Underhill, Paco

Paco Underhill, urban geographer and retail anthropologist, is the founder of Envirosell, a research and consulting firm that advises a blue-chip collection of Fortune 100 companies. He has been profiled in the New Yorker and Smithsonian magazine and has written for the Wall Street Journal, the Christian Science Monitor, and a cross section of Trade and Professional Journals. He lectures widely and lives in New York City.



He's written Why We Buy: The Science of Shopping.

tompeters.com asks ...

In the acknowledgements at the end, who is Paula Kartus, to whom you write, "I hope you have had a good life, so far"?

PU: She's somebody who helped me out in college, who, to my knowledge, has never seen the acknowledgement in the back of the book. I've tried to find her, but she's disappeared. She helped type my papers and a few other things that, for somebody who wasn't particularly coordinated, made a huge qualitative difference in my life. And I promised her that whenever I did my first book, I would thank her for her help. I've done it now in a quarter of a million books and in fourteen languages.

Who will learn the most from your book?

PU: Virtually anyone out there who is a consumer—most of us—has something to learn from it. It's curious that over the course of a typical week, I may do an interview for a major business publication, for a major popular publication like the New York Times, a trade journal, the Christian Broadcast Network, and the Flagship of Polka radio. And the fact that all of them seem to feel perfectly comfortable picking up the phone and asking me about something that they've noticed in the context of the world as they know it, seems to be an endorsement.

Well, we all shop. Right?

PU: We are part of a consuming culture. And 60 to 70 percent of our first world economy is based on discretionary expenditure. What has tantalized the business community is that the tools of 20th century marketing don't work as well as they used to, and they're looking for other kinds of solutions and insights.

What's the single greatest mistake that retailers make in trying to separate me, as generic shopper, from my money?

PU: Some of the most telling, are some of the most obvious. The comfort of consumers has a direct relationship to how much they spend. Not looking at the basic, fundamental comfort issues of the customer experience has a direct relationship to your profitability—whether you're Wal-Mart or Nordstrom.

You never talk about sales, the 10-percent-or-whatever-off variety.

PU: I think sales are one of the great panaceas of modern retailing. Marketing based on price reduction is one of the simplest ways of selling stuff, and is one that can often be poisonous.

What do you mean?

PU: It means that you focus on what the price is rather than what the value is, or the quality of the customer experience. Certainly sales work. Unfortunately, in many channels of distribution, they have managed to train the customer only to buy during sales. Virtually no one in the world of department stores is willing to pay full price.

The sales process has gotten increasingly more complex. I can remember doing a study for a department store chain where they had 30 percent off and then take another 10 percent at the register. The problem is, most people, whether it's the customer on the floor or, in this case, often the clerk at the register, have no idea what it actually costs.

Nobody went broke assuming that the fundamental arithmetic skills of a first world consumer—particularly an American consumer—were pretty dismal. "Thirty percent off this, and then take another 10." And is it 10 off of what you started with, or is it 10 from where you end?

Exactly. That's always my question, and it's never clarified. And then no one you ask knows the answer to it, either.

PU: Everyone feels a little sour. There are other European apparel retailers like Zara that have done a good job of saying, "If you like it, buy it now. Because if you come back tomorrow, it's not going to be here."

I like that.

PU: We as consumers are older, wiser, and more cynical. If you give us a good reason to trade up, we will. Most of us have learned that the lowest price isn't always the best value. We also know that much of the first world is money rich and time poor, and running around and finding something at the lowest price assumes that somebody has the time to do it. What we want is a fair price, within the convenience and task-based model that we're living.

Saturn, the car dealership, seems to be doing this to some degree.

PU: That's where they started. Unfortunately, it's been an increasingly troubled franchise. I took a group of automobile executives around on a tour of dealerships. One of the places I insisted that we visit in each dealership was the ladies' bathroom. And we trooped this bunch of guys into the ladies' room, and I asked, "Do you think your wife would like to pee here?" Almost universally, they said, "No."

I said, "If you're marketing cars to women and you're marketing a dealership to women—this is an important place. Because in a 21st-century dealership, you're not selling a car. You're selling three trips a year to this place to get something done.

Therefore, when a customer walks through the door, I think the first thing you should do is take them to the employee lounge and say, "If you buy a car from us, you'll end up sitting in here three times a year. Here's our coffee machine, here's a free Internet connection. I want you to know you can set your appointments a year in advance; you can do it over the Web. We're happy to give you a loaner car. And if you want to watch what we do to your baby, you can do it through this window. And we have a fabulous bathroom."

For half the people buying cars, that would be much more effective than saying, "This one is only $31,999.99."

I spoke with Faith Popcorn about her book, EVEolution. She writes about how Jiffy Lube is working at making themselves more appealing to women and making the place much more friendly, making nice bathrooms, and a nice waiting area, with women's magazines, since they finally understood that it was women who were bringing the cars in for service.

PU: Maybe they should add a nail salon.

Sure.

PU: Of all the books that Faith has written, EVEolution has been one of my favorites. She's speaking from both knowledge as well as her feminine instincts.

You used the word "impulse" a number of times in this book, as in terms of impulse shopping. Can you talk a little bit about that? What does it mean? Why do we do it?

PU: I go back to that basic stand that 60 to 70 percent of everything that we buy walking into a grocery store, for example, we had no intention of buying. What's curious is the difference between an amateur and a professional shopper. An amateur shopper is somebody who gets pleasure out of the act of acquisition. A professional shopper is someone who takes pride in ownership.

That's a very importance difference. And this is part of what impulse goes to. There are a lot more amateur shoppers out there than there are professional, and they're people who can stumble into drunken sailor mode.

Now, we'll come home, though, and we'll say, "Oh, it was just an impulse buy." Do we regret our impulse buys more than the things that we listed on the 3X5 card before we went to the store?

PU: Our purchases in a grocery store go into three categories. One is what is on our list. The second is seeing something on the floor that makes us go through our inventory, and the question becomes, "Maybe that's something that should have been on my list." The third is that tantalizing new thing, salsa flavored ketchup, mustard anchovies, whatever—which is something that just strikes us, and we have to have it.

You talk a lot about our senses, and how often they're neglected in most shopping situations. But I'm in the store and see that salsa. I can already taste it, and that's just what I want at that moment, so that's why I go for it. Something, the packaging or some description of it, really got to one of my senses.

PU: It gets to us. Impulse items are things that make us feel good. "This looks like an indulgence. Don't I deserve it?" Some are the things we buy for ourselves after we've taken care of the needs of others. Which is the reason why it's important in stores that are patronized by women, that somebody thinks about what the impulse-based purchases are in the last third of the trip. After she's done shopping for everyone else, there's just a little something for her to consider getting for herself.

You talk a lot about signs, about signage, about their placement, for directional uses, for informational uses. Isn't it possible that we already have too much information?

PU: The signage industry has gone through a major revolution, particularly in the past 10 years. Their approach has been that if two signs work, then 147 signs must work a miracle. I go into many environments that look as if somebody has applied information with an Uzi.

What is a very important in-store marketing strategy is to walk through whatever the environment is—from a hospital to a store to a showroom to a gas station to a rental car agency—and do what McDonald's has done a good job of, which is dividing the experience into distinct zones. Figuring out what your window of opportunity is within each zone, and how much time I have to communicate it. And setting up some form of information hierarchy that fits into what the customer experience is.

One of the things I'll do in many stores is ask them to triage their signage. "What do you absolutely need? What can you basically get rid of? And what's in the middle? And let's walk through it and see what we can do with it." Unfortunately, there are many signs up in public places that are slightly more effective where they are than they might be, let's say, on the wall in my garage.

Tom Peters has been on a design rampage and talks about signs a lot. And I found myself becoming very sensitized to just how lousy most signs are. Public space signs, for providing direction. They're terrible.

PU: Here's an example we've been wrestling with. We have two clients. One is Opera America, which works with regional opera companies across the country. The other is The Smithsonian. We're looking at a specific museum in Washington, D.C.

And both of them are concerned with the quality of experience of the first time visitor. If you're an institution like the Smithsonian, a healthy portion of your audience is new to you. Also, whether you're in the performing arts or whether you're visiting a museum, there are lots of exhibits now that are ticketed.

And we've been dealing with trying to get them to do something with the "will call" signs. "Will call" means something to somebody who has some theatrical experience, but the rest of the world has no idea what that means.

The percentage of our business that is somehow signage-related probably doubled last year. And that is the simple act of going out and researching somebody's signage culture, which involves interviewing people as they come out of a store. We ask them, "What was the promotion on the floor?" It is incredible to me that we as a promotional culture spend so much on signs, and yet there is no accountability built into it. I have had a proposal for testing signage promotions sitting on the table of a major fast food operator for three years.

It's a proven machine. We've tested it, and it works. But it needs a significant amount of data to be able to work. And this company is unwilling to come up with three-quarters of a million bucks to turn this engine on. They're willing to spend many many millions in signage promotions, but not one dime is spent looking at it from a scientific standpoint, and measuring what its success rate is.

The people who have millions to spend on signs don't want to be bothered with having to spend some of that on somebody seeing if it works. Right? Because then that ruins their game.

PU: The PoP [point of purchase] culture has been driven by sales, just as the advertising has been driven by marketing. If the signage structure of our marketing culture is going to go from the poorest stepchild to somebody who deserves to sit at the table, one of the problems it's going to have to address is accountability.

I get lots of calls from people who say, "I want you to come in and help me sell this signage system." And I tell them, "I can't do it. I can look at how to make a sign better, I can look at how it succeeds. But you can't see me as a sales tool. You have to see me as a getting-smarter tool."

Chapter 18 is titled "The Self-Exam," and it's about studying your own situation, about taking the time to really look. You talk about how if you just stare at one place for five minutes, it's amazing what you see. And it reminded me of a talk I had with Tom Kelley of IDEO, who wrote The Art of Innovation. And he says that IDEO's secret weapon—and these guys are no slouches when it comes to developing fabulous products and services—is observing. When they first get an engagement, they go in and spend a lot of time watching people using the product.

Why is the act of simply observing so overlooked?

PU: Well, people have done a very nice job of insuring that I can remain in business until I choose to retire. We are often wrestling with a marketing and business culture that tends to be top down rather than bottom up. And I've seen lots of things where people lock themselves in a conference room and come up with really brilliant concepts, but it ends up failing for the stupidest reasons, because somebody hasn't worn their heels down.

There are a lot of business executives out there who still have leather-soled shoes in their closets. This means that they don't spend lot of time on their feet. What being a good observer involves is being comfortable, and being comfortable blending into the woodwork. Rubber-soled shoes help, too. There are a lot of successful people who are not very good at thinking standing up, much less blending into the woodwork.

At one point you write: "Shopping is still and always will be meant mostly for females."

PU: I think that's true.

Why do you say that?

PU: Probably the most important issue of our era has been a movement away from biology. The similarities and differences between men and women, I think, are in a profound revolution. Biologically, women have the feathering and gathering instinct. Men have tended to be hunters. They go out and search for one thing, and something else can pass by underneath their nose and they just don't see it.

We have watched the number of men doing the family shopping increase, but I don't think they will ever be a majority. Women also live longer. That means that as we age as a culture, and the assets are passed on, we're going to notice over the next 30 to 40 years that a significant amount of the assets in our world are going to end up being controlled by women.

In that same chapter there's a line, "Men are shopping more like women, and women are shopping more like men." And I had this brief glimpse of androgyny there. Is it the marketplace that would really bring the genders together?

PU: It is a very curious issue. For instance, it was very ironic to pick up Maxim, a magazine aimed at the 25-and-under male, and inside are hair color ads that are clearly aimed at the heterosexual male. That's something that I don't think could have existed even four years ago.

Where does this lead us? I have no idea. I am glad, in one sense, that I'll probably be six feet under when it does shake out. It's a much more complex world now than it was when I grew up.

I love to shop. In fact, my wife and I have traded roles in our relationship, because she doesn't like to shop at all, and I go out and do the food shopping and I'll go to eight other places along the way. It is a kind of amusement for me, though it's very frustrating at times.

PU: With many of us. In my own household, I end up doing most of the food shopping. I think it's because my spouse is frustrated by it. It doesn't mean that she doesn't do any food shopping, or any of the shopping for the things that she likes to shop for, such as clothes. But for me, it's easy, it's simple, and I have none of the price discipline that she has. Take me food shopping and I'll always spend twice as much money as she might.

I love the fact that you mention farts in this book.

PU: I try to use ten cent words rather than twenty five cent words. If you ever attend one of my lectures, I make a point not to mince my words there, either. I use humor as a way of looking at truths. And if I can laugh at myself—which I try to do often—and I can get people to laugh at themselves too, we end up being closer to the truth than when we started.

The reason Why We Buy has succeeded is that the book is also a mirror. And we like to look at ourselves.

Thank you.