Where People, Places & Products Collide: A Q&A with Retail Expert Paco Underhill

When your customers first come into your store, there’s a good chance they’re on a mission, looking for a specific item. But once a customer secures what she was looking for, “it is at that point she turns into a shopper,” says Paco Underhill, founder and CEO of market research firm Envirosell and author of Why We Buy: The Science of Shopping. Underhill has helped many companies learn just how consumers shop by analyzing what happens when people, places and products collide.

As Underhill suggests, retailers should be putting themselves in their prospects’ mindset. For example, you should consider the journey from the back of the store, where your customer found her item, to the front, and how you can entice shoppers to buy more products. Of course, the answers lie in these questions that Underhill suggests you consider:

• How do I fit into customers’ needs?
• How do I recognize the difference between the expert customer who visits every week and the novice customer that comes in three times a year?
• How do I ensure the language I use is the language the customer actually gets?

Recently, we spoke with Underhill to bring you his insights into how consumers react to displays and signage in the retail world.

Q: What pulls you into a new store?

A: What truly pulls me in is the angel and devil of the shopping experience. The angel is saying, “Just walk on by.” But the devil is saying, “Oh, that looks good. Maybe we should walk inside and see what there is.” The store window’s job is to try and present us with something intriguing enough to let the devil do his work. If we only bought what we needed or we only walked out the door with what we could acquire, the retail industry would collapse. Whether I'm in a grocery store, convenience store or a large office superstore, part of what we are doing is, as the French would say, we are “proposing.” As we propose, we are processing what we see into the context of our lives — some of which we recognize but some of which we haven't.

Q: Can you provide some best practices when it comes to store signage?

A: Make sure to match the sign to the opportunity to the need. Meaning, if I put a sign in a doorway and it has eight words on it, it’s not a great sign, because it misses the opportunity. Move through a store and define how long someone is likely to look at something, and then make sure that the sign is readable and fits what the nature of opportunity is. For a window, I want something that can be absorbed in two seconds. If it’s longer, I have to place it somewhere a person feels comfortable enough to stand there for a prolonged amount of time to really understand and read it.

Q: Which retailers pull people in and convert them really well?

A: The most successful merchants’ brands are ones that are managed across religion and merchandise. Classic examples: Lululemon, which is the religion of yoga; The Container Store, which is the religion of being anal compulsive; Apple, which embodies the worship of technology as design; Victoria’s Secret, a temple of sensuality — these stores have done an amazing job at creating a lifestyle.

Lululemon embraces a healthy way of living, and active wear to match this lifestyle. They have curated a lifestyle for you.

Small retail businesses need to be very cognizant of one of their advantages, which is the ability to customize to their immediate trade area. You need to understand who is within a quarter mile of their store and what you can present that is unique to that particular trade area. This is something the big boxes and national chains are still struggling with each and every day.

A great resource would be to buy some census data. The data can take a point on a map and describe the business code and the ages immediately around you. The Small Business Administration also has data resources.

Q: What are the latest innovations in retail that smaller store owners should be aware of?

A: One of the biggest things modern store design practice has begun to incorporate is using all five senses: sound, light, smell, touch and taste.

Triumphs of creativity over money is one of the most modern marvels, meaning, if I’m able to add to the sensual experience of the people walking in the door, I get their saliva glands working and give them a sense of pleasure being there. Smells are very evocative, matching the right idea to the right audience. Abercrombie uses music, light and sound to be tribal of who they want and to drive out who they don’t want in their stores.

Q: What are the biggest challenge small retailers must overcome when setting up their stores?

A: An important issue for a small merchant is the management of space and the crossing of space and service. We know the easiest thing is to change the physical design, but the hardest thing to change is the operating culture. The good small business leader is someone who is always in the store and who is leading by example, showing good leadership in all that they do.

I have a friend who owns a very lovely boutique and the point that she makes as the owner is that every day she’s in the store. Not only is she the lead salesperson, but she also entices others. If she sees that a dress is not selling on her rack, she puts it on and wears it herself. She feels she can sell it off her body better than it languishing on a rack. There is always a great deal of laughter and joy in her shop, and that is truly infectious in helping the customer to purchase a product.