Leveraging competitive value from neuromarketing research in retailing - An opportunity waiting to be exploiterd

dŚĞZĞƚĂŝůĂŶĚDĂƌŬĞƟŶŐZĞǀŝĞǁsŽůϭϮ/ƐƐƵĞϭ;ϮϬϭϲͿ 92 /HYHUDJLQJFRPSHWLWLYHYDOXHIURP QHXURPDUNHWLQJUHVHDUFKLQUHWDLOLQJ± $QRSSRUWXQLW\ZDLWLQJWREHH[SORLWHG CH Bothma Department of Marketing and Retail Management University of South Africa [email protected] CM Bothma Masters student in Psychology University of South Africa JPR Joubert Consumer Neuroscience Lab Bureau for Marketing Research University of South Africa PERSPECTIVE Understanding the consumer and in the case of retailing, the shopper, is a key contributor to business success and has been acknowledged in marketing literature for a long time. In fact, in 1923, Professor Kitson already recognised the need to understand the consumer’s mind addressed in an article entitled, not surprisingly, “Understanding the consumer’s mind” (Kitson 1923). Building on the need to focus on the FRQVXPHU¶VPLQGWKHPDUNHWLQJFRQFHSW¿UVWSXW forward by McKitterick1&(2RI*HQHUDO(OHFWULF in 1957, speaks of addressing consumer’s needs DVWKHFRQFHSW¶V¿UVWDQGRULJLQDOFRUQHUVWRQH7KH other cornerstones include an integrated systems DSSURDFK DQG WKH IRFXV RQ SUR¿WDEOH EXVLQHVV (both articulated by Kotler [1967]), as well as societal awareness – a more recent addition to the concept (Kotler 2000:14). Understanding retail consumers goes deeper than gathering broad insights into the community of consumers and shoppers, and instead focusses on understanding their individual needs and wants. This is where marketing research comes into play and much of the marketing research effort undertaken today is about understanding these individual needs and wants through the use of survey and interview research. But even understanding the needs and wants of consumers is not enough and the shift, more recently, has been on understanding how consumers think subconsciously and how they go about mentally making decisions as to what they need and want, as well as what to buy and their response to marketing promotions (Brosekhan & Velayutham 2008). This is where neuromarketing comes into being. 1HXURPDUNHWLQJ LV D UHODWLYHO\ QHZ ¿HOG RI HQGHDYRXU ûRVLü  .XPDU ±  0DUWLQH]  DQG LV DERXW VWXG\LQJ the neurophysiological workings of the brains of individuals. Neuromarketing attempts to understand their mental or ‘subconscious’ activities in reaction to marketing stimuli, not least of all their decision making when choosing between alternatives (e.g. products, prices, brands, etc.) or their rational or emotional responses to marketing campaigns initiated by organisations (advertising, social media campaigns, sales promotions, etc.). Lee, Broderick and Chamberlain (2007:200) GH¿QH QHXURPDUNHWLQJ ³DV WKH DSSOLFDWLRQ RI QHXURVFLHQWL¿FPHWKRGVWRDQDO\]HDQGXQGHUVWDQG human behaviour in relation to markets and marketing exchanges”. It therefore provides an insight into the ‘black box’ of the brain, directing the decisions of consumers and shoppers and their actions. There are different acknowledgements for the origin of neuromarketing. Some sources credit Professors Zaltman and Kosslyn from Harvard IRU ¿UVW OLQNLQJ EUDLQLPDJLQJ WHFKQRORJ\ ZLWK marketing in the late 1990s (Fisher, Chin & .OLW]PDQ 7KH (FRQRPLVW  2WKHU sources credit Professor Ale Smidt and Brighthouse 1 Druker has also been acknowledged as one of the ‘fathers’ of the marketing concept (Drucker 1954). 93 DQ$WODQWDEDVHGDGYHUWLVLQJDJHQF\UHVSHFWLYHO\ IRU¿UVWLQWURGXFLQJWKHWHUPQHXURPDUNHWLQJLQ ûRVLü)LVKHU&KLQ.OLW]PDQ 2010:2; Kumar, 2015:525). Neuromarketing is also an offshoot of neuroeconomics, which in turn, is an offshoot of neuroscience (Rebecca & Belden 2006). The phrase ‘neuroretailing’ (and derivatives thereof) is not a phrase that has HQWHUHG PDLQVWUHDP UHVHDUFK \HW WKH :HERI Science [WOS]2 and Scopus3 bibliographies reveal no articles with this keyword and neither GRHV*RRJOH6FKRODU4 ). Marketing and retailing have advanced beyond making inferences about consumer decisions on the basis of their explicit or overt behaviour. Neuromarketing recognises that decisions are not PHUHO\DVHTXHQWLDOSURFHVVRIRSWLPDOO\IXO¿OOLQJ a need that many marketing theorists have advocated in the past, but that decision making has been superseded by the acknowledgement WKDWLQWULQVLFRUFRYHUWHPRWLRQDODQGFRJQLWLYH based forces play a role in the ultimate decision. These forces lend themselves to measurement using biometric tools. Much of the research in neuroscience can be termed ‘deep brain’ research which strives to understand how the brain functions at neural level (at the level of the central and peripheral nervous systems making up the brain and connecting it to the rest of the body – Banich and Compton [2011:5– 6]) and in accessing, processing, storing, recalling, sharing and using stimuli from the various senses and transforming this information into actions UHÀH[LYHDQGRUGHOLEHUDWHPRYHPHQWVDVZHOO as thoughts and decisions. This type of research LVTXLWHGLI¿FXOWWRGRDQGRIWHQUHTXLUHVWKHXVH of fMRI (functional magnetic resonance imaging) scanners which are very expensive and somewhat restrictive in their use. In other words, this sort of UHVHDUFKLVJHQHUDOO\FRQ¿QHGWRODERUDWRULHVDQG hospitals and is seldom used in everyday research of consumers and shoppers. Beyond deep brain research, there is shallow or surface brain research in which the electrical signals given off by the brain are recorded as brain waves by a special device. This device is called an HOHFWURHQFHSKDORJUDSK((*DQGLVPXFKPRUH usable for everyday research into brain activity compared with fMRI research. Shallow brain research is not the same as deep brain research. ,Q WKH ¿UVW LQVWDQFH ((* RQO\ WUDFNV WKH WLQ\ electrical signals given off by the brain across the surface of the brain and provides an approximate measure of the magnitude of brain activity at various points across the surface of the brain, while fMRI scans can ‘peer’ into the heart of the brain and determine with greater accuracy the extent RI DFWLYLW\ ZLWKLQ WKH EUDLQ 1HYHUWKHOHVV ((* measures are accurate enough to gain quite a bit of understanding of how the brain is dealing with VWLPXOLDQGKRZLWPDNHVGHFLVLRQV((*GHYLFHV are today being used increasingly in consumer and shopper research often in conjunction with other neurological or biometric measures. The other devices that are used together with ((* LQFOXGH H\H WUDFNLQJ (7 GHYLFHV ZKLFK indicate where an individual is focusing visually DQGZKDWDWWUDFWVKLPRUKHUWRDVSHFL¿FYLVXDO FXHHOHFWURGHUPDOUHVSRQVH('5GHYLFHVZKLFK measure skin conductance of minute electrical signals from the nervous system at skin level when the individual is aroused by external or internal stimuli; heart rate response (HRR) devices which indicate an increase in heart rate when individuals are stimulated by various external and internal cues, and facial expression reading devices which can interpret how individuals respond to external stimuli in terms of their facial expressions. Eye tracking is an often used device in contemporary retail research with new wireless devices that allow a research participant to wander around a shop and make purchases without much hindrance at all (the modern devices are extremely PRELOHOLJKWZHLJKWDQGXQREWUXVLYHDVZHOODV accurate). In shopper research it is possible to get very accurate responses to visual stimuli and to determine what is attracting a shopper in the context of the participant’s ‘mental screen’ of what he or she sees. It allows the researcher to answer questions such as: Are participants attracted to a 2 http://www.webofscience.com 3 http://www.scopus.com 4 http://scholar.google.com >ĞǀĞƌĂŐŝŶŐĐŽŵƉĞƟƟǀĞǀĂůƵĞĨƌŽŵŶĞƵƌŽŵĂƌŬĞƟŶŐƌĞƐĞĂƌĐŚŝŶƌĞƚĂŝůŝŶŐ dŚĞZĞƚĂŝůĂŶĚDĂƌŬĞƟŶŐZĞǀŝĞǁsŽůϭϮ/ƐƐƵĞϭ;ϮϬϭϲͿ 94 particular brand; does the positioning of products make a difference to the participant; do store DWPRVSKHULFV LQÀXHQFH WKH YLVXDO IRFXV RI WKH participant; how does the participant go through the process of shopping (i.e. is there a purpose in their movement through a store)? Eye tracking is not new and has been used in consumer and shopper research for many years. In fact, the other biometrics mentioned above have also often been used in shopper research in the past. However, currently four factors can be seen to enhance the value of neuroscience LQ VKRSSHU UHVHDUFK 7KH ¿UVW LV WKH IDFW WKDW the various biometric devices are being used in combination, rather than singularly, to track and understand a much greater range of responses IURPWKHLQGLYLGXDO:KLOHWKHEHQH¿WVRIXVLQJ various biometric measurements may appear obvious to some, actually bringing together and synchronising the data from various biometric GHYLFHVDWPLOOLVHFRQGLQWHUYDOVLVYHU\GLI¿FXOW In the past this required considerable human effort and technical expertise. Today software such as iMotions5 , QuadServer6 and Tobii Biometric Software Suite7 have made advances in dealing with this synchronisation task, making it possible for all levels of researchers to examine the data from various biometric devices at the very same instance in time. Consider the importance of NQRZLQJWKHH[DFW((*('5+55DQGRU(7GDWD for a given event concurrently, in milliseconds, otherwise it would be impossible to determine ZKDWQHXUDOUHVSRQVHLVEHLQJLQÀXHQFHGE\ZKDW event, and what the correlations are. 7KHVHFRQGIDFWRULQÀXHQFLQJQHXURPDUNHWLQJ research is the fact that all of the devices mentioned above are available today as wireless and mobile devices. This gives participants the freedom to move around and it also gives researchers the possibility to undertake research on the go – in stores and in malls – without being restricted to rigid laboratory conditions. At the same time, the sensitivity of these devices and the power of the recording and analysis software have made them more accurate and thus far more valuable in measuring and understanding individual feelings and thoughts, thus representing the third factor DOOXGHGWRDERYH7KHIRXUWKDQG¿QDOIDFWRUKDV to do with the advantage of biometric devices that the physiological responses they generate DUHRQO\PDUJLQDOO\LQÀXHQFHGE\WKHSDUWLFLSDQW in the research. The responses of participants WKHRUHWLFDOO\ UHWXUQ D PRUH DFFXUDWH UHÀHFWLRQ of what is being measured. This is in contrast to surveys and questionnaires that are commonly used to collect data in traditional marketing research, where the answers to questions may not DOZD\VEHDWUXHUHÀHFWLRQRIZKDWWKHUHVSRQGHQW actually feels or thinks. Neuromarketing is thus able to optimally utilise the new advances in hardware and software for measuring biometric data. As mentioned above, biometric measures can now be extricated from the laboratory environment and can be utilised LQ UHDOOLIH HQYLURQPHQWV 7KLV LV D ERRQ IRU marketers wanting to better understand shoppers’ needs and wants. Shopper decisions can be examined at an intrinsic level at the exact moment the event occurs as opposed to seeing the results of a decision and making inferences about how that decision was made based on a survey. Research using biometric measures has already been undertaken with some success. In DVWXG\E\*UDIIHR3RORQLRDQG%RQLQL H\HWUDFNLQJZDVXVHGWRFRQ¿UPWKDWERWKKLJKHU OHYHOVRIFRJQLWLYHUHÀHFWLRQDQGQXPHUDF\VNLOOV can predict a more involved decision process when it comes to making purchase decisions. Use of biometrics can also support the more traditional methods of marketing research. By using eye tracking to investigate whether a survey questionnaire is correctly understood, greater insight into the veracity of the answers supplied FDQEHREWDLQHG%LRPHWULFPHDVXUHVFDQFRQ¿UPD UHVSRQGHQW¶VVHOIUHSRUWHGUHDFWLRQVWRDVWLPXOXV Neuromarketing research can also be used to better understand consumers’ and shoppers’: • Choices driven by emotional and cognitive GHFLVLRQPDNLQJSURFHVVHV • Purchase intent 5 http://www.imotions.com 6 http://www.eyetracking.com/Software/Quad-Server 7 http://www.tobiipro.com/product-listing/biometric-software-suite 95 • Response to reward programmes • Interfaces with computers • Reactions to advertising • Perceptions to products and brands • View of packaging and design • ,QVWRUHDWPRVSKHULFV • Response to service interaction with retail staff Notwithstanding the value of these new technologies, the question arises as to whether they are being used as much in research as they could be? An analysis of the WOS bibliographic database using the keyword ‘neuromarketing’ reveals that only 13 articles8 were written about this topic in 2015 (with 11 articles in 2012, 8 articles in 2013 and 9 articles in 2014, representing a small growth over this period). The Scopus bibliographic database, in contrast, contains 22 articles written in 2015 with the keyword ’neuromarketing’ (with 19 articles in 2012, 17 articles in 2013 and 16 articles in 2014, representing a small growth over this period). The topics covered include amongst others, product shapes and design, reactions to prices, brand switching behaviour, understanding integrated content in television advertisements, preferences for organic foods, reactions to social networking, and the role of novelty and emotion. None of the results were focused on retailing per se. Even outside the WOS and Scopus, a search RQ *RRJOH IRU µQHXURPDUNHWLQJ¶ DQG µUHWDLOLQJ¶ combined with keywords representing the various biometric tools discussed above, reveals only 35 results. Of these results, the majority were the websites of neuromarketing companies, informational websites on this topic, broad studies looking at the potential of neuromarketing, or articles reviewing past studies on neuromarketing. It seems clear that, notwithstanding the apparent EHQH¿WVRIPHDVXULQJWKHHPRWLRQDODQGFRJQLWLYH behaviour of consumers and shoppers using multiple biometric measures, this type of neural research is still limited or is not being widely reported. This could be because companies may be doing private research which they do not report on for competitive reasons or possibly because neuromarketing has only recently become more accessible to the marketing researcher as an additional tool in their research arsenal. *LYHQ WKH DSSDUHQW GHDUWK RI UHVHDUFK LQWR the emotional and cognitive decision making RI FRQVXPHUV DQG VKRSSHUV DQG WKH EHQH¿WV of neuromarketing research as posited above, researchers are encouraged to consider looking LQWRWKLV¿HOG/HH%URGHULFNDQG&KDPEHUODLQ (2006) proposed an agenda for future research into neuromarketing areas such as consumer trust in brands, consumer processing of price information, understanding what elements of advertising are critical to the awareness of, attitude towards and evaluation of products, examining ethical issues in marketing, and understanding what makes great sales people ‘tick’. Beyond these suggestions, the opportunities for research are immense and WKHEHQH¿WVIRUFRPSDQLHVHTXDOO\FRQVLGHUDEOH After all, a deeper and better understanding of the needs and wants of consumers will make it easier to develop better and more relevant marketing DQGUHWDLOLQJVROXWLRQVWKDWZLOOSURYLGH¿UPVZLWK greater competitive advantage. References Banich, M.T. and Compton, R.J. 2011. Cognitive neuroscience. 3rd ed. Wadsworth Cengage Learning, pp. 5–6. Brosekhan, A.A., and Velayutham, C.M. 2008. Consumer buying behaviour – A literature review. IOSR Journal of Business and Management, SS>2QOLQH@$YDLODEOHDW KWWS ZZZLRVUMRXUQDOVRUJLRVUMEPSDSHUVQFLESSWH YROXPHSGI$FFHVVHG-XQH &DLFHGR'%HX]HNRP09DQ+RZGR you feel? An assessment of existing tools for the measurement of emotions and their application LQFRQVXPHUSURGXFWUHVHDUFK'HOIW8QLYHUVLW\ RI7HFKQRORJ\'HSDUWPHQWRI,QGXVWULDO'HVLJQ >2QOLQH@$YDLODEOHDWKWWSVFKRODUJRRJOHFRPU" KO HQEWQ* 6HDUFKT LQWLWOH³+RZGR\RX +feel?”+An+assessment+of+existing+tools+fo r+the+measurement+of+emotions+and+their+a SSOLFDWLRQLQFRQVXPHUSURGXFWVUHVHDUFK 8 These are articles where the keyword appears in the abstract or title of the article. >ĞǀĞƌĂŐŝŶŐĐŽŵƉĞƟƟǀĞǀĂůƵĞĨƌŽŵŶĞƵƌŽŵĂƌŬĞƟŶŐƌĞƐĞĂƌĐŚŝŶƌĞƚĂŝůŝŶŐ dŚĞZĞƚĂŝůĂŶĚDĂƌŬĞƟŶŐZĞǀŝĞǁsŽůϭϮ/ƐƐƵĞϭ;ϮϬϭϲͿ 96 Accessed ûRVLü'1HXURPDUNHWLQJLQPDUNHWUHVHDUFK ,QWHUGLVFLSOLQDU\'HVFULSWLRQRI&RPSOH[6\VWHPV SS 'UXFNHU3)7KH3UDFWLFHRI0DQDJHPHQW New York, Harper & Row. )LVKHU&(&KLQ/DQG.OLW]PDQ5'H¿QLQJ neuromarketing: Practices and professional challenges. Harvard Review of Psychiatry, 18(4), pp. 230–237. *UDIIHR 0 3RORQLR/ %RQLQL1 Individual differences in competent consumer FKRLFHWKHUROHRI FRJQLWLYH UHÀHFWLRQDQG numeracy skills. Frontiers in psychology, 6, p. 844. .LWVRQ+'8QGHUVWDQGLQJWKHFRQVXPHU¶V mind. Annals of the American Academy of Political and Social Science, 110, 131–138. Kotler, P. 1967. Marketing Management: Analysis, 3ODQQLQJDQG&RQWURO6DGGOH5LYHU3UHQWLFH+DOO Kotler, P. 2000. Marketing Management Millenium (GLWLRQ8SSHU6DGGOH5LYHU3UHQWLFH+DOO Kumar, S. 2015. Neuromarketing: The new science of advertising. Universal Journal of Management, 3(12), pp. 524–531. /DPELQ--&KDQJLQJ0DUNHW5HODWLRQVKLSV in the Internet Age, Presses universitaires de /RXYDLQ/RXYDLQ/D1HXYHSS Lee, N., Broderick, A.J. & Chamberlain, L., 2007. What is “neuromarketing”? A discussion and agenda for future research. International Journal of Psychophysiology, 63(2), pp. 199–204. 0DUWLQH]37KHFRQVXPHUPLQG%UDQG perception and the implication for marketers. London, Kogan Page. McKitterick, J.B., 1957. ‘What Is the Marketing Management Concept?, in: Frank M. Bass (ed.), The Frontiers of Marketing Thought and Science, Chicago, American Marketing Association, pp. 71–82. Nick Lee, N., Broderick, A.M. and Chamberlain, L. 2006. What is ‘neuromarketing’? A discussion and agenda for future research. International Journal of Psychophysiology, 63 (2007), pp. 199–204. Nordqvist, C. 2014. What is neuroscience? Medical 1HZV7RGD\017>2QOLQH@$YDLODEOHDWKWWS ZZZPHGLFDOQHZVWRGD\FRPDUWLFOHV php. Accessed on 15 June 2016. Rebecca, S. and Belden, A. 2011. Science is culture: Neuroeconomics and neuromarketing: Practical applications and ethical concerns. Journal of Mind Theory, 0(2), pp. 249–259. The Economist (2004), “Inside of the mind of the consumer”, The Economist, 371(8379), 12.