The Science of Shopping. What Business Needs To Know

By Diane Merlino

Paco Underhill has been described as a pre-eminent shopping anthropologist who analyzes businesses based on environmental psychology and a model of aesthetics rather than traditional economic models.

He’s been at it a long time. More than 30 years ago, Underhill established the first iteration of Envirosell, a New York-based behavioral research and consultancy firm focused on commercial environments. He currently heads up the company as founding president and CEO.

Underhill’s unique approach and its practical application in the international retail arena resulted in his first book, Why We Buy. The Science of Shopping (Simon and Schuster). An internationally recognized bestseller, the book has been published in 27 languages.

Underhill’s work blends his background in environmental planning, work for the non-profit group Project for Public Spaces, and his experiences as the son of a diplomat living in a wide array of cities throughout the world.

How did that background lead to a career focus on shopping behavior and research? 

“Accident, pure unadulterated accident,” Underhill told Travel Weekly PLUS. “If you’d asked me 30 years ago whether I would be viewed as an expert on how you sell lipstick or the dynamics of a fast food drive through, Paco Underhillor would consult with major travel companies on points of service there, I would have asked you what insane asylum you escaped from. But part of what happened to many of us in the latter half of the 20th century is we cast our fate to the wind, and it took us where it took us. And this is where I am.”

It’s a unique vantage point to observe the dynamics of buying and selling, of customers and businesses. While the majority of Envirosell’s clients are merchants and marketers, "we also work for hotel chains and some cruise ship companies,” Underhill said. “We’ve done a lot of work on points of service in the travel business, and how they can work better.”

Underhill spoke with Travel Weekly PLUS Editor in Chief Diane Merlino about game-shaping trends and changes in the wide world of buying and selling.

What are some of the key issues you’ve identified from the way you study and research shopping worldwide?
We look at the biological constraints that govern how we move and interact with things. And within the context of those biological constants, we look at the trends and influences that mark change. So whether we’re working in a Nissan dealership in Osaka, an Adidas store in Beijing, a bank in Singapore, a supermarket in Delhi, a shopping mall in Istanbul, or a mass merchant in Bordeaux, all over the world we have things that bubble up in every job that we do.

The first issue is that our visual language is evolving faster than our spoken or written word. And that is because, thanks to the Internet, thanks to movies, the connection between our eyes and our brains has never been better. So one of the challenges we face — in the physical world and in the online world — is understanding how we see and how we process information. That relates to the placement of signs, it’s about how we manage where people look and what we get from it, and what they get from it.

How about the online space, which virtually all travel suppliers and retailers occupy?
Part of the challenge there, particularly for the travel industry, is the difference between the novice, intermediate and expert user. All of them are surfing or using the net as a way of trying to access information and being able to understand what their options are.

Virtually every business is cognizant that the point of access has gone from a desktop computer to a laptop computer to a smart phone or tablet. And as a result, the appetite for consumption — but also the physical design of the site itself — has evolved drastically over the last ten years.

Part of what this means is that there’s a certain measure of chaos and there’s a great deal of noise online. Finding a way to get through that chaos and noise is a critical part of gaining people’s confidence, because the Internet propagates the protocols of Zion with the same weight that it propagates the psalms of David. Meaning that everything, to a certain extent, has similar weight online, whether I’m Norwegian Cruise Lines or I’m a charter company working out of the Turks and Caicos.

What other challenges do travel companies face in the online selling space?
The other piece of the problem is the curatorial nature of the online space. There is a difference between someone traveling on a Disney cruise ship, and somebody traveling on a Seabourn liner; the rhythm and customer base that those companies are chasing is so radically different.

And if you get the wrong customer on the wrong ship, or you get the wrong customer in the wrong hotel, the experience is utterly and completely miserable. And now the problem is that that miserable customer has an audience or platform to be able to communicate that misery in a way that can often be very poisonous. The people who do the posting on social media, are either doing it because they had a very good experience, or they’re doing it because they had a very bad one.

So companies have to manage their social media presence in an activist way, to see if they can seek out and solve problems in a way that turns people from complainers into advocates.

Have you found that most companies you’ve worked with manage their social media presence pretty well?
I think that the clumsiness with which some corporate bodies have approached social media has burned them.

We’ve seen lots of examples of it. One recent one was with a very upscale English grocery store chain that had a social media program saying, ‘I shop the store because …’ and people filled in the blanks. For everyone who said, ‘I shop the store because it’s gorgeous and it smells good’ there was someone else who said ‘I shop the store because there’s no poor people there.’

McDonald’s set up a social media program and found that lots of people used it as a way of dissing bad burgers and bad hygiene, or the implied relationship between the food and obesity.

You’ve worked with all types of businesses all over the world. What insights from those experiences can you share with U.S. travel companies?
One issue is, what is global and what is local? If you are operating a hotel in New York City, and in Chicago, and in the Bahamas, you may have the same brand but some of the execution of that brand, and the nuances of that WhyBuybookexecution, have to be based on what the local experience is.

The point here is that we no longer live in a place where money is dominated by peaches and cream. In our global economy, wealth has a wide variety of skin tones and that we have to be very cognizant of that.

Many travel companies based in the U.S. have a growing base of international customers. What should they keep in mind?
I think there are a couple of issues here. First of all, there are things that new money understands; they understand how to buy cars, they understand how to buy real estate. They’re less comfortable with many of the aspects of both luxury travel and luxury goods. That means as we work with our luxury goods clients, we will often have to provide an education before making the sale.

There may be a portion of your audience that understands the difference between a four star, five star and seven star hotel, but there’s also a portion of your audience that could afford a five star, six star or seven star hotel that doesn’t get it. It isn’t just talking about your sumptuous sheets and your exquisite service; it’s about actually trying to describe what the difference is, why this costs one price and why something else costs a different price.

Are there any other key differences?
Another theme is that people in emerging wealth markets often want a collective deal. That means I am traveling with six people, not one, and please provide me an experience that is seamless and doesn’t give me surprises or embarrassment.

That may mean that service charges are included, it may be that there are no extras added to my bill. Or, it may be that you recognize that Westerners may travel as a couple or as a nuclear family, but I’m often moving in a family group that may involve more than two generations.

This issue relates to hotel room design or the way hotel rooms can be grouped. It also lends itself to a broader package. There are tour operators in Brazil, for example, who are sending people to Florida with packages that include hotels, airfare, cars, transfer coupons to go shopping. And sometimes, a personal shopper to be able to help them along their way.

Cathay Pacific, for example, sends its business and first class travelers an extensive explanation of their duty free offering before they get on the airplane. When we work with our cruise ship clients, tell them that the degree to which they can answer questions or provide information, particularly to a non-Western customer, is a way of insuring a certain degree of loyalty and a better complete experience.

The Envirosell Approach

A quick overview on the science of shopping, from Paco Undershill:

“As someone who does a lot of work in retail, I recognize that the truth is transitory, meaning that what made a good store in 1990 and what makes a good store in 2012 are different, and those differences are often a reflection of our evolution. I think retail is often a great dipstick to social change.

We have been working on the science of shopping at Envirosell for more than 25 years, and we use a wide variety of methodologies. Certainly in 2012 one of the things that we’re very cognizant of is that we have to use our dipstick in as many ways as possible.

Among the palette of choices is observational research, where we actually send someone out to the point of service, the point of contact, the point of sale, to stand there and watch our follow customers as they do what they do. At the same time, we may install video cameras to be able to record traffic patterns. We may interview customers as they’re entering or leaving, and look at the differences between what they said they’ve done and what we’ve perceived them to do. Clearly, what we say we do and what we actually do is often quite different.

We have also developed telephone apps, which we can give to select customers to let us understand what they see and how they see it. Our telephone apps may be used by shoppers, or by citizens of a particular district. The app may be distributed online, or downloaded at a check-in desk. It allows customers to tell us what they’re seeing and hearing, both visually, in terms of pictures and videos, and with commentary.

We also run a very extensive ethnography program, where we go to people’s houses and have them give us a tour of their kitchens, their bathrooms, their technology centers. They may share with us who gets what, or they may open up their computers and show us how they surf the net.

We are very cognizant of the fact that in 2012 it is very easy to collect information. What is tougher is being able to turn that information into actionable steps that someone can use for both immediate and long term planning.”

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