A Retail Holy Grail?

Posted on Jan 1, 2010 :: Small Business Spotlight
Sharon Verbeten
Posted by , Insight on Business Staff Writer

George Kotalik, Power POD Systems

Can there possibly be a crystal ball that could predict and respond to what consumers want, immediately when they want it? A magic wand, of sorts, that would eliminate the “wandering hand” of consumers and instead lead it right to a specific product?

Appleton entrepreneur and career ad man George Kotalik believes there is such a retail holy grail – an innovation he and his team of backers call Power POD Systems.™

“This is a new science,” exclaims Kotalik, who, along with about seven partners, are eager to roll out a Power POD pilot program. “We’re all kind of waiting for the thing to take off.”

But amid a desire to blast the Power POD concept into retail and other heavily-traveled consumer environments, Kotalik remains guarded – almost James Bondian – about the secret behind the PODs.

“This is black ops,” hushes Kotalik. “People want to steal this [idea]. We don’t want to let the cat out of the bag.”

POD PSYCHOLOGY
Advertising and marketing flow deeply in Kotalik’s veins – he claims to have sold his first ads when he was 16. His resume is peppered with a “who’s who” of Fortune 500 companies as clients. In his storied career, he has created trade names, ad campaigns and marketing strategies for, among others, McDonald’s, Kraft Global, Purina, Levi’s and Anheuser-Busch. (Among his most notable successes? The Snapple brand and the launch of Kraft salad dressings).

The Chicago native and his family relocated to Appleton to be nearer to his wife’s relatives, but his location in Northeast Wisconsin hasn’t hampered his broad scope with the Power POD concept. “Digital technology and the Internet have demonstrated that new global companies can spring up and succeed anywhere,” he says.

But all his decades of advertising and marketing research seem to have paved the way for development of his “brainchild” Power POD Systems.™

He said the impetus for this “new paradigm of marketing” actually germinated decades ago after speaking with several CEOs of Fortune 500 firms he had worked for.

“We were spending millions of dollars on research to target the marketing [for various brands],” says Kotalik. “The problem with the research is there was always a time lag.” By the time market research could be gathered and interpreted and advertising implemented, the demographics or the needs and wants of the consumer, may have changed.

Nothing existed to reach consumers at the most critical point –the point of decision (POD) or point of purchase.

That disconnect gnawed at Kotalik. In the 1980s, he began questioning this time lag, but the technology did not exist at the time to address it.

“What I was looking for to drive the market, to better know the people, was micropsychology,” he says. “Power POD is the electron microscope of psychology.”

Power POD, the concept, has been stewing inside Kotalik’s head for years, but it took about six years of research and development – and about $250,000 of his own money – to create and develop the concept, unit and software.

The POD hardware, about the size of a clock radio, can be installed just about anywhere – on a grocery store shelf, camouflaged in a store display, in an airport terminal, at a convention center or mall.

“We are genetically altering these ‘inert, passive’ environments into living, breathing, interactive environments,” says Kotalik.

The PODs, he says, will download “subliminal motivators” and other interactivity information, such as how long a person lingers in an aisle or how long they touch a package. One Power POD can record 20 million events.

“Our system does multiple things,” Kotalik says. “We are inviting the consumer to interact, [but] it’s not just about pushing buttons. It times [consumers] and senses them and tracks them.”

Software can be customized for each client, and it can also look at other environmental data, such as how a massive snowstorm impacted traffic in the Piggly Wiggly aisles.

Those metrics are transferred in real time – decreasing that lag time Kotalik addressed long ago. The data can then be reviewed and used by companies to alter their products or services to give the consumer exactly what they want.

“This real-time consumer interactivity and information gathering will become the gold standard,” says Mark Stammer, manager of engineering and technological innovation for Power POD Systems.™

“Up to now, the traditional way to gain consumer data has been to collect it in ‘captive’ settings, in environments that are insulated from real-world stimuli. With Power POD, the world becomes the laboratory. The information can be sifted and correlated and presented to a CEO’s computer within hours of being collected.”

But, Kotalik stresses, “It’s not just acquiring the situational data. It’s how you interpret it.”

TOP SECRET SCIENCE
Short of saying the Power POD doesn’t record any information that would infringe on a person’s privacy, Kotalik wouldn’t elaborate on how Power PODs gather that data.

As engineers worked on the design of the Power POD software and hardware, Kotalik has been pitching his new technology (under a cloak of confidentiality agreements) to some of the nation’s upper echelon companies. They include Sears, McDonald’s, Kraft, Burger King, Hallmark, Nike and J.C. Penney.

His documented feedback has been positive. In a letter to Kotalik, a former vice president of marketing for Gerber Products wrote, “I believe that from your description, you have the 21st-century device that would be utilized by many manufacturers at point of sale.”

Still, Power POD has yet to see a formal launch. “We need a significant pilot program,” he says.

Part of the pushback, Kotalik says, has been trying to gain buy-in from companies without releasing too much proprietary information about the Power POD. “It’s a Catch-22.”

To get clients to see the Power POD’s potential, Kotalik is taking a page from the playbooks of major companies that have promoted innovations the public didn’t get at first. “I use their logic,” Kotalik says. “How did Henry Ford explain the assembly line to his backers?”

Stammer adds, “The hurdle in launching Power POD Systems™ is common to the launch of any new science or technology. Those who could most benefit by innovation do not easily envision its potential.”

Ultimately for Power POD to win over companies, it has to prove beneficial and cost-effective, and, Kotalik says, “It has to be a ‘win-win,’ for companies as well as consumers.

“Obviously, the manufacturers and retailers gain valuable information,” he says. Beyond that, however, while companies can better cater to consumers, the metrics work both ways, allowing consumers to change the face of what manufacturers are offering. That’s not only eliminating a time lag, that’s true interactive marketing.

“We can alter the shape of products,” Kotalik says. “What I want to happen is the companies are going to give us better deals, and [consumers] will be voting with our checkbooks.”