I recently came across two interesting books for anyone in a retail business. Those on the supplier side also may find the information useful.
The first is Shoptimism: Why the American Consumer Will Keep On Buying No Matter What, by Lee Eisenberg. Eisenberg is the former editor-in-chief of Esquire, but he also spent time in the retail world as an executive vice president at Lands’ End.
The second book is Predictably Irrational: The Hidden Forces That Shape Our Decisions, by Dan Ariely. Ariely is a behavioral economist, pioneer, and something of a rebel in a field dominated by scholars who believe numbers never lie and are all that’s necessary for a thorough understanding of the marketplace. Ariely points out that while economics may be rational, people aren’t—and that the disconnect is greater than one might think. This is why certain business strategies work well while others, which seem foolproof on paper, don’t work at all.
This month we’ll examine Eisenberg’s perspective; next month Ariely’s.
I bought Eisenberg’s book last fall, just as the U.S. was (at least numerically speaking) emerging from the Great Recession. In the foreword, Eisenberg explains how the entire consumer landscape had changed drastically between the time he began and finished writing the book. As we know, much of the rampant consumerism of recent years was fueled by perceived wealth in home and stock market valuations, not real wealth. When the markets fell and that veil of equity was stripped away, consumers felt poor (even if they weren’t) and reined in spending.
But by holiday 2009, some of the panic had begun to ease, and consumers began trickling back into stores, reopening their wallets, and reawakening to the joys of America’s favorite pastime, shopping.
If we are born to shop, Eisenberg points out it’s not by chance. His book is divided into two parts, one focused on the Sell Side and one on the Buy Side. In the Sell Side, we discover that the efforts to which marketers go to induce us to buy constitutes a vast, well-oiled, powerful set of forces—advertising, branding, imagery, pricing trickery, vanity sizing, societal pressure—that all but the most dedicated ascetics are practically powerless to resist. In difficult times, most shoppers will make tradeoffs, trade down, or simply wait till they’re feeling flush enough to again buy what they truly desire, but ultimately the steady drumbeat of “buy, buy, buy” does strike the necessary chord and back to the stores we go. A need, he says, is often just a want looking for an excuse to buy.
In the Buy Side of the book, we learn more about the psychological drivers that make people respond to the Sell Side machine. With no shortage of finger-wagging scolds admonishing Americans to abandon their acquisitive ways, one would think nobody in the United States was capable of self-reason.
Not so, says Eisenberg. The prevailing wisdom seems to be that our choice of a specific brand or specific store not only reflects our personalities (or the personalities we’d like to have) but also creates a bond with others who have the same preferences.
Take computers. There are Mac people, and there are PC people. Mac people (disclosure: I am one) tend to be intractable—dare we say smug—in their belief that theirs is a superior computer to the mundane PC. But does loyalty to Apple mean only a desire for a better computer, or is it a means of belonging to a certain community? Instead of being, say, a Rotarian, are we now an Apple?
With many of the traditional ties that glued a community together slowly dissipating—ethnic enclaves, local merchants, relatives who lived down the street—in some ways brands have stepped in to replace these institutions as the glue that binds us. (So has Facebook, but that’s another topic entirely.)
What Eisenberg is saying is that while there certainly is a powerful marketing culture in the United States, it’s not necessarily a bad thing, and that you as a marketer may be fulfilling far more than just the customer’s need for a piece of jewelry. Most independent jewelers already know this, but it’s interesting, and, I suspect, more profitable in the long run, to understand why.