Why We Buy by Paco Underhill Read Free Book Online

defined carefully or what you get out the other side of the process is gobbledygook. We now have a number of competitors who sell a lower-priced version of what we do. You get what you pay for.

TWO
What Retailers and Marketers Don’t Know
    I t might be useful right about now to pause and look at the science of shopping from the perspective not of the scientist but of the practitioner—that is, the retailer and marketer. He or she is certainly part of the equation we’re studying, the provider of product services and shopping experiences, as it were. The retailer is also the one who’s expected to absorb all our lessons and then apply the principles of what we’ve learned. The marketer needs to understand how his or her product or category of goods is shopped and bought. And since it’s his or her own store we study, it’s fair to ask: How much doesn’t the retailer already know?
    Well, more than you might think. For example, it’s a testament to the until-recently uncharted state of the untamed retail environment that an extremely intelligent and able man, a senior executive in a multibillion-dollar chain, could be so very wrong when asked this simple question:
    How many of the people who walk into your stores buy something?
    You’d know that, wouldn’t you, if you were he? You’d think so, andtrust me, this fellow is no slouch in the knowing department. He knows quite a bit that goes on in his chain’s thousands of stores, and he learns more on a daily basis—genuinely important things like total tickets (the number of transactions and their dollar value), and average sale amount, and sales in any given store compared to sales on the same day the year before, and sales within the various regions, and profitability by item and category and store and maybe even phase of the moon.
    He knows all that.
    When I asked how many of the people who walk into his stores buy something, his answer was: all of them, pretty damn near. And when I say it was his answer, I mean it was also the answer of the huge, PC-networked, data-chewing, number-crunching, cipher-loving organization at his command. Everybody there agreed: What we call the conversion rate—the percentage of shoppers who become buyers—was around 100 percent. After all, this corporation reasoned, their outlets were destination stores, so people didn’t go there unless they had some very specific purchase in mind. Hence, they believed, the only time shoppers didn’t buy was when their selection was out of stock.
    In fact, the very concept of conversion rate, implying as it does that shoppers need to be somehow transformed—“converted”—into buyers, was alien to this man and this corporation (as it still is to many other successful companies and executives).
    I was asking the question because we had just performed a large-scale study of this chain’s stores. And I knew the conversion rate, based on our having spent hundreds of hours counting, among other things, the number of shoppers who entered and the number who made purchases. It was a very good conversion rate for stores of this kind. But it was about half of what this man thought it was. To be precise, 48 percent of shoppers bought something.
    The man, because he believes in the value of information, was taken aback but eager to hear more. Some in his organization, though, were incredulous, outraged, insulted, and certain that we had made a terrible miscalculation. So they performed their own homegrown version of our study, standing at the door of a store or two, counting the number of people who went in and the number who emerged holding bags.
    Their result was identical to ours. Which, in the end, was very positive news for them. It meant that a good company could change some very specific things and become even better. If you talk to the executive, he’ll say that our study brought about “a fundamental change in some