Why We Buy (6 page)

Cosmetics and beauty product firms don't usually want to occupy the first counter inside the entrance of a department store's makeup bazaar—they know that women, when reinventing themselves before a mirror, prefer a little privacy. That's not the only reason to wish for a little peace and quiet. If you were one of the two major players in the home hair coloring market, you'd want the best position possible in drugstores. Now, young women tend to buy hair color as a fashion statement—they've decided to go red for prom or they've been dreaming of that little extra glamour that being a platinum blonde creates. Older women, however, buy it as a staple—they've been using a particular color for fifteen years now, and more gray is coming in every day, so it becomes as regular a purchase as soap. As a result of that difference, older shoppers just find their color, grab it and go, while younger ones need to study the rack and the packaging awhile before they buy. In one study we performed for a shampoo maker, we found that older women shop for one third fewer products than their younger counterparts, 2.2 to 3.3. And so in a store where younger shoppers predominate, hair color will do best away from the bustle and the crowding, which usually means away from the front of the store. If most shoppers are older women, however, closer to the entrance is better for hair color—these shoppers won't be browsing for long anyway.

Finally, there's a famous (around our offices) story about a very elaborate and costly supermarket display for chips and pretzels—a handsome fixture featuring the cartoon character Chester Cheetah, who, aided by a motion-detector device, would say, “If you're looking to feed your face, you're in the right place,” every time a shopper walked past. Frito-Lay, the fixture's owner, paid a great deal of money to have the displays stationed up front in supermarkets. They were effective—so much so that the greetings ran constantly, which soon maddened the cashiers who had to listen to the drawling voice for eight hours straight. Before long, at least one market's employees solved the problem neatly—they disconnected Chester, rendering him instantly agreeable but forever mute.

I
t's a chilly day and the shopper is a woman. What does that tell us?

It says that at the very least she's carrying a handbag, and that she's wearing a coat, which she'll probably want to remove once she's inside the store, meaning she'll have to carry that, too. God gave her two good hands. But she's shopping with one.

If she selects something, the free hand carries it. Now she's down to no hands. Maybe, if it's small and light, she can tuck the purchase under one arm. Perhaps she'll sling the handbag over a shoulder or forearm. Then she'll have…let's call it a hand and a quarter. If she picks one more thing, though, she'll run out of hands. Only an extremely motivated buyer will persevere. Human anatomy has just declared this shopping spree over.

This is a classic moment in the science of shopping. The physical fact (most shoppers have two hands) is fairly well known. But the implications of that fact go unimagined, undetected, unconsidered, unaccommodated, unacknowledged. Ignored.

The hand-allotment issue came up early in the science of shopping.
It was the late '70s, and I got a chance to pitch what I do to Eastern Newsstand, the largest operator of newsstands in North America. Boy—talk about a tough business. Long hours, early morning deliveries, plus a complicated system of returning all the papers and magazines that don't sell. My girlfriend at the time knew the wife of the boss, and I got my loafer inside the door as a cocktail-party favor, if memory serves. They treated me okay, but I remember they started off pretty skeptical, and who can blame them?

I did the work as a freebie. Though I wasn't paid, the experience taught me plenty, and it also set me up with the Newspaper Association of America, or NAA, with whom I've had a rewarding relationship for more than a decade.

The site they assigned me was a newsstand at that great crossroads of humanity, Grand Central Station in New York City. We pointed our cameras at the stand and watched it during the busiest times, the morning and evening rush hours.

The success of the business depended on one crucial task—the newsstand's ability to process large numbers of transactions during the periods when everybody is in a hurry, either rushing from train to job in the morning or from job to train at night. Commuters on the run glance over at the newsstand to see how crowded it is. If it looks as though they can breeze in, buy a paper or magazine or cigarettes or gum and then be on their way, they'll stop. If it looks swamped with customers waiting to pay and nervously checking their watches, they'll keep going. They'll say to themselves, “Too much of a hassle, I'll miss my train, it'll be faster to get it elsewhere.”

The other related fact of newsstand life we noticed was that every customer had one hand already occupied, either with a briefcase or a tote bag or a purse or a lunch. Almost no one goes to work empty-handed nowadays. When you think about it, it's a rare moment in the modern American's life when both hands are completely free. Yes, we have backpacks and messenger bags, but those simply allow us to turn ourselves even more into pack animals. Add to the mix a mobile phone, a coffee cup or the occasional ice cream cone, and in most commercial settings, at least half the people you see are moving with only one hand
free. I might even venture to say that finding yourself with both hands free is a little disconcerting, as we immediately think we've left something behind.

The second (and kind of seminal) observation we made was painfully simple: Since 90 percent of us are right-handed, we use our left hand for carrying stuff, or our left shoulder for a shoulder bag—which frees up our right hand for grabbing. Pause for a minute. Let's assume you're reading this book while sitting in an airport waiting to board a plane. As you stare at the concourse, take a quick poll of right-versus left-handed luggage or briefcase carriers. It should be about six to one. The reasons why we might carry a bag in our right hand may be based on weight, size or some other environmental factor. Eliminate those, and the ratio might be even bigger. So whether you're selling newspapers, trying to get someone to pick up a brochure or designing the check-in desk at an airport or rental car location, a right-handed bias has significant implications (apologies to all you southpaws out there).

The final factor in our study was the stand itself, which was of typical design—a low shelf where the day's newspapers went, above which were racks for magazines, above which were shelves holding candy and chewing gum and mints, and inside the circular structure, above it all, the cashiers.

Thanks to the videotape, we could break each transaction down into its smallest components. Here's what we saw: Carrying your briefcase, you'd approach the stand, bend and pick up, say, a newspaper. Then you'd straighten up and brandish the paper so the clerk could see your choice. At that point you'd either put your briefcase on the floor or you'd put the paper under your briefcase arm, and, with your free hand, you'd hold out the money. (If you were a last-minute type, you'd have to reach into your pocket, find the money, and hand it over.) You would then stand tilting slightly toward the clerk, waiting with free hand outstretched for your change. The change goes into the pocket and you pick up your briefcase—or the paper goes from the briefcase armpit to the free hand—and then you turn and depart, squeezing through the rest of the throng trying to buy something.

The stand's designer obviously believed that the best possible
structure was the one that displayed the most merchandise. Maybe the stand's owner believed that, too. But from the customer's point of view, the design was all wrong. There should have been a shelf at about elbow height—someplace where customers could rest their briefcases or purses or purchases while digging out their money and waiting for change. A counter, in other words.

Instead, the only shelf was at about shin height, which displayed newspapers just fine but turned each transaction into an awkward ballet starring a tilted one-handed commuter. As a result, the typical purchase involved more steps than were needed and so required more time to complete—even split seconds add up—which in turn limited the number of transactions possible during rush hour. Which caused congestion, scared away customers, and ultimately cost the newsstand sales. A better design—one that took human anatomy into consideration—might have displayed less merchandise but accommodated more customers.

Almost thirty years ago, when I presented that study to a bored audience of newsstand executives, I got back the blankest of stares. Sometimes I wonder today whether if I'd taken it several steps further and done a calculation on lost revenue, or did a simple sketch and proposed a test, I would have gotten any more traction. In retrospect, one of the most important things to learn is this: How you present your ideas and information is just as—or more—important as the ideas themselves. Our present-day maps, charts, diagrams and Photoshopped pictures, along with video clips, help frame what we do and what we think our clients can do with this information. I believe passionately in edutainment—whether in front of a business audience, a classroom of students or a crowd of parishioners at church. Laughter and knowledge combined make up one powerful cocktail, and if you can mix in some pictures and images, all the better.

We've done studies on fast-food restaurant drive-thrus and worked out the same equation. The speed of transactions is especially important at drive-thrus because the line of cars is so much more apparent to potential customers than the line inside the restaurant. Particularly in North America, where the steering wheel is on the left, we use our left hand to grab our burger and fries and pay at the payment and pickup
window. A ten-second reduction in average transaction time during a busy lunch rush contributes almost immediately to the bottom line.

That woman I began this chapter by describing could have been shopping at a big discount drugstore like Walgreens. It was during a study we did for one such chain that we thought of one simple but very effective solution to the hand shortage.

The eureka moment came on a sultry August night in my office as I listened to the Yankees on the radio and watched videotape of people shopping in the drugstore. I was viewing footage from the camera we had trained on the checkout line, witnessing a shopper trying to juggle several small bottles and boxes without dropping any. That's when it dawned on me: The poor guy needed a basket.

Why hadn't he taken one? The store had plenty of them, placed right inside the door. Maybe people don't associate drugstores with shopping baskets. Perhaps they come in thinking they need just one or two items and only later do they realize they should pick up a few more things. The biggest culprit, of course, was the decompression zone—the baskets were so close to the entrance that incoming shoppers blew right by without even seeing them down there. I immediately began to scan all three days' worth of checkout line video and saw that fewer than 10 percent of customers used baskets, meaning there were quite a few amateur jugglers shopping at the store. And I thought,
If someone gave these people baskets, they'd probably buy more things! They wouldn't buy fewer items, that's certain.
But here we were, allowing the arm and hand capacity of human beings to determine, ultimately, how much money they spent.

We suggested that all drugstore employees be trained to offer baskets to any customer seen holding three or more items. My drugstore client gave it a shot. And because people tend to be gracious when someone tries to help, shoppers almost unanimously accepted the baskets. And as basket use rose instantly, so did sales, just like that.

We've made a direct link over the years between the percentage of shoppers using a basket or a cart and the size of the average transaction. Want people to spend more money? Make sure more of them are using a shopping aid of some kind. For a while the merchant community got
the message but didn't quite grasp the subtext. What happened is the carts got bigger. From Wal-Mart and Target to Carrefour and Auchan in Europe, grocery carts swelled in size. In 2006, we noted that all across the world, whether in supermarkets, hypermarkets or mass merchant stores, the number of people using carts and baskets declined. “I'm just running in for a few things,” people told themselves.
Not
taking a cart or a basket became a way for the customer to define his or her mission. And if customers were just running in for a few things, they didn't want to drive a Mack truck (read: large cart) up and down the aisles of the store. The problem was that shoppers picked up a few things, then found themselves face-to-face with the wine aisle, and look! there was their favorite pinot grigio on sale, two for one, and…now what do they do?

Our answer? Give customers a shopping aid strategy right at the door, when they first come in. Cart or basket? Then place other shopping baskets at strategic locations throughout the store. If no one bites, try another location. (We also recommend getting away from those Little Red Riding Hood plastic baskets. A great basket is one that a customer wants to either buy or steal. In this case, neither applies. Plastic baskets are clumsy and not very attractive, and for guys who don't see themselves making their way to Grandmother's house, they're almost an affront to masculinity. Plain and simple, we just need a better basket.)

Quite a few malls and stores have added carts with definite kiddie clout. You get the basket on top, while your junior Dale Earnhardt gets to sit in a model racing car below.

Earlier this year I was reviewing a new prototype Spar store in a train station in Milan, Italy. Spar is a European convenience store chain, like 7-Eleven in the U.S. You find them throughout Europe and in many emerging markets that were once European colonies. I was there with the president of Spar Italy. It was a good store. All across Europe, food-shopping in commuter train stations has taken a massive turn for the better. While the food offerings at Grand Central Station in New York are impressive and very high-end, and the small farmers' markets that have attached themselves to the BART stations in the East Bay of greater
San Francisco are a step in the right direction, the food offerings at the Gare du Nord in Paris, Helsinki's Central Railway Station in Finland and almost any train station in Japan put their North American counterparts to shame. They're good, affordable and generally fast. In a train station, however—unlike an airport, where we shop because we're trapped—speed is critical. As a customer, your train is coming any minute, and you need to get in and out. But from the merchants' standpoint, what's important is to build the ticket or transaction. Thus, anyone shopping without a shopping bag can only buy so much.

The president and I spent about an hour walking through the Milan Spar. As I say, I liked the place a lot. It had great vegetables, a juicing operation and a small bakery. Problem was, all of the baskets were clustered by the front door. He asked me what the store could do to increase performance. “Watch me,” I said. I grabbed three baskets and moved through the store. Each time I found someone with their arms full, I offered them a basket along with a nice smile. No one turned me down.

There are moments in this business when you see the lightbulb flick on in people's minds. You can kick around simple ideas all you want, but watching one happen in real time brings it all home. I'd seen the president smile over the course of the hour we'd spent together. But at that moment, for the first time I saw him
grin.

As the science of shopping evolves, my number-one worry is that as we fall further in love with technology—with that sensor on the shopping card, with the software package that hooks up to a store's closed-circuit cameras—merchants get duped into believing that sitting behind a desk staring into a computer screen is an acceptable replacement to getting out on the floor and taking a good look.

In a very successful bookstore near my office, a pile of shopping baskets sits in the usual erroneous place—in a corner just inside the door. Judging by where the baskets are kept, you'd think that retailers think that shoppers enter bookstores saying to themselves, “Well, today I plan on buying four books, a box of arty greeting cards and a magazine, and so first thing I will take a basket to hold all my purchases.” But common sense tells us that people don't work that way—more likely somebody walks in thinking about one book, finds it, then stumbles over another
that looks worthwhile. In such moments the very heart of retailing lies. For many stores, add-on and impulse sales mean the difference between black ink and red.