Paco Underhill, behavioural researcher and author of Why We Buy, sees big changes ahead for retail as it caters for an older, more female-dominated society. Interview by Brian Tarran.
Paco Underhill has seen plenty of changes in 25 years spent watching people shop. “Retail is a great cultural dipstick,” he says. “What made a good store in 1990 and what makes a good store in 2012 is completely different, and those differences are a reflection of the differences in us.” And how we’ve changed. The economic downturn saw to that. “I think what the recession showed us is that our debts were too big, our cars, our houses our bellies were too big and we all need to go on a diet,” says Underhill.
Certainly we’re facing lean times ahead. Recent research by Kantar Worldpanel and TNS BMRB finds that 48% of UK households are struggling to meet their monthly budgets, so much so that buying on-promotion items has become the norm for all socio-economic groups while paying off debt is the major priority for all demographics.
Retailers are moving to take advantage of this new reality: witness Tesco’s rebranding of its visibly low-end Value range to the more generally palatable ‘Everyday Value’. Meanwhile, mobile technology is facilitating a bargain-hunting mentality. “With this,” Underhill says, pointing to the BlackBerry he’s just borrowed off a colleague, “I can be inside Harrods or Primark and be cruising for prices or product information in the aisle of the store. That shifts the balance of power between the merchant and the consumer.”
But other changes are afoot. An ageing population, the growing dominance of the female consumer and the increasing feminisation of male shoppers all have implications for retailers and manufacturers.
The science of shopping
Underhill’s job is to help product makers and product sellers understand how the consumer shops and how stores help or hinder buying behaviour. He refers to his work as ‘the science of shopping’. That sounds like it involves wiring up shoppers like lab rats, with heart-rate monitors, other biometric data feeds, a brain-scanning cap and a pair of eye-tracking goggles - but you’d be wrong. Underhill uses some of that (“We like to use as many different tools to look at an issue as we possibly can, or at least as many as the client can afford”). But core to the process of understanding shopper behaviour is a piece of paper.
“We call it the track sheet, in the hands of the individuals we call trackers,” Underhill writes in his 1997 book Why We Buy, which he revised and updated in 2009. ‘We’ is the company Envirosell, and it is the job of Envirosell’s trackers (fieldworkers essentially) to follow shoppers, watch what they do and make a note of up to 40 different variables of shopper behaviour.
- Paco Underhill is the son of the late American diplomat Francis Underhilll
- He moved to New York in 1975 to work on the Project for Public Spaces with urbanist William H. Whyte
- Underhill founded the first iteration of Envirosell in 1977
- He published his first book, Why We Buy, in 1999. He has since written Call of the Mall and What Women Want
- Envirosell opened its ninth office this year, in the UK, in partnership with HPI Research
Once enough shoppers have been observed on any given assignment the trick then is to decipher not only the combination of symbols, letters and hash marks the trackers use as shorthand, but to work out what the behaviour means in the context of the store and what the retailer or manufacturer can do to improve sales or save money.
The result might be worth millions - or $35m in this next example. Underhill recounts the story of a manufacturer of skincare products who, through the 1990s, packaged their products in boxes and sold them in drug stores like Boots, but also in places like Asda and Walmart. “We were brought in to understand the physical interaction that customers were having with this one particular product at the point of sale,” Underhill says.
“We observed that one of the things shoppers do when they see a boxed product is they open up the box and make sure that what’s inside is what they’re expecting. That gives them the confidence to buy, but they put the open pack back on the shelf and take off a box that hasn’t been opened and that’s the one that they end up purchasing.”
This led Underhill to present two options to the manufacturer. “Either (a) you package it differently, so what’s inside the box is transparent from the outside, or (b), you simply take the box and get rid of it. We were able to construct a very compelling case to reduce the cost of packaging,” he says.
Who buys what
Now, let’s zoom out a bit - moving away from the packaging of individual products to look at the way the shopping aisle as a whole influences purchase behaviour. Underhill recalls working in Brazil in the beer aisle of a supermarket chain, which was adorned with pictures of - in his words - “buxom babes”. “We replaced them all with images of families eating dinner and we saw sales go up 20% overnight,” he says.
That may seem counter intuitive. Men drink beer, so men buy beer and men are quite often attracted to “buxom babes”. There’s some logic there, but it’s faulty. Men drink more beer but it is women that do most of the buying. “A man walks in to Asda and buys beer for himself. A woman walks in and buys beer for a social gathering. Who is it that’s the most important audience to be able to sell to? The answer is, the woman because she buys more than the man does.” And so, Underhill says, “If we take away all of the overt appeals to the male buyer, it makes it more comfortable for the women to see beer as a beverage of family conviviality.”
The differences between the male and female shopper, and what each wants from shopping, has a chapter dedicated to it in Underhill’s first book, while his latest, What Women Want, focuses on the growing commercial heft of the female shopper and how companies are having to respond.
By and large, he says, we still live in “a world that’s owned by men, managed by men, designed by men”. “But we passed over a very magic moment at the start of the recession,” he says. “At that point, if you were an employed female in a major European or north American city, at age 30 you were out-earning your male counterpart by somewhere between 15% and 20%. You were better educated, you had a better job, and while there still exists a glass ceiling the basic balance between genders is in flux.
“The gender issue here is one that permeates everywhere. A serious percentage of the Predator drone pilots [in the US Armed Forces] are female. The NATO general that commanded the air campaign over Libya was female. It doesn’t take the brute strength to drive a tractor or a forklift truck that it might have 20 years ago. Therefore the way in which we think about who does what and who shops for what must change. Women don’t just buy clothes and food. They buy cars and lawnmowers and vacation homes and boats.” And beer.
Not doing it like a dude
Along with this blurring of assigned roles, Underhill says there is also a blurring of the shopping behaviours that were once unique to each sex. Essentially, men are becoming more feminised.
“Historically women were gatherers,” says Underhill, which means they get immense pleasure from the act of looking for things. “Lindsay here,” he says, referring to his BlackBerry-owning colleague, “could meet her sister, they could go to Westfield London, they could spend the afternoon there and have a wonderful time and buy nothing. But men are programmed to be hunters. If we can’t walk into a shop, score what we came in for and walk out the door, we’re failures.”
But between the generations men are changing their attitudes to shopping. “I would never call up one of my buddies and say, ‘Let’s go shopping’, but a teenage boy is eminently comfortable doing that. They’ll go hang out and check out the stores in a tribal group, maybe buy a present for one of their mates - and it is perfectly acceptable. So whether it’s the world of marketing or the world of merchants, we have to be very cognisant, both of gender but also of generational issues.”
The ageing of populations is another factor retailers and manufacturers must start considering, as it brings with it a unique set of problems for the retail environment to overcome. Envirosell’s largest office outside the US is in Japan, which as a country is ageing faster than any other. “I love working in the Japanese market because it shows us all the ways in which the commercial world is trying to adjust to an ageing population,” says Underhill.
It might be slowing down the escalators when you know that a senior population is going to be shopping, or introducing labels and signage with bigger typefaces. Waiting areas or rest areas will also score points with an ageing crowd, as will making sure that products favoured by elderly customers are in easy reach. In Why We Buy, Underhill discussed how RadioShack, the US electronics retailer, used to stock hearing aid batteries on the bottom of their free-standing ‘spinner’ fixtures. They were the slowest-selling items so this made sense when matched against prevailing retail wisdom. “But who buys hearing aid batteries but old people, the shoppers least able to stoop,” says Underhill. “When the batteries were moved higher on the spinners, sales went up, and sales of the batteries that were moved down didn’t drop at all.”
Ultimately, success for the retailer lies in showing you care about the customer - and that’s true whether the shopper is young or old, male or female. “Gratuitous acts of kindness translate into a better relationship with your core customer. It’s just money well spent,” says Underhill.
Research agencies, on the whole, find it difficult to point to the financial return their work generates, yet Underhill’s book, Why We Buy, is littered with examples of how Envirosell’s recommendations have led to increases in revenue, profits, cost-savings, footfall - you name it. What’s the secret?
“We have a phrase that we use often in the business: ‘Two weeks, two months and next year,’” says Underhill. When research crews go out, he says they are told to bring back suggestions for changes that can be implemented within those exact time frames.
At two weeks, the changes made may be small, but if they’re noticeable it gives the client the confidence to move on to implementing bigger changes at the two-month mark. “If you win on those first two,” Underhill says, “it’s a lot easier to get the client to buy-in to what they should be doing next year.” That’s where you should see the biggest payback.
And what of Envirosell’s return? 78% of its client work is repeat business, but staff have to make a big personal investment to achieve this, Underhill says. “A typical project manager or director of ours spends somewhere between 90 and 100 nights a year on the road, most of it on weekends. There’s no irony that I, as well as any number of other Envirosell people, have chosen our mates either from the entertainment industry, who are also used to working weekends, or from the retail community, who know that working in retail requires being on call at least one weekend a month.”