Books For Entrepreneurs: “Why We Buy” by Paco Underhill

When people think of product development and product marketing, almost the entire focus is placed on differentiation and branding. Merchandising also plays an important role but often only as directed from the branding and development efforts and not based on the realities of what happens in a store. Almost no product starts with the question “how will this be sold in a store?”

paco underhill
Mr. Underhill
For all the advertising and viral marketing and celebrity endorsements, nearly every product we buy comes from a transaction in a store. Don’t you think we should know a lot more about this sacred place that will make or break our company’s efforts?

Luckily for us, there is Paco Underhill. You could call him a retail expert, a capitalist anthropologist, a social psychologist, but I prefer to think of him as a shopping scientist. Underhill and his company Envirosell travel the globe to help stores improve their customer experience and bottom line. After decades of work and research, he published Why We Buy, a deep look at the world of shopping. Did he do it to get more clients and visibility? Of course! But does it give you a treasure trove of insights and learnings that you can use when developing your product and marketing strategy? Absolutely.

Filled to the brim with examples from around the world, Why We Buy reveals the nuances, contradictions, and obvious problems with stores, signage, product displays, the difference between male and female shoppers, waiting in line, and creating experiences. His format is often simple, a one paragraph example of a problem, a solution, and ending with the line “sales went up.”

But it’s certainly not only stores that benefit from his insights, it’s also brands and anyone who sells their wares in a physical place. Special displays, signage, product packaging, and all the other elements from the development phase get covered too.

What I particularly like is that his approach is human-based. His army of observers meticulously watch shoppers and note their behavior. Nothing is based on the gut feeling, everything is as quantitative as possible.

A key takeaway is the human need to try things out before buying them. We are tactile and sensorial beings. If we cannot try something beforehand, either we rip open the box to see or we simply forget about it. Both are not winning scenarios for a store or brand. So why then is it so hard to try so many different products? Why are there not more samples available in store?

Underhill also notes the physics of the human body. Normally stores place the lower margin items down low, where people have to stoop to reach them. No one likes doing this, especially the elderly. Reorganizing products for their target has a big effect on shopper experience and sales.

The first version of the book came out before e-commerce was really a thing, and so he added a chapter on the internet in the re-release of the book. In my opinion, it is totally unnecessary. E-commerce is not Underhill’s area of expertise and his skepticism about the web undermines his credibility at the end of the book. I know he probably felt obliged to discuss the topic, but he is unabashedly old school and his examples border on speculation instead of the sound scientific analysis of the rest of the book.

Shopping is an incredibly complex world of competing forces. Why We Buy is a great introduction to this world, what makes it go round, and how to make it better. Entrepreneurs, take note!

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