Book review: “Why We Buy”




I came across this classic while reading about frugal lifestyles and debt payoff. The author talks about retail stores and merchandising and marketing, but he unintentionally offers another benefit. If you understand how the stores are marketing to you, then you can understand why you buy. You’ll have more control over what you buy.

When Paco Underhill started his shopping research back in the late 1970s, he used college students to carry out anthropology field studies with clipboards and video cameras. They tracked shoppers moving through the stores, watching how they interacted with the layout and the products. Underhill’s teams used their video and data to prove to the disbelieving store executives what problems the shoppers had– and then they used the same tools to see how the solutions were working.

That last paragraph makes it sound so simple, but unless you’re obsessed with human behavior then the study of shopping is actually mind-numbingly boring. Underhill’s biggest challenge in the early days was finding staff who could observe all the significant aspects of the customer’s behavior and get the data. Later, when they’d go over the raw information, they’d discover that they needed other details or that they needed to study new aspects of consumer behavior. Back to the store to generate more data!

Then there’s the whole problem of observing the customers without affecting their behavior. (Underhill says that alert kids are usually the first to figure it out.) On the rare occasions when researchers actually talked with the customers, they’d find out that their subjects don’t remember their own behavior either. If Underhill’s staff asked customers how long they’d shopped or what drove their decision, the customer would happily tell them– and it would usually be a different answer than what had just been observed on video.

Underhill’s biggest challenge was proving to skeptical retailers that they could do it better. The store managers usually felt that they knew their stores better than any consultant. (Usually the data proved them embarrassingly wrong.) Even the cashiers and stock clerks, who are at the forefront of the daily discovery, would lack the experience to realize how their front-line decisions would attract some customers and turn others away. Advertisers and graphics designers were the worst to convince– their products looked great in the studio and during the CEO’s review, but their flaws weren’t usually detected until they were already out on the sales floor.

Underhill’s company, Envirosell, barely scraped by for a decade. (When you’re schooling your customers on their own stores, they’re not eager to tell everyone about your business.) Even when he was able to prove what could be done better (by before-and-after observations and sales data), retailers didn’t want to hear the news. Executive egos, headquarters politics, corporate bureaucracy, logistics expenses, and cultural bias usually conspired to subvert all but the most easily adopted fixes. Underhill could rarely persuade the execs to try anything really innovative, and that always led to a protracted debate over how the corporation would pay for the capital expense of experimenting with something new.

Envirosell was finally “discovered” by the media in the 1990s. Eventually a young writer, Malcolm Gladwell, wrote a hugely popular profile of the company before going on to become a hugely popular author in his own regard. As the business grew, Underhill began researching overseas retailers for new ideas to use in American stores. After a few years he began licensing Envirosell teams in those other countries to apply some aspects of American practices. The payoff was leveraged when he was able to use other country’s retailing techniques across borders and even across continents. American executives might argue endlessly about how Wal-Mart was doing a better job than Costco (or not), but they had to defer to Underhill’s experience on Tesco or Kojima.

The 2009 edition of “Why We Buy” (at your local public library, of course) has an updated section on Internet retailing. It just scratches the surface of social media marketing, but Underhill has a wealth of experience to share about online selling and how websites entice customers into an actual store. It turns out that Internet marketing & retailing is not being done very well, either, but it succeeds because brick & mortar operations are doing it so much worse.

Once Underhill has taken you through Envirosell’s research and the mechanics of shopping, he covers the demographics. You’d expect his gender descriptions of the differences in how men and women shop, but he also explains how middle-age folks, elders, and kids go shopping. Everyone wants to have “their” products at the right height and within easy reach, and everyone wants information on labels or signs. However, the similarities end there, and retailers have to decide what customers they’re marketing to. It’s not always obvious, and it’s not easy to execute.

However, it’s not just the store’s layout and its selection of merchandise. It’s also how the employees interact with the customers, whether clerks help shoppers make decisions or ignore them, and how quickly the purchase moves through the cash-register line.

It’s a fascinating story of human behavior. It’s an interesting tale of how an entrepreneur invented a whole new category of research and consulting and then grew the business to a worldwide powerhouse. However, the book is also a self-defense manual for shoppers.

After reading “Why We Buy”, you’ll understand your own shopper behavior– especially if you haven’t even been aware of it. You’ll understand why some stores always make you feel at home and why others annoy you the moment you enter the parking lot. You’ll appreciate the store’s efforts to make it easier for you to buy. You’ll also be more wary of how your “shopper emotions” are being manipulated while you’re occupied with looking, listening, and touching. You’ll know when you’re in the “wrong” store for your behavior and preferences, and you’ll know how to get the customer service you want. You’ll be a better negotiator and you’ll feel more in control of your impulses. You’ll learn better ways to shop over the Internet, even if you have to go to the physical store for the actual buying. If you’re a parent then you’ll be keenly aware of how your kids are affected by the marketing, and you can even show them how the tricks are done.

When you’re saving for financial independence, you’re already trying to track your spending and figure out your budget. You may be able to see where the money is going, but you may not understand how to change your behavior. You won’t get rich by cutting out the daily latte, but this book will teach you how to avoid being manipulated by marketing. You’ll even enjoy observing the retailer’s tactics, both in the store and online, and you’ll learn how to find the bargains that are important to you. Not only will you be a more efficient and effective shopper, but you’ll actually spend less. Once you’ve figured out how retailers are pushing your buttons, you’ll be able to align your spending to your own values– not theirs!

Now I need to reserve my library copy of “What Women Want”.  No, not that book.  I’m talking about Paco Underhill’s latest, “The Science of Female Shopping“…

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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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