why we buy- book review

13
BOOK REVIEW ON J Reviewed by: TANISHA MEHROTRA 164

Upload: tanisha-mehrotra

Post on 08-Jan-2017

84 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: why we buy- Book review

BOOK REVIEW

ON

J

Reviewed by:

TANISHA MEHROTRA

164

Page 2: why we buy- Book review

Tanisha Mehrotra

―It is not the most intellectual or the strongest of species that

survives; but the species that survives is the one that is able to

adapt to and adjust best to the changing environment in which

it finds itself.”

Charles Darwin

It is not the strongest retailer that will survive; the one that

survives will be the able to adapt and adjust best to the changing

consumer preferences and retail environment

Paco Underhill in his book ‗Why We Buy‘, Talks elaborately

about the factors that affect consumer‘s behavior when they

enter a retail store for purchase. Identification of these behaviors

can help retailers strategize their offering better to succeed in

their endeavors.

I, through this book review, intend to highlight these factors

mentioned in the book by Paco Underhill and offer my

understanding from the reading. I have also given my thoughts

on the applications of the concepts proposed in the book to seek

relevance in the context of ‗The online world‘.

I have given important highlights of each chapter/section of the

book and further reviewed them by dividing the page into two-

the left side is used to for making notes from the book and the

right side to offer my interpretation.

Page 3: why we buy- Book review

Tanisha Mehrotra

A science is born

The book begins from the eyes of a tracker,

‗another day in the vineyards of science‘-

almost noting every movement the lady

shopper makes and every action she does.

Author addresses a fundamental question-

―Since when does such a scholarly discipline

even exist?‖ – Beyond anthropology studies

that fail to capture the minute details of

shoppers movements and ‗every nook and

cranny from the farthest reach‘ inside a

store- ‗The Science of Shopping‘ is Born;

research into the habits of a modern shopper.

Important tools that aid the study of this

science- Tracker (that records several

shoppers‘ behavior, nearly 40), tracking

sheet where enormous amount of

information is crammed (excel to SPSS).

Some in-store fundas: Discovery of the

‗butt-brush effect‘- understanding why a

rack placed near the entrance is an

underperformer; Key paths or ‗doorways‘ to

be identified in a store for better

merchandising; display and their positioning

is integral

Important Highlights

Chapter one gives us a fair idea as to

what the book is about. It also helps us

understand what science of shopping

entails and customer centric approach to

designing a retail store is integral.

Though the book is much about the

modern in-store shopper, the idea of

tracking customers‘ movements is the

first step towards better offering, stands

true for much hyped online retailing as

well.

The advent of web crawlers and studying

data on browser‘s each click has become

a mandate to display what is relevant to

the customers and designing the offering

better that gets maximum traffic to an e-

retail store.

Thoughts

Page 4: why we buy- Book review

Tanisha Mehrotra

What Retailers and

Marketers Don’t Know

This part of the book talks about Science of

shopping from the eyes of a practitioner- the

retailer and the marketer who absorb the lessons

imparted and implement the learning in the stores

Concept of Conversion rate- Shoppers converted

into buyers/customers must be the focus of

retailers. Though it varies across outlets- a

supermarket may have a 100% conversion rate

whereas a high end jewelry shop may have a 1%

conversion rate.

Conversion rate is a measure of ‗what you make

of what you have’.

According to Paco Underhill- There is a direct

relationship between the amount of time a

shopper spends in a store and how much she/he

will buy. He talks about the ―arena concept‖ a

change implemented by Staple superstores on his

team‘s suggestion- where aisles in the middle of

the stores are low and get gradually higher as

customer reaches the perimeter.

Another good way to judge a store is by its

interception rate- their research shows a direct

relationship: more shopper-employee contacts

takes place the greater the average sales.

An important and simple yardstick of judging

customer satisfaction is the Waiting Time. If

shoppers are made to wait too long, their

impression of the overall services offered by the

practitioners plunges.

Paco Underhill highlights one important issue of

retailers- They don‘t know who their customers

are. This is a remarkable example of business

ignorance which needs to be taken care of.

A strategy not implemented is no good,

Talking theories and concepts of shopping

science is but in vain unless the ones who it is

meant for, put it to good use- the practitioners.

In this competitive industry what is it that will

put one retailer at an edge vis-à-vis others- Is

it high customer centric approach, efficient

system, better customer servicing? What will

give a retailer a sustained comparative

advantage? Paco Underhill talks about few

important concepts that retailers must be

aware about for better in-store strategy that

increase the conversion rate- Interception

(Employee at customer‘s service) and reduced

waiting time. Building a bond with customers

is important. ―Know your Customer” is an

important business mantra to better customer

relationship and higher sales.

The concepts stand very relevant to online

retailing as well- For better conversion rate it

is important to push notifications and almost

interact with your customers.

Notifications/pop-ups while you shop online

telling shoppers about latest deals/products

increase the conversion percentage. Knowing

your customers- by studying their clicks and

browsing pattern is an important source of

advertising in this world of virtual shops.

Also, the big Billion sale downturn, where the

website crashed, can be a point of reference to

understand the ―no waiting‖ concept stands

true for e-retail as well. Bansal Brothers

publicly apologized for the bad customer

experience post big billion day.

Important Highlights Thoughts

Page 5: why we buy- Book review

Tanisha Mehrotra

Transition zone- talks about the time it takes for

an average shopper to adjust from the high

paced movement in the parking lot to the slow-

down once inside the store. In this zone

shoppers are adjusting to the lighting, the

temperature, and situating their personal

belongings. In the retail environment- upfront is

the last place you want to be in- termed as

―decompression zone‖ by Paco Underhill.

Merchandisers must keep away from trying

anything in this zone and keep it as small as

possible. It is advisable to not greet shopper

right in this zone and hover them like vultures

instead they must leave shoppers alone for at

least one minute, let them make the transition,

adjust and be past the phase before a

salesperson/coach approaches them.

Suggestions by the author- use the

entrance/decompression zone in productive

ways.

Something like flower department- shoppers

might want to come back at the end of their

shopping spree.

Another important suggestion is ―power-

display‖ which acts as like a speed bump to

slow shoppers down. Another smashing

decompression zone idea could be to list the

deeply discounted merchandize, a deal so good

that it stops shopper right at the entrance.

Instead of pulling back from the entrance, push

the store out beyond it—start the selling space

in the parking lot.

The Twilight Zone

Important Highlights Thoughts

This part of the book highlights an

important shopping mechanism-

merchandising vis-à-vis space.

Understanding such intricate details

about customer behavior/pattern helps

retailers position their products better

with much thought and planning. It is

almost like a walk through the

shopper‘s sub-conscious mind.

The decompress zone- if I relate to my

own experience seems extremely

relevant. I have seldom paid attention to

what‘s right on my face when I enter an

outlet. I may come back to it later while

having exhausted my other options.

Though I have certain apprehensions

with ‘taking the outlet outside in the

parking lot‘ idea because it might dilute

the brand image. Having interactive

Billboard- announcing offers or a digital

board showing a moving display might

be able to attract customers better and

persuade them to step inside the store.

Positioning products on the e-commerce

website also involves a lot many

algorithms as to which are the most

popular or discounted or loved product

to catch shoppers‘ attention right from

the start of their virtual - shopping

spree.

Page 6: why we buy- Book review

Tanisha Mehrotra

This chapter opens with a woman shopper on a usual

chilly day out shopping. Underhill brings out the hand-

allotment issue: ‗God gave her two good hands. But she‘s

shopping with one‘. Her one hand is occupied by

carrying her coat and bag. Once she selects something in

the store – she is down to no hands and the shopping

spree is over.

The case is common to commuters in a metro station who

have an office bag and a cup of coffee/sandwich/lunch

etc. In such case if a commuter visits a newsstand he has

no space to place their belongings during the transaction

and faces the hand allotment issue. Suggestion by

Underhill- There must be a shelf at elbow height where

customers could rest their briefcases/purses/coffee while

digging out their money or waiting for changing.

During rush hours- the one hand issue adds to the

purchase time resulting in limited transactions. A better

designed display that takes human anatomy into

consideration is a remedy.

Post his extensive reading of customer behavior in retail

stores/outlets- he inferred ―if someone gave these people

baskets, they’d probably buy more things! They wouldn’t

buy fewer items, that’s certain.” He pointed out to the

direct relationship between the percentage of shoppers

using basket and the size of the average transactions.

Shopping aid strategy- giving baskets/carts right at the

entrance plus placing other shopping baskets at strategic

locations throughout the store

He further offered a suggestion to address hand-allotment

issue- create a combination coat checkpackage call

system. Customers could check-in all their personal

belongings and salesclerks would dispatch the bags to the

will-call desk near the exit. Shoppers can then have a

hands-free shopping experience.

You need hands Important Highlights

Thoughts

This chapter furthers the focus of

businesses/retailers towards more

customer centric approach. How

shopping patterns and their

understanding, such as customers‘ usage

of hands, can affect an outlet‘s sales.

Underhill talks about the hand-allotment

issue which we almost always face in our

shopping experience but never

understood its implications. Practitioners

can increase their average sales in rush

hours by altering the counter design and

strategically locating carts to increase the

sales/ transaction size per basket.

There is a lesson for e-retailing as well,

every product must be redirected to cart

which can be accessed at the checkout,

products may be added or removed at this

stage and final payment can be made. It

must be a glitch-free experience for

shoppers. Like the example mentioned in

the chapter about the convenience of

picking up the order at a time suitable to

shoppers, online retailing website must

also provide with a similar feature-

Having an account in one‘s name where

order stays save in your cart and shoppers

can come back to it at a time convenient

to them- make the payment and check

out.

Page 7: why we buy- Book review

Tanisha Mehrotra

How to read a sign

Important Highlights Thoughts

According to Paco Underhill it is only at the

Floor of the Store and not within the comforts of

a conference room, can you really access

whether a sign or any in-store media will work

or not.

For him they are not just signs within a store-

it‘s a three dimensional walk in a TV

commercial- the job is to figure out what to say

and when to say and how to say it. Say it in a

way that grabs audience‘s attention at an instant

glance.

Each zone, according to him, is right for one

kind of message: ―putting a sign that requires

twelve second to read in a place where

customers spend four seconds is slightly more

effective than putting it in your garage‖.

Clever placement suggested by Underhill- small

signs inside bathroom stalls, escalators, waiting

areas( e.g.- repair department waiting

area),menu board and counter-area signs receive

prolonged attention, promotional material over

the condiment bar (not the main course but

advertise something like desserts); strategies are

different for a fast-food restaurant, which are

usually zoned, and a family restaurant.

He also talks about the smart sign design that

breaks the message into two or three parts and

communicating it a little at a time.

Roadway signs must be short and precise (2/3

words) for drivers to get the message within

seconds, they won‘t stop to read over any

message. The message can be either read fast or

positioned in a manner that it can be read while

moving.

Key take away from this chapter is that

Logical sequencing of signs and fixtures is

integral for efficient and effective

communication of messages that matter to

both companies and shoppers. I could have

never imagined the importance of studying

detailed customer behavioral pattern before

designing the sign and positioning it. A

relevant message in a relevant zone is a must

for an effective communication, where the

efforts of the marketers are not wasted.

Understanding it in the online-commerce

perspective- companies are using digital

media/social media to communicate any

promotion or message. With busy urban

lifestyle, people hardly have time to read

elaborate messages. Hence, Digital Adverts

must be strategically designed to convey the

required message in a best pictorial way with

minimum text, something that grabs

attention of the onlooker. Also, on a website

the signs must be strategically positioned to

direct customers to relevant links and convey

offers that are addressed well.

Page 8: why we buy- Book review

Tanisha Mehrotra

Shoppers move like people Important Highlights

Thoughts

A smart store, according to Underhill, is one that

puts merchandise in shopper‘s path and in our field

of vision in a way that invites consideration.it is

designed according to how customers walk and

where they look.

He also makes an observation about the ―Right-

leaning Bias‖- people invariably walk towards the

right. In a retail environment it can be of utmost

significance by placing most important goods on

the right side.

An effective way to display goods is cheveroning-

placing shelves or rack on a 45 degree angle for

better exposure of what the hold to the vision on a

strolling shopper. The negative part of

Cheveroning is that it requires about one-fifth

more floor space.

A good store operates by using pinball effect-

dispersal of merchandise across stores which

makes shoppers helplessly pulled in by what they

see up ahead or to their right.

Underhill talks about ―The Boomerang rate‖-

measure of how many times shoppers fail to walk

completely through an aisle, from one end to the

other. Half-Boomerang can be overcome with

options like- floor graphic of a hopscotch game,

,keep a must-need-item like milk at the end, put

discounted products on back left-hand corner.

Where the front of the showroom is concerned,

display must be altered according to the customer

traffic. Eg- A book store can display books on

child care/health care in morning hours, books on

games and pop music for school rush in the

afternoon. Evening time, when work crowd

streams through, books on business and computers

can be displayed.

“How shoppers move‖- an important

mechanism in retail environment to

customize the layout of the store according

to usual movement of shoppers.

The right leaning bias almost

subconsciously controls our movement not

just while shopping but otherwise as well.

Such tendencies act as a referral point to

think from consumer‘s view point while

designing offering.

E-retail website may have algorithms

designed so as to overcome the low

boomerang rate as well. Shoppers may not

be willing to swipe down all the products or

may get tired mid-way. The role of ‗filters‘

come into picture here- Shortlisting only

attributes necessary( on the basis of price,

size, color, popularity) to shoppers can

overcome the tedious list of thousands of

products.

Page 9: why we buy- Book review

Tanisha Mehrotra

Dynamic

Important Highlights Thoughts

In a retail environment, Shoppers and their

needs determine what products are to be sold.

Therefore retailers must identify the customer

needs and accordingly maintain assortment in

their stores. According to Underhill, addition of

a chair can increase sales. Seating plan can

have three variations: short term parking-

outside a dressing room, medium term parking

chair immediately outside the door where

people can wait for around 10 or so minutes,

and long term parking-a comfortable place for

twenty minutes or longer.

At a Fast Food outlet, drive-thru customers

account for more than half of all the fast food

purchased. Therefore, fast food restaurants

must make sure that parking area is visible

from the street where customers can park their

car and enjoy their burger with a pleasant

music. As a matter of choice, they must

decrease their building space and include more

of parking area.

In the world of diverse customer

preferences, it is important for retailers to

cater to these dynamic needs and not turn

down any business opportunity. It is

important to identify problems and convert

them into solutions, benefiting in the

process.

Plus size segment in famous retail stores is

a good example. Brands are now trying to

take into account dynamic retail

environment, changing customer

preferences and variety expectations of the

customers into consideration.

Page 10: why we buy- Book review

Tanisha Mehrotra

The demographics of shopping

Underhill observes that the traditional shopping

behavioral pattern varies between men and women.

(Men are like hunters who shop recklessly and women

are more like gathers that can spend their entire day in a

shopping mall just observing the merchandises).

Though with changing women‘s roles their shopping

habits change as well. Therefore, the retailers must

strategize around involving men more with the store.

Women are heroic shoppers- women who assume pre-

historic role under patriarchal convention are the

shoppers of family (the gatherer link)- this particular

function endowed them to move out of the four walls.

They apply psychological and emotional aspect to

shopping (involve themselves in the ritual of seeking,

comparing, imagining and envisioning merchandise).

They are the ones who plumb the metaphysics of

shopping. They have a thing for shopping and the butt-

brush effect talked about in the first section stands true

for women as well- they have an aversion to examining

anything below waist-level. To conclude- women

demand more shopping environment than men do.

Retailers also have to cater to elder generation (in their

50s or 60s) by having designed the retail environment to

accommodate their needs. Using larger texts in menu

card/packaging, wheel chair accessibility must be

considered.

Children are an economic force that can be considered

as positive or negative. If a store is unwelcoming to

children, parent shoppers will stay away or vice-versa.

A retail store must be designed in a way where children

must be able to reach out to the products that are

intended for them. If the products are meant for parents

and require their serious attention- there should be

provisions to divert the minds of kids. As the roles of

parents change, teenagers are getting more independent.

Therefore, the offerings must be designed keeping in

mind their accessibility by teenagers.

Keeping the demographics of your target

market in mind while designing the retail

environment, must be of utmost importance to

the retailers.

Though I don‘t quite agree with the

generalizations made by Underhill, as the

roles are changing and retailers must be ready

to adapt to them; there are decent amount of

pattern observations made by the research

team to arrive at such conclusions. Hence,

they can be taken as a reference point to

design offerings.

Online-retailing too must cater to such

behaviors associated to demographic profiles

of their target market. A website intended for

men must be structured differently than

women. A website for teenagers must be

colorful and flashy enough to attract their

attention. Typically a woman wants more

options/variety than men hence their section

in the website must be abundant with the

same. Whereas, men who before entering a

purchase have in mind what they intend on

buying must have less but best options. Also

shoppers must have a wish list option where

they can observe, compare and choose

amongst options before finally checking out.

Important Highlights Thoughts

Page 11: why we buy- Book review

Tanisha Mehrotra

The dynamics of shopping

The sensory aspect of shopping is an important aspect in the

decision making process for an unplanned purchase. Customers

today buy products more on the basis of trial and touch. If a

product like clothing has to be bought, it is important to touch

the cloth for deducing its quality. This is also true for cosmetics

which need to be felt before buying them to ensure their quality.

Underhill states a thumb-rule that shoppers tend to touch and

feel high-involvement products. Touch and trial is important

for individualist individuals who tend to be less loyal to brands

and buy products based on their virtue.

Shoppers buy products that appeal to their five senses- a

perfume will be bought only after having it smelled.

Underwell, in the section ‗THE BIG THREE‘ talks about the

interdependency and interrelatedness of the three factors:

Design/layout of the store, merchandising done- products

acquired and operations aspect- how they are intended to be

worked out.

Waiting time according to Underhill is one of the most

important factors in determining the overall service quality of

retail store. Bending time thus acts like a threshold point beyond

which a customer will change its perception about the service

quality as a result of waiting time. If a customer can be attended

within 2 minutes – the transaction will be considered successful.

Techniques and tactics can be adopted to deal with the bending

rate.

Transactions must be optimized in a way that the check-out

must be fast and efficient. Customers hate waiting in the line for

billing/wrapping. Technologies (scan/barcode reading) can be

used for efficient billing.

In the section ‘Magic Acts‘ talks about the role of

merchandising and the role an effective merchandising plays in

sales. Two competing products must not be placed together to

sell more of each and the adjacencies too play an important role-

which product is adjacent that adds on to sales is important.

It is the sensory aspect of

shopping that puts the brick and

mortar retail stores above online

retailing channels. The task of an

efficient retail website is to

strategize around this limitation

and turn it into an advantage.

Options like Trial before paying

can be a major consideration:

Lenskart‘s strategy of trial of

frames back home, choosing the

one among five frames earned

them an advantage.

The Big Three model can serve as

reference point for e-retailing as

well- a website designed with

high assortment of products and

well planned in order to provide

the convenience of shopping to

the customers. Their choice range

must be just a click away and the

whole process of landing on the

page, observing the product,

referring to important

information, choosing it and

finally making the payment must

be a smooth process.

The concept of cross-selling must

be taken into consideration by the

e-tailors by using appropriate

algorithms to en-cash on the

adjacencies concept.

Important Highlights Thoughts

Page 12: why we buy- Book review

Tanisha Mehrotra

In this section- Underhill talks about online-

shopping and its convenience. It is best suited to do

business with merchandise that doesn‘t involve a

lot of browsing, touching, prodding or stroking.

Online world can also be as a brand-building

platform.

Underhill also illustrates the importance of self-

examination for a retailer. They must examine their

shopper‘s behavior while they shop and alter

offering if necessary. An industry can learn from

other industries as well, to identify changes in

consumer pattern; having a café in a bookstore

helps them spend more time in a store comfortably.

The culture of shopping

Final Thoughts

The science of shopping is a practical field that helps retailer, gain a competitive advantage

by better understanding customer behavior and reduce the odds of failure.

Underhill identifies that customer is king and that the role of a retailer is transitory- it

revolves around customer preferences and evolves with changes in their behavior. He

connects retailing environment with the Darwinism theory on Adaptation and concludes that

if retailers don‘t adapt to changing consumers/ customer‘s needs and preference, they might

die out.

Throughout my review, I have

referred several times on the

possibility of applying the concepts

stated by Underhill, to an e-

commerce website.

Important Highlights Thoughts

Page 13: why we buy- Book review

Tanisha Mehrotra

―It is not the most intellectual or the strongest of species that

survives; but the species that survives is the one that is able to

adapt to and adjust best to the changing environment in which

it finds itself.”

Charles Darwin

It is not the strongest retailer that will survive; the one that

survives will be the able to adapt and adjust best to the changing

consumer preferences and retail environment

Paco Underhill in his book ‗Why We Buy‘, Talks elaborately

about the factors that affect consumer‘s behavior when they

enter a retail store for purchase. Identification of these behaviors

can help retailers strategize their offering better to succeed in

their endeavors.

I, through this book review, intend to highlight these factors

mentioned in the book by Paco Underhill and offer my

understanding from the reading. I have also given my thoughts

on the applications of the concepts proposed in the book to seek

relevance in the context of ‗The online world‘.

I have given important highlights of each chapter/section of the

book and further reviewed them by dividing the page into two-

the left side is used to for making notes from the book and the

right side to offer my interpretation.