Why We Buy (25 page)

Until then, though, merchandising was the stepchild of the marketing trade. The marketing geniuses called all the shots for how a product would be presented to the world, and the boys in merchandising were left to work out the petty details of how it would work at the retail level—the in-store signage and displays. Then the two sides began to change places. Suddenly, retailing realized that to a growing extent, shoppers were making their buying decisions on the floor of the store. As was noted elsewhere, surveys showed that more than half of all supermarket purchases were unplanned. And this all happened as
marketing's influence was coming down from its peak—the monolithic TV networks gave way to many viewing options, and consumer devotion to brand name yielded to a more skeptical, independent-minded shopper. That all added up to more of a dependence on merchandising, which led the industry to grow from a $5-billion-a-year pushcart to a $35-billion-a-year roller coaster almost overnight. Traditionally, it's been a business of smallish (and now some not-so-small) family-owned firms, meaning it's been short on sophistication and long on guts, verve and energy. It's a cowboy business, and I mean that in the best way. Owing to its youth, there are still lots of lessons its practitioners are learning, and they have to learn as they go. In fact, a great deal of our work in the past two decades has been just in testing and measuring the effects of in-store signage, fixturing and display systems, trying to figure out what works and why.

Here's a good example of the terrible magic that smart merchandising can perform. I once heard a talk given by the vice president of merchandising from a national chain of young women's clothing stores in which she deconstructed a particular display of T-shirts. “We buy them in Sri Lanka for three dollars each,” she began. “Then we bring them over here and sew in washing instructions in French and English—French on the front, English on the back. Notice we don't say the shirts are made in France. But you can infer that if you like. Then we merchandise the hell out of them—we fold them just right on a tasteful tabletop display, and on the wall behind it we hang a huge, gorgeous photograph of a beautiful woman in an exotic locale wearing the shirt. We shoot it so it looks like a million bucks. Then we call it an Expedition T-shirt, and we sell it for thirty-seven dollars. And we sell a lot of them, too.” It was the most depressing valuable lesson I've ever had.

Car dealerships aren't anyone's idea of how merchandising is supposed to work, which makes them good lessons in what not to do. We studied a foreign car dealership that was practically a college course in itself. The salespeople would load shoppers down with literature but fail to give them folders, so you ended up walking around that showroom, arms burdened with pieces of paper. There were plenty of brochure racks but no brochures, which is a problem, not because shoppers love
pamphlets so much, but because empty literature racks give shoppers the (correct) impression that the details don't get taken care of in this place of business. One-sided posters were taped to exterior and interior windows, meaning that shoppers frequently found themselves staring at blank white rectangles. In one dealership, as I mentioned earlier, we saw a sign heralding the new cars—the previous year's new cars. The signs that did receive prominent placement were “awards” to the dealership from the car manufacturer—just the kind of thing to leave shoppers yawning. The display that showed buyers available colors was a real mess—the spiral-bound portfolio was held together by duct tape. And instead of being able to see a picture of the car in each color, shoppers were given a tiny swatch book more appropriate for choosing drapes. Signs meant to hang over cars were placed on tables instead. Some favorable auto reviews were clipped from newspapers, but they were simply taped to walls rather than displayed properly. Some of the articles had begun to yellow and curl up. And all this to support merchandise costing $20,000 and up!

Retailers aren't alone in screwing up the design and deployment of merchandising materials. Many times the firms that design and make them (and sell them to hapless retailers) screw them up before they get to the floor of the store—simple things, too, like using displays made from uncoated cardboard. We saw one such fixture, for sun products, arrive in a big drugstore on a Friday night. It hit the floor immediately and sold well. Then the cleaning crew came in and, as cleaning crews will do, mopped the floor without moving all the fixtures and displays to one side. The base of the suntan lotion display got a little wet. By Saturday afternoon it was listing. After the floor was mopped that night, it had begun to tilt seriously. By Sunday night it was in the trash.

Often nobody has devoted any thought to the question of what a display will look like when half the merchandise is gone. Will what remains look like a hot item, or will it look unattended and forlorn? Some of this has to do with what shoppers see after a ketchup bottle or whatever has been removed—will brown kraft paper be visible, or will there be some kind of message or a photo of the bottle? It makes a difference.

And other questions: Can you read it from twenty feet away? If it only works when you're on top of it, it seems to be doing only half a job. Is the back of it blank? The sides, too? Because the designer of that display has no idea how it will be positioned in a store and so can't really be certain which surface shoppers will see first (if any).

Endcaps and freestanding displays are staples of American retailing. Some of them succeed and some fail, depending on how they work once they are placed in the store. As with signs, you can't say which are good and which are not until you see them in action. The latest trend in displays is the so-called activated fixture—one that uses movement, especially moving lights, to get the attention of shoppers. Our testing of types of fixtures has yielded some impressive results: In soft drink coolers, the activated version was noticed by 48 percent of shoppers, compared to 6 percent for the nonactivated one. An activated endcap got 37 percent notice, compared to 16 percent for the old-fashioned version. But at a certain point the displays begin to cancel each other out. There are so many fixtures screaming for the shoppers' attention that they become the visual equivalent of a dull roar, with nothing discernible amid the clutter. Merchant prince John Wanamaker once famously said (and I paraphrase) that half his advertising was waste—but he couldn't figure out which half. Same goes today for merchandising materials and strategies.

We were hired to study a terrific idea for solving all confusion regarding over-the-counter cures for indigestion, heartburn, nausea, gas and other even more wretchedly human gastrointestinal maladies. The shameful nature of these conditions is what engenders such woeful ignorance of how to treat them, the medicine company's research showed: Shoppers were a little reluctant to approach the cashier or even the pharmacist with problems such as these. (Personally, it was an extremely illuminating job, since I, too, was never quite sure which product was for which form of gastrointestinal distress, and I had no great desire to ask. Perhaps, like you, I was taking cures for burps when I had farts and confusing the relief for the runs with that for the pukes.) The cure for this was a signage system, a horizontal cylinder with a dial on one end: You'd dial up your symptom—say, heartburn—and in the little
window the name of the drug that cures it would appear. Can't miss, we all thought. Then a few prototypes were installed and we studied how shoppers interacted with them.

Well, actually, how they
didn't
interact, for the fixture went all but unused. Maybe shoppers were less confused than the research showed. The fixtures were perhaps a little too tastefully rendered, so the gray tubes didn't stand out on the shelves as much as they might have. It was even a little unclear that the dial on the side was meant to be turned—a big red arrow would have helped a lot. In any event, gastric uncertainty is going to be with us awhile longer, for the idea was a bust.

Here's another example. The question wasn't whether one of America's leading marketers of spices was going to get a fancy, expensive new system of supermarket fixtures to display its wares. That part had already been decided, to the tune of more than a million dollars' worth of displays as proposed by a major PoP firm. The prototype was a beauty—it organized the company's products by whether they were spices, extracts, essences or flavorings, something that hadn't ever been successfully done before. Everything's a battleground in supermarkets and spices were becoming a two-horse race; this was surely looking like a way for one company to distinguish itself where it counts, on the floor of the store.

The fixture's prototype was brought into the firm's headquarters for all to see, and there, in the flesh (as it were), it got raves from all concerned. And so into the stores it went, where it had, in essence, no positive effect on sales.

It had no negative effect either, which was a good thing, but for all that it cost, it did no better than the old displays it was meant to replace. What had gone wrong? Well, for one thing, the distinctions the display made—spice, extract, essence, flavoring—were more or less meaningless to the shopper. Who cares which it is? What it does to food, how it tastes and smells, are all that count. What exactly do I do with turmeric? Where does the rosemary go in a chicken? There was a lot you could tell people about spices, and some of that might actually encourage them to buy more. What does saffron smell like? A fixture that could manage to answer that question would be a genuine advance, but this display was
not that. And although the displays were a feast for the eyes when seen in the monochromatic gray (or was it beige?) headquarters of the firm, the swirling, heaving, dizzying visual cacophony of a supermarket was something else again. It is tough to get noticed in an environment in which even Cap'n Crunch himself must shout to be heard.

So say good-bye to those nice new fixtures. Maybe some new display system for spices was warranted. But the process that yielded this one was flawed from the start. The major decisions about how a company's goods will be presented on the floor of a store are made by the firm itself and then by three outside entities—the ad agency, the package designer and then the PoP agency, which usually has no input into what the first two decree. Those three all have their own agendas and their own priorities, none of which have any meaningful contact with what happens to displays once they reach the selling floor. Until the many agendas are settled into one sensible, practical-minded one, resolved, there will be plenty of flawed display systems.

Here's a final tale. A big-name soft drink maker had just spent a lot of money on new supermarket displays and hired us to test the prototype. When I arrived at a supermarket with the client, we looked in through a window and saw a giant pile of soda cases just sitting on the floor—a huge, bright, monochromatic mountain of pop.

“I wonder why they left it there like that,” she said. “It sure looks like a mess.”

Before she could arrange to have the sodas stocked properly, I asked if we could just videotape it as it was for a day. By our measure, 60 percent of the people who passed that mountain noticed it, a higher rate than much of the firm's in-store merchandising materials ever scored. Clearly, that big mass of color was all that was required to stop shoppers in their tracks. There's a lesson in there somewhere.

B
ack in 1997, when I wrote a chapter for this book that didn't exactly trumpet e-commerce, and by extension the Internet, as the greatest invention since cheese and crackers, a lot of people reacted as though I'd just insulted a newborn who'd already been crowned a combination of Mozart, Einstein, Newton, Tolstoy, Galileo and Jackie O. Basically, I said that e-commerce would never replace bricks-and-mortar stores, that it wasn't the final word on anything, that it was clumsy and annoying and—I almost forgot—that it was designed by a bunch of Silicon Valley geeks for a bunch of fellow Silicon Valley geeks.

Boy, did the hate mail ever start coming in—you can read some of it in the previous edition of this book's early reviews on Amazon. A lot of it accused me of not being able to accept the Brave New Digital World, and I just didn't get it, and my head was in the sand, stuff like that. I even got booed off the stage at Internet conferences. No one in the crowd of techies and software designers and true believers wanted to hear about the downsides and limitations of this kick-ass new revolution. They just wanted me to echo the party line—that the
Internet and e-commerce were the most remarkable discoveries since, well,
ever.
They would allow us to conduct business, trade stocks, buy all this cool gear, meet our soul mates and sit around in chat rooms swapping opinions about antique furniture, medieval Christianity or Duane Allman's slide guitar technique—all within the context of a united global community.

That the Internet and particularly e-commerce might not be the Wizard of Oz but instead some befuddled guy crouched behind a curtain, or that it was a work in progress, that it was, in fact, human and young and imperfect—well, no one was terribly eager to hear that message.

So when the dot-com bubble blew up in early 2001, I wasn't happy, but to be honest I did feel a little bit vindicated. At the same time, I wasn't surprised when the phoenix that is the World Wide Web 2.0 rose up out of its cinders. But there's a seminal issue that hasn't changed since the web came along in the early '90s: Internet shopping has grown in places not because it's all that good, but because the things it's replacing or trying to improve upon have gotten that much lousier, clunkier, more expensive and/or inefficient. The online world can chalk up whatever success it has today mostly to the failure of offline avenues and mediums and processes and delivery systems. In 2008, a decade after I wrote that first Internet chapter, I still think the Internet and the world of shopping online has miles to go.

If we look back at the web when it was first starting out, we can't help but be reminded of its big-bang origins. Essentially it was, and still is, an enormous data dump—a place where you and I can sift through massive amounts of unfiltered information, goods and people, to which nowadays we have unprecedented access. Want to hunt down the ISBN number of a crime thriller a buddy recommended? Need directions from your house to the racetrack in Pasadena? What about the Amtrak train schedule for this Thursday afternoon? Want to take a virtual tour of Berkeley College, find out who won the 1976 Super Bowl or the 1981 Tony Award for Best Musical, or figure out Best Buy's Sunday hours of operation? By giving consumers entrée to basic, useful information (as opposed to, say, knowledge) about products, places, schedules
and people to a degree that we've never had before, the Internet has democratized information. Better yet, we can track down whatever information we need from our kitchen tables, from a suburban campus or, increasingly, from our BlackBerries and iPhones.

The infinite glory of all this indiscriminate exposure—e.g., the absence of any filters, other than the finger-wagging kind that prevents school-aged kids from stumbling onto sites parents would rather they not visit—is, as it happens, also one of the World Wide Web's biggest disadvantages. The uncensored nature of the web has created a world where anyone can cheerfully disseminate the Protocols of Zion or share detailed instructions about how to build a homemade bomb without a grown-up stepping in and saying, “Hey there, wait a minute…” Type in, for example, “Eric Clapton,” and a second later, a gleaming, pulsating, almost madcap oil spill of Claptonia—roughly seventeen and a half million websites—will stun your senses. If you have roughly forty-eight hours to kill, you'll be able to scan everything from the guitarist's official website to fans' tribute pages to every interview Eric has ever given, to guitar tabs, chords, bass tablatures and lyrics, to YouTube videos, to ticket-vendor sites selling ducats to this summer's Clapton tour, to chronological listings of Eric's side work, to Eric's Cream years, to Eric's John Mayall years, to Eric's Yardbird years, to Eric's Derek and the Dominos years, to Eric's love life, to Eric's drug use, to Eric's sobriety, to Eric's astrological chart, to the pros and cons of Eric's recently published memoir, to autographed Eric memorabilia for sale on eBay, and honestly? You've barely scratched the surface of this guitar behemoth. It's truly astounding how much pure
data
Eric Clapton has generated since he picked up his first ax at age thirteen (and I know he was thirteen because I read it a few times on one of the seventeen and a half million websites).

The problem begins when you're trying to figure out a) what exactly are you after here? and b) what's true and what's not? The Internet, after all, is a repository for rumors, half-rumors, quarter-rumors, errors, speculations, hypotheses and racy untruths. These coexist along with, well,
facts
(things that derive from what at least appear to be valid sources). How do you tell the two apart, especially when they
occasionally share space on the same website? Take Wikipedia, the collaborative, ongoing encyclopedia. Students using the site as a resource for their term papers are never sure from one hour to the next whether the entry they're reading won't have entire chunks removed, altered, updated, reattributed or even eliminated during tomorrow morning's upload.

So the lack of any filtering is both an embarrassment of riches and sometimes just an embarrassment. It's given consumers access to spectacular amounts of data (and
stuff
) but no reliable way to discern what's worthwhile and what's not, what's trustworthy and what's louche.

Within this smorgasbord of information and data, many consumers have come to believe that if they can't find something on the Internet, it doesn't exist. They're usually surprised to learn that if a website tells them there are no rooms available at their favorite hotel, no airline flights leaving this afternoon for Singapore, or no alternate routes to Yankee Stadium other than the one MapQuest proposes, that a simple phone call to the hotel, the airline or AAA will often prove the Internet wrong. Ninety-five percent of the time, absolutely, chances are you'll find what you're after online. The other 5 percent of the time, though, a hotel advertised online as sold out often does have a spare room, and there
is
a flight that leaves when and where you want it to leave from that's simply not listed on Travelocity.

The lack of any filtering process on the Internet, as well as its margin for error, suggests the need for some kind of expertise—someone to winnow down the possibilities into a good dozen or so. Part of the problem these days, as most consumers are aware, is that there's too much choice in the world. Too much product. Too many different kinds of ink cartridges. Too many shaving razors. Way too much
stuff.
Where does one even begin? Often consumers are looking for the most rudimentary guidance—someone who will come forward if only to decrease the range of available inventory. The Oprah Winfreys and Martha Stewarts of the world have intuited this and have posited themselves, among their other roles, as agents or doorkeepers. Like the third ghost in
A Christmas Carol,
the one who could see into the future and prevent Scrooge from making goofs, they point to a particular book or musical
recording or comfy mattress or long-burning candle or flat-screen TV that in their opinion has all the right moves. Addled, overwhelmed consumers respond.

Matter of fact, many are outright relieved to let go of the burden of decision-making—which in my mind contributes to the popularity of online best-of lists, whether it's the Amazon books bestseller list or the category-specific start pages that show up onscreen when you pay a visit to the Apple iTunes Store. From decades of work, especially with music stores and bookstores, we know that among the most popular and effective merchandising tools are lists—
Billboard
magazine lists,
New York Times
bestseller lists, The VH1 top 10 hotties list.

1. It's
   
2. A
   
3. Fact:
   
4. People (and particularly Americans)
   
5. Love
   
6. Lists.
   

They love lists even though the list in question may not be one that a team of in-house experts has thoughtfully assembled, but rather a rundown of the most popular items other consumers bought. “Most popular,” as any artist or consumer will tell you, doesn't often match up with “the best.” But many consumers are perfectly content to eat what everybody else is eating, just as they have no qualms about naming their babies Emily and Jacob, this year's most popular girl-baby and boy-baby names. Among the top-purchased items on the iTunes most popular classical music downloads list you'll always find five or six titles displayed right there on the iTunes Classical start page, including recordings by several shapely young violinists and comely pianists. Again, consumers love the idea that a bunch of other consumers have pre-vetted what they're about to buy. Regardless, it moves product.

Far more valuable, as I see it, are those lists put together by entrepreneurial Amazon readers. Ranging from extremely quirky to dead-on, these lists seem sincerely meant to help out first-time or overwhelmed
book buyers interested in an author or a subject or a specific genre. I also get a kick out of the public-forum aspect of Amazon, where readers can engage in a genuine dialogue about the merits of Eckhart Tolle's new book or the latest Janet Evanovich. Some five-star reader recommendations are no doubt phony and posted by friends and close relations of the author, but they can't all be, can they?

Still, Amazon has its definite downsides. For one thing, try contacting them if you have a problem with your order (entire websites are devoted to this common quandary). If you have a problem, it's hard to ignore the little voice in your head telling you that Amazon's powers-that-be haven't the slightest interest in hearing from you. Try to contact them via e-mail, and you'll get back a terse yet genial automated response. You can spend days fruitlessly trying to track down a customer service number. The price we pay for convenience, one-click shopping and a ritualized retail experience is that no one recognizably human sits at the other end of our Amazon transactions—just a seamlessly calibrated database of e-mails that roll toward our in-boxes.

This issue got a little personal when Envirosell started working for Microsoft, a company that has become one of our largest and most enthusiastic clients. For them, we deconstruct the software and video game sections of stores across the world (as someone who can't get past the first series of screens in Halo—a classic Xbox game—I know more about how Xbox 360 is shopped globally than anyone really has a right to know). At one point early on in our Microsoft relationship, one of the company's executives called me in a panic. Was it true, as per Amazon, that I was the coauthor of a new manual on Unix/Linux, their rival operating system? Of course not, yet there I was on Amazon (for God's sake, how many Paco Underhills can there be in the world?). Our colleague was relieved but made it clear there had been a few waves in Redmond, home of Microsoft's corporate headquarters, about a vendor who might be a spy.

What to do? E-mails to Amazon led to more automated replies. Finally, exasperated, I managed to get hold of the company's general counsel, who told me there wasn't a whole lot he could do to resolve my problem, that the issue lay with one of their many distributors.
When I made it clear that they
had
to do something, that Amazon's mistake was jeopardizing my business, the most he could offer was that he would remove the offending coauthorship immediately; however, Amazon couldn't guarantee that as subsequent uploads came along, my name wouldn't reappear as the Unix/Linux manual's coauthor. To this day, I check the site pretty vigilantly.

As I alluded to earlier, today's tidal wave of websites, products, choices, stuff, information and outright misinformation is a dilemma that suggests the need for some future “Ask an Expert” service, someone who will condense two thousand websites into the dozen or so that are of vital assistance to you, the shopper. Certain websites such as Head Butler are on top of this already. Its proprietor simply hand-picks stuff he likes, from Shure E3c Sound Isolating Earphones to the new Levon Helm album; writes a short, witty essay on why these things are so great; then directs interested consumers to Amazon. How terrific the future of the web would look if we could rent an expert to help us make our way around the net and by so doing, shrink it. Our colleagues at LivePerson.com have launched a new online service where aside from getting shopping advice, consumers can, say, rent a microbiologist or a distinguished software engineer and pay them by the minute to field their questions. As the literacy of the web's latest generation begins to develop, we may find that the monopoly on information that the Googles and Microsofts and Yahoos possess will break down into processes that are far more discriminating than what we have right now.

But I'm not crossing my fingers.

 

From my perch studying the buying habits of consumers both online and off, for a long time I've considered the web as analogous to water. It inches and flows and streams and pools into ditches and culverts and creeks and channels and puddles where someone has already done the surveying and architecting and ditch-digging. And the net, with a good sixth sense for this pre-dug inventory of opportunities, makes its way there intuitively. It fills up those holes. Now and then it even
plugs them up pretty well. But it still hasn't resolved the same issue that's facing today's retailers, namely, what's global and what's local? Can a global process have any relevance to you as a local individual?