Thursday, November 8, 2012

Why We Buy By Underhill

I recently had the opportunity to read retail consultant Paco Underhill's Why We Buy and I'm smarter for it. The title is misleading, however; it's not so much about "why we buy" as it is about "how we should sell". Underhill shares a number of in-store methods retailers aren't using (but that he has proven successful for his clients) but should.

The author and his associates spend much of their days in their clients' stores measuring what works and what doesn't. They count customers, determine the most crowded parts of the store, monitor customer behaviour, and measure responses to various initiatives.

This has led them to a number of conclusions. Some are obvious. For example, if customers have to wait in line to pay for more than 3 minutes, sales fall. But others are more subtle, yet equally important. For example, when shoppers enter a store it is often with a purpose. As a result, promotions and signage at the entrance is not likely to be noticed. When shoppers leave a store, on the other hand, they are relaxed (as they are no longer fixated on their initial task) and are therefore more susceptible to marketing. Moving marketing material from the entrance to the exit has a significant effect on sales, according to Underhill.

One qualm I had is that the author didn't appear to distinguish between cause and effect in a number of his measurements. For example, he notes through observation that customers who talk to sales representatives spend more. He then discusses techniques to increase employee contact with customers. But the direction of causation is probably worth exploring further, as it is plausible that customers intending to spend a bunch seek answers/help/opinions before taking the plunge.

Of course, with this type of book you are also bound to feel like the author is selling you on his services. A major motivation for this book is no doubt to market the author's retail consultancy to new clients. But if you understand that - and can get past it - you will enjoy the book for what it reveals about how retailers prey on you in store, and how they can do even better! I found the book very intriguing and would want all managers of the retailers I own to give it a read.

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