58 pages • 1 hour read
Paco UnderhillWhy We Buy: The Science of Shopping
Nonfiction | Book | Adult | Published in 1999A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Part 5Chapter Summaries & Analyses
Part 5: “Screen Savers, Jet Lag and Whirling Dervishes: The Culture of Shopping”
Chapter 17 Summary: “The Internet”
As the Internet grows, its vast collection of information can be hard to filter. What news reports are true? Which hotel or book or pop song is best? For that matter, is that hotel really sold out this weekend, or can an old-fashioned phone call resolve the issue? Web surfers love lists, especially best-of compendia. Online, people are drawn to what’s popular, trusting the taste of the mob. Lists curate much of the huge mass of choices available online.
Customer service can be spotty. Often, it’s not possible to reach a web company by phone. Localized information is still a work in progress; more online stores should follow Netflix’s lead and suggest popular purchases by Zip code. As media outlets have multiplied, individual ads reach fewer people. Internet ads, cheaper to run and customizable, have taken up some of this slack.
How does Internet shopping unfold? First is “The Pre-Shop” (236). Everything from shoes to cars is listed in detail online, making it easy to search by price and quality. This method improves shoppers’ bargaining power, but it also makes follow-up purchases at street stores quick and easy, which benefits those stores.
The Pre-Shop evolves into “Secondary Shopping Therapy” (237), the process of gazing longingly at all sorts of merchandise. This is similar, psychologically, to the shopping experience in department stores, except online product lists are much larger, more informative, and viewable from the comfort of home. The time thus saved makes shopping so easy, with delivery included, that people can buy more than they need or want. For this issue, there are eBay and other flea-market sites where people can unload unwanted items, from toys and tchotchkes to fine art and first editions.
The Internet behaves like water, flowing around and through human problems, pouring in digital solutions, each time “fixing a hole in our physical world” (240). One of these holes is the increasing isolation of suburban life and work. Facebook, for example, exemplifies the Internet’s ability to generate long-distance intimacy—a “kind of intimacy” (240)—that makes communicating easier but also allows people to shy away from face-to-fact contact. On the other hand, crowded societies like Japan and Korea find the Internet to be a place for privacy.
Online dating services make it easy to find someone who’s just like us, but then we miss the opportunity to bond with people who have different interests and other ways of looking at the world. Underhill points out: “If I had to date myself I’m pretty sure I’d announce, ‘This isn’t working,’ after about a day" (243).
A growing value of the Internet is “convergence,” in which an electronic device connects online and performs useful functions. A refrigerator keeps tabs on its contents and re-orders foods as needed. A mobile phone scans a product at a store and receives a full description, a process that incidentally reduces paper clutter and its environmental footprint. The same phone replaces a wallet during checkout. America may not take the lead in ushering convergence into our lives: “we’ve all but lost the capacity to think big or be bold” (247). Third-world nations may get the jump on the West: Already, India and countries in Africa have leap-frogged the old landline system and gone straight to mobile phones. The future of the Internet may emerge from those places.
Chapter 18 Summary: “Come Fly with Me”
In the 1980s, Envirosell opened a European office in Milan, Italy, managed by a local woman, Giusi Scandroglio. Business grew quickly and spread to “Amsterdam, Stockholm, Lisbon and elsewhere” (257). A Brazilian bank, Banco Itaú, hired the company to analyze its signage, teller windows, and the like. The branches were large and busy; customers paid bills in cash, discussed their finances openly, and arranged themselves by wealth classes. Envirosell added other Brazilian clients, and soon one third of the company’s profits came from that country.
Envirosell opened a formal Brazilian office and hired another woman like Scandroglio: “Giusi had succeeded in a male-oriented culture, and we were eager to find her Brazilian equivalent—a woman who wasn’t a stranger to facing those same odds and staring them into submission” (258-59). They selected Maria Cristina “Kita” Mastopietro, who fitted the role perfectly with her blend of intelligence, energy, and competence. The Brazil office handles all South American business for Envirosell. Business can go up and down, depending on currency fluctuations, politics, and even soccer: During World Cup competition, Brazil effectively shuts down for three months.
An article about Envirosell appeared in The New Yorker, and new clients multiplied. The first edition of Why We Buy brought in more business. Envirosell expanded to Japan, where it teamed with Momo Toyota, a woman who had spent some of her youth in the United States and understood the “cultural gaps” that Underhill and his company needed to bridge. Manners mean a great deal in Japan; the author believes Why We Buy is basically about how retailers can make good manners fundamental to their stores.
People are basically similar the world over; in that respect, selling is similar everywhere. There are cultural differences, though, that must be respected in each region. Tokyo is densely populated, and stores can be many floors in height. Brazil has a street-crime problem that is largely absent in its shopping malls. Dubai is hot; Helsinki gets cold. India in 2008 boasts rapid high-tech growth but suffers from deteriorating infrastructure. It has a retail system of mom-and-pop stores with no national chains, spotty electrical grids, extreme poverty, a distinct class system, and a cultural history burdened by centuries of British domination, yet opportunities abound.
Envirosell also has branches in Moscow and Mexico City and seeks employees who speak multiple languages: “Today in our New York offices, we have people who are fluent in Italian, French, German, Spanish, Japanese, Hindi and a bunch of Asian languages and dialects” (266-67). Working with overseas clients has greatly benefited Envirosell, giving it perspective and new ways to think about old problems in retail.
Chapter 19 Summary: “Windows of the World”
Most of the growth in retail marketing now takes place in the emerging markets of rapidly developing countries. Dubai has become a shopping crossroads; one mall includes a ski slope inside a refrigerated building. In South Africa, the Gateway Mall sports a skateboard park as well as a surf school and wave machine.
One Envirosell client has invested in “millions of square feet of malls and town centers” in Africa and the Middle East (269), including a South African mall with a high school sports stadium. Despite problems of crime and poverty, income has surged: “Africa is an example of the curative properties of economic growth” (269).
Ireland has prospered greatly; in Dublin, the youthful populace shops at Brown Thomas, a once-staid department store refashioned into a hip, up-market destination. In São Paulo, Brazil, Daslu is a giant store that purveys luxury goods on a scale unmatched anywhere. Membership confers the right to a personal shopper: Point to apparel you wish to try, and the items appear in your dressing room, with a selection of jewelry to match. Hungry? Restaurants and bars await. International home sales, vacation planning, cars, boats, aircraft, and plastic surgery are available.
Shopping has a different social and cultural place in each country. In America, retailing is considered lower-middle-class; in Europe, with its history of service to royalty, selling goods is more highly regarded. In Mexico and points south, shopping malls are islands of safety in a sea of persistent crime. Brazil’s malls also offer a colorful social outlet to young adults, who often live with their parents until they marry.
Around the world, as in America, retail executives persistently fail to visit their own stores, missing chances to reconnoiter and see what needs improving. They don’t learn about unsightly restrooms or dank employee locker rooms. Different socio-economic conditions call for different innovations. Mexico’s 900 Electra appliance and electronics stores cater to the working class, who shop in family groups; the stores offer them loans with small weekly payments so they can afford that next appliance. Electra's bad-debt ratio is “tiny” and much less than that of a typical bank.
US retailers have done some innovating of their own, improving the shopping mall experience with live music, exotic merchandise, and ethnic themes. Another opportunity is age-group theming: “You can have a mall that’s focused on young families, a mall for teenagers and even a mall that takes especially tender loving care of its elderly” (279).
International retailing has been a boon to Envirosell. Underhill travels 150 days a year, much of it overseas, as he visits far-flung offices. He claims four million frequent flyer miles.
Chapter 20 Summary: “Final Thoughts”
Retailing is as much an art as a science, and it has ancient roots. Turkey’s Grand Bazaar boasts its own Internet address, but the shopkeepers there apply sales techniques that have been handed down for hundreds of years. Their skill would put most Western salespeople to shame.
In the modern era, competition is intense, and retailers must worry not simply about others in their market but about every other opportunity a customer has for spending money. For example, “two hours and $20 spent in a cinema are forever lost to the rest of retailing” (283). The biggest changes come from women, who have altered their participation in society and the workplace so much that retailers must try to keep pace.
To help retailers learn how to adapt, Envirosell trackers must be very good at their job, which involves being anonymous so that shoppers will behave naturally around them. Trackers are so good at it that, on several occasions, they have witnessed shoplifters at work. Underhill’s company nonetheless carefully respects shoppers’ privacy: “I’m not interested in who you are […] All I’m interested in is shopping patterns” (286). The in-store cameras are there to learn how to improve the shopping experience.
When, however, members of the media accused Envirosell of being spies, and their use of video cameras was termed Orwellian, the company responded by pointing to the seven million cameras on England’s streets that the authorities use to monitor everyone. Worse, almost anyone can learn a great deal about anyone else with a few moments’ searching on the Internet.
Some critics have suggested that Why We Buy gives away all of Envirosell’s retailing secrets, and that a smart business can simply buy the book and avoid having to hire the consultants. Underhill prefers that his clients be acquainted with the general principles, which makes it easier for his company to show them, scientifically, how their recommendations will improve sales, and how small details can make a big difference to the bottom line.
Shopping remains a form of entertainment; to that end, more stores have begun to offer food. Stores are like museums of commerce, and museums themselves contain stores. Changes in culture are reflected in stores, their products, and the way people buy: “shopping is a good dipstick of social change, and even, dare I say it, social revolution” (290). Ultimately, societies and their individuals dictate the shape and content of the stores they visit and the products they buy.
Part 5 Analysis
Part 5 goes international, tracing Envirosell’s growth overseas, the retailing lessons it has learned, and the rise of innovative new marketing and merchandising techniques both in the developing world and on the Internet.
Earlier in the book, in the Prologue to Part 4, Underhill declares flatly that “the Internet, catalogs and home shopping on TV will prosper and complement, but never seriously challenge, real live stores” (168), mainly because people need to touch and feel merchandise before they’ll buy. Online pictures of items for sale at Amazon thus will never be enough to fully engage people’s buying instincts, except perhaps for repeat purchases. In Chapter 17, he notes that some shoppers price items on the Internet and then buy them at a local store.
Since 2009, however, a number of trends have cast doubt on brick-and-mortar stores’ prospects. Local retailers complain that buyers often examine products in their stores and then order them by price online, neatly reversing Underhill’s prediction. During the business boom that began in America in 2012 and continued for several years, unemployment dropped below four percent, yet many neighborhood stores were boarded up as if during a recession. Shopping malls closed, and over one million brick-and-mortar retail jobs disappeared. These were signs that online shopping had begun to replace downtown retailers.
Many stores fought back, luring customers with compelling interactive displays, “less pleasurable, perhaps, than a week at Disney World, but not entirely without potential for fun" (152).
This dynamic brings to mind the running battle between movie theaters and television. Since its introduction in the late 1940s, TV has pulled viewers away from the big screen to watch the small one at home. Wide-screen color films lured people back to the theater, but the arrival of color TV in the late 1960s cut into that advantage, so exhibitors brought in stereo sound. Then stereo came to television, so theaters installed high-resolution projectors. In the early 2000s, digital flat-panel TVs pulled viewers home once again, so theaters introduced 3D movies, fancy seats, and full dining options.
Will the same back-and-forth struggle persist between the worlds of brick-and-mortar stores and online shopping? In recent years, augmented reality and virtual reality systems, including headsets and gloves, have begun to make it possible to see, hear, and “touch” objects remotely. As these devices become widely available, shoppers may opt to browse online merchandise by feel without leaving their homes. To survive, street stores may introduce total-immersion displays, entertainment, and other features that would validate Underhill’s belief that shopping will come to resemble an amusement park.
The author believes the United States has lost its spirit of boldness: “We are backing into the future” (247), allowing our infrastructure to decay and our enterprising spirit to languish. This statement echoes a common concern among economists; they call it “stagnation” and debate it regularly. Is America really becoming stagnant, economically and otherwise? If so, what causes this stagnation? Too much red tape? Too much self-satisfaction? Is US technology no longer a major source of world-changing ideas? Whether stagnation is real, and whether it will damage America’s future, remains to be seen.
In Chapters 18 and 19, Underhill takes the reader on a cook’s tour of his favorite retailing trends beyond America’s borders. He cites several luxury malls in various developing nations, using them as a metaphor for rapid economic growth in those places. He’s aware that most such shopping plazas are surrounded by vast areas of grinding poverty: in Brazil, “a wealthy population roughly the size of Belgium’s is surrounded by poverty on the scale of India’s” (271). He sees the ostentation, though, as a country’s way of saying, essentially, “We’re doing better; we’re going to get there soon.”
In some regions, for example Africa, a number of countries are kleptocracies, with the leadership siphoning off most of the growth; a political activist would rightly scoff at claims that development there means anything to the person in the street. In recent decades, though, economic growth in the Third World has doubled, and not all of it landed in the pockets of dictators. For one thing, the number of citizens in developing nations with cellphones has greatly increased. As Underhill notes, those regions have simply skipped the landline phase that the West went through. The new mobile phones give locals quick access to the Internet, along with apps that provide easy ways to communicate and run small businesses—in short, independence and economic power previously unavailable.
Growth differs in each region. Mexico’s Electra company, whose stores offer loans to their customers, has developed its own customized version of what goes on every day in American stores. In the United States, buyers typically pay with a credit card, which amounts to an instant loan that they, too, must pay off later. Electra’s approach fits the economic culture around it, a solution that might not work elsewhere.
In the final chapter, Underhill declares that modern retailing faces many competitive threats beyond those from similar stores and outlets. People might spend a lunch hour browsing at a computer store instead of a bookstore; later, they might go to the movies instead of a restaurant. Economists call these options “opportunity costs,” the price we pay for buying one thing and not another. In the hyper-competitive modern marketplace, such options abound—a situation that is good for patrons but a constant challenge for vendors.
Underhill defends his company’s use of video cameras and undercover trackers to ferret out shopping behavior, a procedure that might make patrons uncomfortable were they to learn about it. The purpose of the surveillance is to improve the shopping experience, a laudable goal, but the means of obtaining that information could be construed as a violation of customer trust. This is an ethical issue with strong arguments on both sides. It's a debate that echoes the more general concerns of civil libertarians, who note that technology makes possible both improved personal freedom and greater invasion of privacy.
