Getting the Most Out of Every Shopper

Based on what we recently discussed in class regarding the science of shopping this article gives some concrete examples of how the right in-store displays can persuade to buy and stresses the importance of marketing in the retail business.

Paco Underhill:

Is one of the first to study how people shop, has been running his own consulting firm, Envirosell, for over20 years. Considered as a retail marketing guru he gathers information for clients by videotaping and tracking shoppers in store over several weeks in time. His clientele already includes big names as Wal-Mart, Best-Buy or Gap and his recent findings are the following:

The newly frugal American:

American shoppers are generally complex, i.e. they are excitable but often creatures of habit, sensitive to influence but harder to manipulate and now they tend to consume more sparingly.

Furthermore he also noticed that people more often make decisions about what to buy when they are out shopping, not before.

Also in better times, when people selected items from the shelf, they usually purchased. Today the average amount of time shoppers spend in the aisles is increasing, by around 20% which can be explained by more careful reading of labels. Generally this might be a positive sign for retailers but at the same time customers tend to more frequently discard items in other parts of the store, particularly near the cash register.

Another interesting aspect is that stores also must get better in persuading existing customers to purchase more.

Examples:

With all this in mind he gives some concrete examples how stores can do a better job through the right in-store displays based on recent observations in Manhattan’s Time Warner Center:

· Organic Food: Explanation is necessary, shouldn’t be too long but at the same time has to transmit that shoppers are buying something valuable. As these products are often more expensive it can also be tried to find creative ways of getting a customer to trade up. Example: “How cute are these”-sign for special potatoes.

· “Woman by the meat counter”: about 60 % of the time she spent there is after giving order. While she is waiting they can give her a lesson on what she could spend her money on next time. When something is written on a blackboard though it doesn’t have the same impact as on a display case glass. Why? Because writing on the glass suggests it’s new! It might be there 24/7 but it looks like someone might have written it 10 minutes ago.

· Pepper mills + sign about grinding fresh paper: Signs are important as the educate the shopper and often justify the price but generally the shouldn’t be longer than a 15 seconds read, which means about 30 words. In this particular case this one had 100 words and they could have than better again.

Basic Guidelines:

There are also some useful “Paco Underhill’s Retail Guidelines mentioned:

1. Shoppers use the area just inside a store’s entrance as a decompression zone. They won’t notice signs put there.

2. Americans naturally turn right as they walk further into a store.

3. Customers respond best when employees great them about a minute after they enter.

Conclusion + Thoughts:

This article may only present some primitive examples of what stores could improve through a minimum of changes and by minor effort. Still it shows once again that many retailers perform pretty much under their potential as they don’t take into account or simply don’t possess the knowledge how negative the impact as a whole can be. Marketing in retailing is often neglected and instead financial metrics seem to be the highest priority. But in order to be successful it is necessary to really understand your customer and investing time and money in professional market research and hiring marketing experts in general should not come to short therefore.

I think we leave in a society which is pretty easy to influence anyway and by knowing certain tools and applying them correctly retailers can certainly lift their performance.

References:

· Business Week, February 9^th , 2009 ; p. 45/46

· www.businessweek.com/go/09/shop → Report about Underhill’s videotape analysis