Winning the Retailing War

lfrederick@cahners.com

You hear lots of gloom and doom about the future of the independent jewelry store, but I can point you to an expert who would say it’s way overdone. He’s Paco Underhill, author of a fascinating new book called Why We Buy (Simon & Schuster, 1999).

Underhill is a retail anthropologist, which means he studies how shoppers react to a retail environment. I’m not using the word “study” lightly. He may not go as far as Margaret Mead in his pursuit of verifiable facts—she lived with her subjects when she wrote her famous book, Coming of Age in Somoa—but Underhill is astonishingly nosy. For the past two decades, he and “trackers” from his consulting firm have been lurking in hardware stores, supermarkets, and bookshops all over America, videotaping or noting shoppers’ every move—what they look at, what they pick up, where they walk within the store, whom they talk to, etc. They treat shopping like a science and produce reports about customer behavior that businesses can use to increase sales.

You’d think the shopper would be king in America—capitalism’s most successful realm—but you’d be wrong. In his book, Underhill describes a litany of merchant miscues that add up to a sort of shopping hell. Goods are shelved out of reach. Signs are unreadable or out of date. Salespeople are uninformed, surly, and slow. Restrooms, if you can find them, are small and dirty. Dressing rooms are grungy and badly lighted. Merchandise is arranged haphazardly.

If you read his book closely, though, the news for jewelers isn’t bad at all. In fact, it’s downright encouraging. Yes, for jewelers as for every other retailer, shopping is a battlefield. But Underhill finds that the small, locally owned store can compete successfully with the national chains and department stores. The reasons are several:

  • Given a choice, “people will shop where they feel wanted, and generally they’ll pay a little more for the privilege,” Underhill writes. “Even the smallest stores can build loyalty by making their customers feel special.”

  • When service is poor, shoppers will find another store. “Bad service undercuts good merchandise, prices, and location almost every time,” Underhill and his team found. So much for all those “30% off!” sales at the shopping malls. “Regardless of how practical an activity like shopping seems,” Underhill continues, “the shopper’s feelings always come first, and feeling good is always better than feeling bad.”

What makes a shopper feel bad? Waiting in line at the cash register, being unable to get information, and feeling rushed or ignored are among the most common culprits. I’d bet the chances of enduring these annoyances are much greater in the department stores and chains than they are in the independents.

  • The amount of time a shopper spends in a store is the most important factor in determining how much she or he will buy. Over and over again, Underhill found a direct relationship. And how do you get shoppers to stay longer? The best way is simple, Underhill reports: Talk to them. Talking almost invariably draws a customer in closer.

Again, score one for the small jeweler. Who is more likely to engage a customer in conversation—an underinformed sales associate on the job for two months (have you noticed the incredible turnover at the department and discount stores?), or a dedicated professional like you who regards customers as friends?

But what about home shopping on TV and the Internet? If the big guys don’t wipe out the independents, these new forms of commerce will, say the pessimistic futurists. Nonsense, Underhill would respond.

We live in a “tactile-deprived society,” he observes, and shopping is one of the few chances to experience the material world firsthand. Almost all unplanned buying is a result of holding or trying on something. That’s why merchandising can be more powerful than marketing, and why the Jewelry.coms and the QVCs will never seriously challenge real jewelry stores.

Yes, a fierce retailing war is being fought throughout America, but the outcome is far from settled, at least in jewelry. Underhill’s unspoken message is that if the independents lose, they will have no one to blame but themselves.