertising and marketing pitches, other experts say.

InContext Solutions sees growth in a wider array of clients.

"There's no reason we couldn't do a casino, hotel lobby, car showroom or fast-food restaurant," Gillespie said. "We can create anything from a Sports Authority store to a South Korean hypermarket."

Next up might be studying respondents' brain waves. Already, magazines such as New Scientist are using neuromarketers to test possible cover stories to see which will sell best at the newsstand.