Kimberly-Clark Corp.: Shopping for Virtual Products in Virtual Stores

Intro

When it comes to virtual reality technology, we tend to think of movie classic such as The Matrix Trilogy, Tron Legacy, Virtuosity, etc. Virtual technology is also synonymous with games such as Second Life or Sims. This technology has become more prevalent in healthcare, aerospace and automotive industry. One wouldn’t initially associate virtual reality technology with the consumer goods world; however that’s until the Kimberly-Clark Corp created a virtual reality tool that’s slowly taking the retail market by storm. Kimberly-Clark has created a virtual reality Innovation Design Studio with hopes of gaining a better understanding of consumer behavior and allow for the testing process of new products to become faster and more efficient. Essentially this tool allows them the ability to create a virtual reality of any given retail store, such as Walmart, or Target, in which they can test how well products do and how consumers behave. This can provide retailers an idea of optimum use of product placement and advertising displays as well. This also allows retailers to virtually design their store space before it’s actually unveiled to the public, and their competitors. So this tool provides a sense of discretion on what potential ideas are before the competition is aware. The potential of virtual reality technology is just scratching the surface and can only trickle down into the other business sectors as it becomes more popular.

Benefits to Business

“What are the business benefits derived from the technology implementation described in this case?  Also discuss benefits other than those explicitly mentioned in the case.”

There are several business benefits taken from this technology, but the most significant just happens to be the one that could save and potentially make Kimberly-Clark a lot of money.  Kimberly-Clark took sensors “embedded in the walls, ceiling, and floor to detect a person’s movements, track their location and even what a person is exactly looking at.”  They then feed this information into eight Hewlett Packard high-end rack-mount PC’s to provide a virtual reality like one has seen in this industry before.

Sure everyone has seen a flavor of virtual reality, but Kimberly-Clark has taken that world and applied it to theirs.  Having customers go through a “virtual store” and track their eye movement and their reaction to product placement and advertising, did not only save them money, but was revolutionary.  Traditional product testing typically took “8 months – 2 years”, Kimberly-Clark estimates this “virtual store” has cut product development at least in half.  This is a perfect example of how when you think “outside the box” or against traditional thinking, technology can really amaze you.

And the innovations in virtual reality haven’t stopped there.  As you can tell from the pictures,

Virtual reality has made advances in medical procedures, education and has even helped individuals who suffer from vertigo and other balance related difficulties.

What About Virtual Stores

“Are virtual stores like this one just an incremental innovation on the way marketing tests new product designs? Or do they have the potential to radically reinvent the way these companies work? Explain your reasons.”

Virtual stores have the potential to radically reinvent ways companies operate because the technology used helps to point out any flaws in a company’s current system.  With this technology testing new products are now much more effective and more efficient in regards to time and cost. The arrangement of products can increase foot traffic in stores, as stated in the case study, which in turn generates more sales. These virtual stores could also help companies better market their products in geographically and culturally different areas.  If Kimberly-Clark were willing to reduce the cost of using their product to be affordable for smaller businesses then the owners could also benefit from this technology.  It would provide small businesses with the same advantages that major chains with financial positioning have when using virtual stores to test their products.

This article recounting a small business owner’s struggle is a perfect example of how virtual shopping technologies can help small businesses. Basically the business owner states that they almost threw in the towel because costs were too high, mainly security costs for credit cards and other sensitive information. Overstock.com is a website that relieves some of the stress off of small business owners while taking a certain percentage of the revenue by allowing them to sell their products through their site. Basically what is being applied here for many small businesses that deal with Overstock.com is Coase’s Transaction Cost Theorem which states that a bargaining will lead to an efficient outcome regardless of property rights if there are no transaction costs and an external trade is a possibility.

Other Industries that Benefit

“What other industries could benefit from deployments of virtual reality like the one discussed in the case? What new products or services could you see within those industries?”

Kimberly-Clark used virtual reality to test market their products and work with retailers to get better positioning and penetration in retail stores.  This technology, virtual reality, has uses in almost any industry that we can think of in the future. Wherever there are interactions in society, virtual reality could be utilized to model and observe the interactions. There are many industries that could use this information including, but not limited to entertainment, military, automotive, and housing.

The entertainment industry is always looking to get viewers closer to the action. With virtual reality one could literally be in the movie instead of watching with 3D glasses we would be an avatar and the movie would be happening all around. Individuals could choose which character they want to be and act out the movie even. The gaming industry would love to get players inside games using their motor skills instead of a remote to move around in the virtual gaming world.

Militarily, we could have soldiers training in a virtual world to test improve skills and provide immediate feedback. The training program could be like that in the Matrix where we could stop, instruct, and continue training. This technology could shorten training times and help get soldiers ready for battle sooner. We could also model the exact location that they will be going into, right down to the buildings and people they will be encountering. There is nothing like the experience of already being there before in training.

In the automotive world dealerships have such high inventory costs and it is expensive to have sales people selling cars as well. This is part of the reason dealerships have moved to internet sales in recent years. Imagine a virtual reality that would allow a potential buyer to move around a vehicle inside and out and even test drive the car in a virtual world.  After which they could simply order the car to be delivered to their house from the factory floor.  

The housing and hotel industry could set up properties in a virtual world to view the homes of interest all in the same location. This would eliminate all the driving around to different locations and spending days searching for properties. This could potentially be set up in Second Life and shown there.

Second life, is an interesting world in and of itself because people make virtual products and sell them for real money.  Virtual reality offers a way to communicate across channels to suppliers, customers, and other business partners. The virtual environment is something that allows companies to pitch products and services from almost any business line or idea and either test it out or present it to clients. Allowing presenters and viewers to all be in different locations cutting down on travel expenses and easier scheduling.

Cisco Systems: Telepresence and the Future of Collaboration

Cisco and Web 2.0

Have you ever wondered what it would be like to work from home and feel like you we’re at the office? How about having that board meeting without getting on a plane to meet face-to-face? At Cisco, that is exactly what they have been doing for some time. What started as a way to telecommute is turning into a way to feel like that colleague is still in the next office. They are using video and telecommunication technology to create the look and feel that person is right there with you. If the old adage holds true that ‘time is money’, then this is a giant step for the business world because companies will be saving both.

Cisco began in 1984, founded by a group of computer science majors. The first push at the firm was to get businesses connected to one another. Next, Cisco looked for information technology to drive productivity gains. Now they are looking to transform the business with TelePresence, a video conferencing system that uses three screens, surround sound, and HD video. This push is being driven by the CIO Rebecca Jacoby, who envisions this being used in the future of doing business. Also, using wiki, video blogs (vlogs), IM, and other collaborative efforts the company has changed the way they do things and created a more free flow of ideas.

Furthermore, Cisco has realized the benefits of a collaborative workplace and the flow of ideas from the bottom up as well as top down. This collaboration technology has led to multibillion dollar projects being undertaken resulting from this new way of communicating vision and ideas. We will investigate and analyze this technological change and its implications for businesses. This will include a discussion on the benefits to business and the economy, as well as the specific savings it creates. Cisco is focusing their work on a proprietary technology and we will evaluate that decision with comparisons to similar business decisions. Lastly, an analysis of the Cisco created ‘I-Zone wiki’ to examine how the generation and sharing of ideas through the technology is helping Cisco’s business.

Collaboration Technologies and its Benefits

“What are the main business benefits of the collaboration technologies described in the case? How do these go beyond saving on corporate travel? Provide several specific examples.”

There are many business benefits of using the collaboration technologies mentioned in this case study. One of the obvious benefits is that the cost of doing business decreases. A good example the case provides is how the executive assistant, Margaret Hooshmand, is able work at two places at once by using telepresence to do her job. Using this type of technology saves the company the cost of hiring another employee and freeing up the funds so they can be used elsewhere. This is a pretty creative use of the technology and depending on how frequently it is used in this regard would probably increase Cisco’s revenue stream (O’Brien, Marakas).

The use of video blogs and other video communication technologies such as telepresence and video conferencing within a company can be of major importance in international companies because people from various locations can be within the same development/project team. Video blogs are useful to the employees of a business because the video can be saved and uploaded onto the company’s intranet so it can then be easily accessed at a later time. Collaboration technologies have allowed us to not only overcome geographical distances, but time constraints. Instant messengers are used all the time within the business environment for co-workers to communicate with each other. I use instant messenger at work regularly for short questions and answers or if my manager needs to be made aware of any defects that need to be solved.

Another benefit of using Web 2.0 technology such as wikis, blogs, and various instant communication applications is that it provides a medium for new or existing ideas to be submitted, reviewed, and supported. Collaboration technologies allows for greater interactivity and decision making regardless of the differences in location between participants. This method can be both effective and efficient allowing for increased productivity in the research and development phase of creating and supporting products. Also mentioned in this case study is that collaboration technologies provide business benefits by the frequent use and in-house testing of collaborative products that allow Cisco, or any other company, to refine, innovate, and create new and better products (O’Brien, Marakas).

Cisco’s Strategy

“Michelle Damrow of Polycom notes Cisco is betting on a proprietary standard for its TelePresence product, while competitors are going with interoperability. Do you agree with Cisco’s strategy? Why or why not? Defend your answer.”

I agree with Cisco’s strategy for betting on a proprietary standard for its Telepresence product for several reasons. Cisco is one of the most recognizable and reputable companies in developing enterprise networking equipment. Their business model and operating strategy has always been based on leveraging proprietary products for customers that’s become the standard in the market. A proprietary strategy also allows Cisco to maintain control over their products in terms of its functionality and compatibility. Since most enterprises already utilize Cisco networking products it would be ideal for them to use Cisco’s Telepresence product to ensure it functions from a compatibility perspective. The proprietary strategy ultimately would have a huge impact on the amount of revenue that Telepresence could add to the company. As video conferencing becomes more of the norm in terms of how companies collaborate and communicate, Cisco Telepresence will only grow with the demand. In conclusion, the proprietary standard of Telepresence will be beneficial in numerous ways. It allows Cisco to maintain their business model and standards, it allows for control of the product, and it will become a huge revenue booster as the demand grows.

The I-Zone

“Think about the I-Zone wiki described in the case, Cisco’s forum for new business ideas, and its seeming success in that regard. Why do you think that is the case? Do these technologies foster creativity, provide an opportunity to communicate already existing ideas, or both? Defend your answer.”

The I-Zone wiki has really taken off for Cisco mainly because Cisco believed in it from the top down. Everyone from the CIO down was using and promoting the use of I-Zone. They quickly realized that “to lead the next phase of the Internet” they must reinvent themselves, and what better resource to achieve this goal then employees. They know the product, the market and hopefully want the best for the company. I think with upper management support these technologies (wiki’s, vlogs (Video Blogs), etc…) can be very beneficial and be a hot bed for creativity and not for just technology industries.

We already know that Cisco, IBM, Microsoft, etc… use these technologies and they flourish. But these also can also provide a great deal for non-technology centered industries (finance, etc…). If given the proper support from upper management they cannot just thrive they can really help bring ideas to the next level. I have experience where these technologies have both flourished and have fallen by the way side and one of the main contributing factors was upper management support and implementation.

Just as these technologies thrived in Cisco, their CIO and her direct reports had to live, breath and implement this new technology and everyone else will follow.

Moreover, the telepresence and collaborative technologies pioneered by Cisco are in their grassroots phase with large potential impacts on the future of business. There are myriad benefits to business in utilizing these new technologies including significant cost reduction, increased speed of doing business, and fostering new and innovative ideas. In our increasingly global world separated by significant distances this new technology presents significant cost savings. Cisco, with their market share and leadership, is well positioned to implement their proprietary platform allowing them to control the technology and create barriers to entry into the telepresence market. As for the collaborative environment that Cisco has fostered from a top down approach: Cisco has created a medium that has been utilized to prove that great ideas can come from any level of the organization. The future is bright for telepresence and collaboration technologies. We look forward to the business of the future.

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Works Cited

[1] O’Brien, James A., and George M. Marakas. Management Information Systems. Boston: McGraw-Hill Irwin, 2010. 302-03. Print.

Applebee’s, Travelocity, and Others: Data Mining for Business Decisions

Overview of Case Study 4

Data mining is an important tool that companies use to find and resolve issues. The case study we’re covering describes how companies Applebee’s, Travelocity, and VistaPrint analyze data and leverage data mining tools in order to help improve their business processes.

Applebee’s use data mining technology not only to purchase supplies, but also to make better decisions on which products to advertise. Travelocity, an online travel site, uses text analytics software by Attensity that extracts important unstructured information from emails, surveys, and call centers that would have took hours or days any other way. Not only does the tool help employees improve customer service, but it allows the unstructured data to be linked with the structured data of Travelocity’s Teradata data warehouse to track trends and forecast events.  VistaPrint is an online retailer that uses data mining to find issues regarding customer registration on their website.  Using a data mining tool called Visual Site to track the process, narrow it down to a specific place, and finally resolve the issue they found the data mining tool helped the company improve new member registration (O’Brien, Marakas).

A good example of a company that uses data mining and the information provided by the analysis is FaceBook.  Data is collected about the user’s friends, likes, comments, etc. In order for these companies to stay competitive they had to change their strategy – they had to learn from their mistakes and from their competitors.  These companies made use of Argyris and Schon’s Organization Learning Model and De Gues’ Law of Learning.

Question 1

What are the business benefits of taking the time and effort required to create and operate data warehouses such as those described in the case? Do you see any disadvantages? Is there any reason that all companies shouldn’t use data warehousing technology?

Answer 1

The business benefits of taking the time and effort to create and operate data warehouses as described in the case was remarkably beneficial. Given there’s a plethora of data just simply sitting in data warehouses not being used provided an opportunity for information technology to be incorporated in order help make improvements to the overall business of the company and its’ bottom line. What makes the implementation of technological tools essential to effectively capture this untapped data is the primary source which is the customers or potential customers themselves. According to the Data-Information-Knowledge-Wisdom (DIKW) Model, this unstructured data can be converted to data that is structural, functional, and beneficial to the overall business. With careful planning, sophisticated technology implementations, and analyses this untapped data has now leveraged companies to make important and real time business decisions based on their different perspectives. From the case, the use of the data varied on the business needs of the company.  For example, Applebee’s utilized the data to make improvements to their procurement and overall customer service, and Travelocity and VistaPrint used customer driven data to make real time improvements to the site.  

With anything there’s an advantage and disadvantage. In regards to the utilization of data warehouses, a potential disadvantage could be the cost effectiveness of resources required to effectively capture the unstructured data. Another possible disadvantage is not seeing an actual return on the investment. At a certain point companies should be able to tell whether or not this data has been useful and beneficial to the overall bottom line of the business.

Personally I don’t believe there’s a single valid reason a company shouldn’t use data warehousing technology. Information is power, and any piece of information that can be leveraged to gain a leg up over the competition is invaluable. This technology now allow companies to make real time, minute by minute decisions, in order to keep up in the super fast paced business world we now live in.

Question 2

Applebee’s noted some of the unexpected insights obtained from analyzing data about “back-of-house” performance. Using your knowledge of how a restaurant works, what other interesting questions would you suggest to the company? Provide several specific examples.

Answer 2

The restaurant business collects a tremendous amount of data enabling better decisions for the business. How are restaurants using the data they have available to driver better results?  There are many questions that I would suggest a restaurant would want to know surrounding, customer profiles, forecasting, client relationship management, menu engineering, and worker productivity. A restaurant depends on proper forecasting to determine the appropriate levels of food, employees, and supplies. How does the restaurant make those important decisions? At most restaurants today you get a buzzer if there is a wait to know when your table is ready. This along with number of tables and nightly revenue enables the restaurant to determine peak demand and wait times and staff accordingly.

    At Applebee’s, they were backing out the cooking time from the time it took from order to payment to see how long the server is spending with a table. What other information could be derived from the order entry system? They would know what foods are ordered together and what up sells the table ordered. The servers could be trained that when quesadilla is ordered then the client might also like a Corona. The menu may even have a picture of a Corona by the quesadilla if they found that type of relationship in the data to encourage the up sell. I would want to know who my best servers were. The data that is obtained from the order entry system would record everything about the server’s tables to inform management about the performance of their employees. This data would help management provide feedback and performance evaluations to its employees. What delights customers and keeps them coming back to the restaurant? This information can be obtained through online customer surveys from a link printed on the bottom of the receipt.

Restaurants today are very technologically driven with buzzers, point of sale machines, and online surveys. They are able to track anything and everything to run statistical analysis looking for relationships and interesting trends that management can use to more effectively and efficiently run the business and drive profits.  

Question 3

Does data mining and developing a data warehouse stifle innovative thinking, causing companies to become too constrained by the data they are already collecting to think about unexplored opportunities?

Answer 3

I couldn’t disagree more.  But I managed a data warehouse for several years, so I have intimate knowledge of the tremendous future benefits that looking at the past can provide.  Also, industries in general are extremely cyclical and if you can learn from your past you will be that much more prepared for the future.  I can understand how people might think that data mining and data warehousing has you focusing on what has occurred and not spending your capital on something that will provide future gains.  But I think that is exactly what you are doing when you invest in data mining and a data warehouse.  You are picking apart the past to find out what worked, what didn’t and what markets you never penetrated.

For example, in the case study VistaPrint created a new four page upload process that they felt should greatly improve the company’s conversion rate in customers completing the process and not losing them during the process.  But during the testing phases the results were the same and it wasn’t until they looked at the data per each page during the upload did they find that the fourth page was causing the majority or drops.  So they modified that page and the new process yielded the results that were originally expected, but those results most likely wouldn’t have been realized if they didn’t mine though all the test data.

Conclusion

Data mining and data warehousing, as stated in class, really is the “next” logical step in using technology to bring your business to the next level.  We have come from just gathering data and processing data, to now understanding the data and figuring out what “we” as a company should do next.  What is the “next” big innovation?

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Works Cited

[1] O’Brien, James A., and George M. Marakas. Management Information Systems. Boston: McGraw-Hill Irwin, 2010. 215-16. Print.