Q&A with Paco Underhill: PMA 2005 Official Business Session speaker Paco Underhill shares...

Paco Underhill, consumer behavior expert and author of "Why We Buy: The Science of Shopping" and "Call of the Mall: The Geography of Shopping," will speak at a PMA 2005 Official Business Session this month. He shared some thoughts on retailing in today's environment with Photo Marketing.

Underhill: Envirosell is the principal testing agency for prototype stores, bank branches, and in-store sections in the world. Last year, we functioned in 26 countries. Our ongoing client mix includes many of the more prominent photo dealers across the globe.

Photo Marketing: How do you conduct the research you do for these companies?

Underhill: We use a variety of different methodologies, from observation, to in-store videotaping, to interviews with customers, sales associates, and managers. We have been doing this for about 20 years.

Photo Marketing: Your first book, "Why We Buy," provides a great deal of insight into consumer behavior. You recently published your second book, "Call of the Mall." Do you consider it a follow up to "Why We Buy?" How does it go beyond your first book?

Underhill: No, "Call of the Mall" is not a follow up. "Why We Buy" talks about the biological constants that govern how we behave in shopping environments. "Call of the Mall" is a funny, dark, walking tour of a shopping mall. It is a narrative book as opposed to business book. It is a satirical treatise on the state of American shopping.

Photo Marketing: How does retailing in a mall setting differ from retailing in another type of location, and how can mall-based retailers take the greatest advantage of their mall location?

Underhill: There is a shift going on between the power of landlords and the power of tenants. Retail chains need to help their landlords go from being landlords to being place makers. That means understanding the public areas and the entertainment complexes in a shopping mall are very critical to a tenant's success--whether that's the nature of the parking lot, where benches are placed, the programming that takes place in a mall, or the visual presence of mall management.

Photo Marketing: What lessons can retailers who are not located in malls take from this book?

Underhill: While the book is set in a shopping mall, it talks about the evolution of American shoppers. Whether it's dealing with the psyche of the older woman or the psyche of teenagers, it isn't meant to be simply about malls. Part of the treatment of the book is you go shopping with a variety of different shoppers in a shopping mall, who shop everywhere else, too.

For example, when we talk about gifting solutions, we have a man running through a mall looking for a gift. A photo marketing group should ask themselves, "How do we give the gift of technology?" Lots of technology purchases right now aren't being made by the end user, but are being passed on to the end user. That means you have to know something about what the appropriate gift is for whoever will receive it. One in six people walking down the concourse in a shopping mall is looking for a gift. If that's true in a mall setting, it's true wherever they are shopping. One key to prosperity is becoming a gifting solution provider.

Think of all the grandchildren born in the past year to an increasingly aging baby boomer population. Think of the digital cameras or the digital video cameras the baby boomers can give to their kids, who are having their first kids. I think this is a key factor for technology--recognizing the power of grandma and grandpa.

Another example is figuring out how to position technology as a female-appropriate gift. A man buys a camera and a woman buys an archive of memories.

Photo Marketing: What are some ways retailers, wherever they may be, can turn shoppers into buyers?

Underhill: Some of it is recognizing the barriers to purchasing: Should I shop somewhere else? Is this going to accomplish what I want to accomplish? Why is this camera $129 and this one is $259?

A key issue, particularly for the brick-and-mortar industry, is realizing the Web offers a very effective method of educating customers before they come to the store. Retailers can take advantage of their websites and the opportunities they provide to inform and educate, as opposed to sell. Educate customers online and close the sale in the store.

Some of it is with clear messaging in store. You also want to have sales help that demographically matches the audience the store serves. If you're a photo dealer, it's very important that all your sales associates are not 22-year-old men.

It's also important to recognize one way to build your ticket price is to price the camera aggressively, and then make sure customers buy accessories that have better margins. Sell the complete outfit.

Photo Marketing: Is it a good idea to try to increase the amount of time consumers spend in your store? If so, what are some ways to do it?

Underhill: In principal, yes--but only so long as that time is spent being engaged, rather than being frustrated or lost. If you have someone wandering around asking for directions, that's a frustrated person.

Having people waiting to see a customer service agent is not a great idea. Long waits at checkout are really poisonous: however positive an interaction the customer has, it can be dissipated at the cash register.

If you want to hold the person in the store, fine--but make sure they're being held for the right reasons.

Photo Marketing: How does assistance from a sales associate affect the average amount a consumer spends?

Underhill: Particularly for a technology purchase, it's critical. A good salesperson matches the customer with the appropriate product. A good salesperson can trade somebody up or just make sure somebody closes. When there is no sales assistance, it's the difference between a conversion rate of 22 percent and a conversion rate that's a more appropriate 50 to 60 percent. For every person who's there buying technology who doesn't need any help, there are three others who do.

Photo Marketing: You have observed countless consumers shopping in thousands of retail environments. What would you say are the most common mistakes you have observed retailers making?

Underhill: First is misunderstanding the role of their front windows. There are many people who put too much stuff in the front windows, or use them to show people they're in stock. You want a single, simple message in your window, and frequent changes.

Second, not establishing a clear circulation route--a logical pathway the customer takes. I want customers to circulate to the right in a counter-clockwise fashion, which puts their shopping hand closer to the product. Controlling that is a store design issue.

Next would be not recognizing appropriate adjacencies--what do I put next to what.

Another big mistake is not recognizing it is just as important to communicate with the customer going from the back of the store to the front as it is from the front of the store to the back.

And finally, checkout is a critical part of the customer experience. Your job is to make it as pleasant and painless as possible.

Photo Marketing: Do you have any suggestions for specialty camera store retailers trying to compete with big box electronics retailers?

Underhill: First, you compete with better service and a more focused offering. Circuit City and Best Buy are trying to deal with everyone. You want to be very specific about with whom you want to deal. A classic way is looking at the professional market in your environment.

The second way is recognizing most Best Buy and Circuit City [stores] don't sell the most expensive, higher-end systems, and you can specialize in them.

Third is recognizing there are segments of the population who aren't comfortable going to a big box retailer, especially older customers. Focus your advertising there. No one at Best Buy is putting ads talking to grandparents in the local paper, but you can. Be specific in terms of what you do with your store and where you put your advertising dollars.

Photo Marketing: You'll be speaking at PMA 2005. What can audience members look forward to learning?

Underhill: I'll give practical advice and make people laugh.

Meet Paco Underhill

Paco Underhill has spent the past 20 years learning why people do what they do--particularly when it comes to consumer behavior. He is managing director of Envirosell Inc., New York, N.Y. (www.envirosell.com), a research and consulting company he started in 1979 to help stores, banks, restaurants and consumer product manufacturers learn how consumers use their services, and way to improve their businesses. Envirosell has offices in Istanbul, Milan, Mexico City, Moscow, Sao Paulo, and Tokyo, and works for clients around the globe.

Underhill is the author of the best-selling book, "Why We Buy: The Science of Shopping," and the newly published, "Call of the Mall: The Geography of Shopping."

Underhill will speak at the PMA 2005 Official Business Session scheduled for Wednesday, Feb. 23, at 7:30 a.m.

Jennifer Barr Kruger

e-mail: jkruger@pmai.org