Ambar Singh Roy

Paco Underhill, "the world's only retail anthropologist," shared his views on the future of retail, the science of shopping, what consumers need, and much more, during his recent visit to India.

Paco Underhill, MD, Envirosell, at `Retail 2005', recently organised in Kolkata

HIS clients include big names such as Saks Fifth Avenue, Starbucks, Citibank, Gap and the US Postal Service. For several years now, "the world's only retail anthropologist" has been advising Fortune 100 companies on the behaviour and motivations of contemporary consumers. Paco Underhill has been the first social scientist to apply tools of behavioural research to the retail environment. Books written by him include Why We Buy and Call of the Mall. Over 20 years ago, Underhill founded Envirosell, a research and consulting firm that follows 50,000-70,000 shoppers annually through their retail experiences in stores, banks and public spaces. On his first visit to India, Underhill enthralled a packed audience at Retail 2005, an exclusive conference on retail and retailing activity in the Eastern region that was recently organised in Kolkata by the Confederation of Indian Industry (Eastern Region). In presentations spread across different sessions throughout the day, Underhill spoke on the future of retail, the science of shopping, understanding consumer needs, changing consumer patterns, customer experiences, the need for creating a comfortable shopping experience and opportunities for add-on sales. He later led a discussion on consumer insights with other participants such as Kishore Biyani of Pantaloon Retailing, B. S. Nagesh of Shoppers' Stop, Bijou Kurian of Titan Industries and Rama Bijapurkar, strategic marketing consultant, among others.

The researcher in Underhill has been a keen observer of consumer behavioural patterns in different parts of the globe. Over the years, his experiences have shaped his opinions on retailing the world over. He is firm in his belief that while our shopping habits are in "transition," 20th century tools of advertisements and sales promotion have become "rusty."

Today, two-thirds of the world's retail spending by the middle class is "unplanned" even as the retail culture is cluttered and ill-focussed. "We have too many places to shop and we are experimenting with formats. There is no real innovation," he said.

According to him, the retailers of today are faced with several challenges. They have to cope with demanding customers who want service at a particular price. With the social stratification of retail being a thing of the past, retailers have to now cope with generational and gender differences. Today, as men shop for themselves, the generational differences are all the more apparent. Label and content reading is on the rise even as food and apparel have lost wallet-share to technology. Today, the new necessities of life are mobile phones, cable, Net access, and so on. The rising costs of housing and healthcare have altered people's budgets.

Demonstrating videotapes before the audience, Underhill underscored the significance of convenience and value. He spoke of how to fit a retail format in the multi-tasking lives of this day. It has been proved that design alone is not enough, since most of the fastest-growing retail channels in the West are anti-design. For him, value is not just about price but time saving and the quality of the shopping experience. While being bigger may not necessarily be better, being nimble often works. Deep discount is on the rise and about 10 per cent of the customers are today walking out of mass stores empty handed.

Underhill said that despite the growth in retailing globally, most of the distribution channel growth comes from mom and pop stores. Trends indicate that, for global consumer product companies, most of the growth will come from emerging markets. It will, thus, be imperative to look for retail ideas in markets "where money is young," such as Moscow, Dublin, Sao Paolo and Mexico City.

To mall owners in India, he had a word of advice. "Owing malls is not just about real estate and collecting money. There are issues pertaining to security and amenities. The health of a mall is greatly dependent upon the complete experience of the customer," he said, adding that those in operations, product design and marketing must work in unison. Mall owners must realise that there is a direct linkage between amenability and profitability. For example, in Japan, some stores have more light directed at the floor for the facilitation of the elderly. In some stores in Texas, the store staff carry stuff purchased by the elderly to their cars and even refuse to accept any tip for the service. Escalators in some malls move at a slower pace at certain times of the day, when most elderly people are among the visitors.

For merchants, it would be in the fitness of things to leverage new technologies — such as e-mail — to get closer to the customer. However, in retail, it would be better not to have technology than to have technology that does not work. Collecting numbers in retailing is easy. "The difficult thing is what we do with these numbers and whether we understand their implications and impact." The focus should be on "actionable information and not just data."

Merchants must focus on in-store communications and understand the purchase cycle of the products they offer. They must look at new tools to get closer to the customer. They would need to understand functionality and respond to it by inventing processes. For example, it would augur well for them to realise that the design equity of a signage is dependent upon the height at which it is placed. "Let's talk the language of our customers, not our own," he said.

For Underhill, localisation is an important determinant of success in the retail spectrum. As such, India and China will have to stop looking at retail models in North America and Europe for ideas. In a nutshell, "retailers must stop offering Shanghai in Mumbai," he said.

According to him, the Indian retail mall community has a bright future with an "educated, motivated and young workforce" that is willing to pursue a career for a price that is reasonable.

Asked about the next book he's working on, Underhill said with a smile on his lips: "It's titled Worshipping of Goddesses. And it reflects upon the changing status of women in a commercial environment." And what could be the flavour of the book, which is slated to hit the stores by 2007? "It is insightful, dark and, occasionally over-aggressive."

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