Why We Buy: The Science of Shopping

CEOs Should Know the Percentage of Shoppers Who

Actually Buy Something In Their Stores1
When I asked how many of the people who walk into his
stores buy something, his answer was: all of them, pretty
damn near. And when I say it was his answer, I mean it
was also the answer of the huge, PC-networked, datachewing, number-crunching, cipher-loving organization at
his command. Everybody there agreed: What we call the
conversion rate-the percentage of shoppers who become
buyers-was around 100 percent. After all, this corporation
reasoned, their outlets were destination stores, so people
didn't go there unless they had some very specific
purchase in mind. Hence, they believed, the only time
shoppers didn't buy was when their selection was out of
stock. In fact, the very concept of conversion rate,
implying as it does that shoppers need to be somehow
transformed:-" converted" -into buyers, was alien to this
man and this corporation (as it still is to many other
successful companies and executives). I was asking the
question because we had just performed a large-scale
study of this chain's stores~ And I knew the conversion
rate, based on our having spent hundreds of hours
counting, among other things, the number of shoppers
who entered and the number who made purchases. It was
a very good conversion rate for stores of this kind. But it
was about, half of what this man thought it was. To be
precise, 48 percent of shoppers bought something.

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Conversion Rate2
Conversion rate measures what you make of what you
have-it shows how well (or how poorly) the entire
enterprise is functioning where it counts most: in the
store. Conversion rate is to retail what batting average is
to baseball- without knowing it, you can say that
somebody had a hundred hits last season, but you don't
know whether he had three hundred at-bats or a
thousand. Without conversion rate, you don't know if
you're Mickey Mantle or Mickey Mouse.
There Is a Direct Relationship Between Time Spent In A
Store And Actually Buying Something3
Now, the amount of minutes a shopper spends in a store (assuming he or
she is shopping, not waiting in a line) is again an important factor in
determining how much she or he will buy. Over and over again, our
studies have shown a direct relationship between these numbers.
Interception Rate4
Here's another good way to judge a store: by its
interception rate, meaning the percentage of customers
who have some contact with 'an employee: This is
especially crucial today, !when many businesses are
cutting overhead by using fewer workers, fewer full2 Page 40
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timers and more' minimum-wagers. All our research

shows this direct relationship: The more shopperemployee contacts that take place, the greater the
average sale. Talking with an employee has a way of
drawing a customer in closer.

Know Who Your Consumers Are From An Ethnic

Perspective5
The issue of retailers not knowing who shops in their
stores comes up all the time. A newsstand in Greeley
Square here in New York wanted to increase sales and
planned to do so by expanding the space devoted to
magazines. We pointed out that a large percentage of his
customers was either Korean-:-the square borders on a
large Korean enclave-or Hispanic. Stock Korean-language
magazines (Korean papers already sold well) and soft
drinks popular in the Latino market, we advised, and
when they did, sales rose immediately. This related issue
comes up all the time in New York, Los Angeles and other
big cities: foreign shoppers in need of a break from stores
and restaurants. Almost no accommodation is made for
Asian shoppers, despite their numbers and tendency to
spend a lot of money on luxury goods. But there are no
sizing conversion charts, no currency exchange rates
posted, not even a little sign or two in Japanese or Korean
telling shoppers which credit cards are accepted. Smart
retailers would reward employees who learned a little
Japanese, German, French or Spanish even just a handful
of phrases would make a difference, as anyone who has
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shopped in a foreign country would realize. Restaurants

should have menus in Japanese and German on hand.
60% Of What We Buy wasnt On Our Shopping List6
Remember that more than 60 percent of what we buy
wasn't on our list. And no, this isn't the same as an
impulse purchase. It's triggered by something proposing
the question "Don't you need this? If not now, then
maybe in the near future?"

Give People A Way To Carry More Merchandise Easier7

The president and I spent about an hour walking through
the Milan Spar. As I silly, I liked the place a lot. It had
great vegetables, a juicing operation and a small bakery.
Problem was, all of the baskets were clustered by the
front door: He asked me what the store could do to
increase performance. "Watch me," I said. I grabbed three
baskets and moved through the store. Each time I found
someone with their arms full, I offered them a basket
along with a nice smile. No one turned me down.
Where You Should Place Shopping Baskets In Your Store8
The lesson seems clear: Baskets should be scattered
throughout the store, wherever shoppers might need
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them. In fact, if all the stacks of. Baskets in' America were
simply moved from the front of the store to the rear they
would be instantly more effective, since many shoppers
don't ( begin seriously considering merchandise until
they've browsed a bit of it. The stack should be no lower
than five feet tall, to make sure the baskets are visible to
all, yes, but also to ensure that no shopper need bend
down to get one, since shoppers hate bending, especially
when their hands are full. A good, simple test on
placement is that if you have to keep restocking a pile of
baskets through the day, it's probably in a good place.

Old Navy Tote Bag Example9

I take visiting retailers there-it's one of the liveliest, most
energetic shopping experiences in the city. As soon as
you step inside there's a gregarious, smiling employee
greeting you and proffering a black mesh tote bag to
carry your purchases. The bags are cheaper, lighter and
easier to store than plastic baskets, and they look a whole
lot better, too. In fact, when you bring yours to the
checkout, the cashier will ask if you want to buy the bag,
and a fair number of people say yes, adding one final sale
at the last possible moment.

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People Have Right Leaning Way if Walking Through The

World10
This right-leaning bias is a profound truth about how most
humans make their way through the world, and it has
applications everywhere, in all walks of life. It took us a
while to see this pattern, and ever since we've collected
data that bears it out (though not in Japan, apparently).
People Tend To Reach And Walk In to The Right Of Things11
Shoppers' not only walk .right, they reach right, too, most of them being
right-handed. Imagine standing at a shelf, facing it-it's easiest to grab
items to the right of where you stand, rather than reaching your arm
across your body to the left. In fact, as you reach, your hand may
inadvertently brush a product to the right of the one you're reaching for.
So if a store wishes to place something into the hand of a shopper, it
should be displayed just slightly to the right of where he or she will be
standing.

Stores Leave Milk in the Back of the Store In Order To

Force People to Walk Through the Entire Store12
There's one aspect of how shoppers move that most
people are familiar with the quest to get us all the .way to
the back of a store. Everyone knows why supermarket
dairy cases are usually against the back wall: Because
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almost every shopper needs milk, and so they'll pass

through (and shop) much more of the store on the way to
and from the rear.
Woman Shopping Statistics13
Woman shopping with a female companion: 8 minutes, 15
seconds
Woman with children: 7 minutes, 19 seconds
Woman alone: 5 minutes, 2 seconds,
Woman with man: 4 minutes, 41 seconds

Occupy The Man Accompanying a Women14

In each case, what's happening seems dear: When two women shop
together, they talk, advise, suggest and consult to their hearts' content,.
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hence the long time in the store; with the kids, she's partly consumed
with herding them along and keeping. Them entertained; alone, she
makes efficient use of her time. But with him-well, he makes it plain that
he's bored and antsy and liable at any moment to go off and sit in the car
and listen to the radio or stand outside and watch girls. So the woman's
comfort level plummets when he's by her side; she spends the entire trip
feeling anxious and rushed. If he can somehow be occupied, though,
she'll be a happier, more relaxed shopper. And she'll spend more, both
time and money. There are two main strategies for coping with the
presence of men in places where serious shopping is being done. The
first one is passive restraint, which is not to say handcuffs. Stores that
sell mainly to women should all be figuring out some way to engage the
interest of men. If I owned Chico's or Victoria's Secret, I'd have a place
where a woman could check her husband like a coat. There already
exists a traditional space where men have always felt comfortable
waiting around-it's called the barbershop. Instead of some ratty old
chairs and back issues of Playboy and Boxing illustrated, maybe there
could be comfortable seats facing a big-screen TV tuned to ESPN, or the
cable channel that runs the bass-fishing program. Even something that
simple would go a long way toward reliving wifely anxiety, but it's
possible to imagine more: Sports illustrated in-store programming, for
instance-a documentary on the making of the swimsuit issue, 'perhaps-or
highlights of last weekend's NFL action.

In 2007 Only 3% Of Coupons Where Used15

Gone: Whoosh! In 2007, less than 3 percent of all
manufacturers'
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Coupons distributed via newspapers, magazines or in the

mail were ever redeemed (in response, the coupon
industry is making a valiant attempt to move the coupon
distribution business online).
What Shoppers Love16
Amid so much science, we discover in the end its love
that makes the world of retailing go round. What do
shoppers love? A few important things, we've learned,
such as:
TOUCH. We live in a tactile-deprived society, and
shopping is one of our few chances to freely experience
the material world firsthand. Almost all unplanned buying
is a result of touching, hearing, smelling or tasting
something on the premises of a store-which is why
merchandising is more powerful than marketing, and why
the Internet, catalogs and home shopping on TV will
prosper and complement, but never seriously challenge,
real live stores.
MIRRORS. Stand and watch what happens at any
reflective surface:
We preen like chimps, men and women alike. Self-interest
is a basic part of our species. From shopping to cosmetic
surgery, we care about how we look. As we've said,
mirrors slow shoppers in their tracks, a very good thing
for whatever merchandise happens to be in the vicinity.
But even around wearable items such as clothing, jewelry
and cosmetics, where mirrors are crucial sales tools,
stores fail to provide enough of them.
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DISCOVERY. There's little more satisfying than walking

into a store, picking up the (metaphorical) scent of
something we've been hunting for and then tracking it to
its lair. Too much signage and pointof- purchase display
takes all the adventure out of a shopping trip; stores
shouldn't be willfully confusing or obscure, but they
should seduce shoppers through the aisles with
suggestions and hints of what's to come. The aroma of
warm bread can be enough to lead supermarket
shoppers. To the bakery aisle; a big, beautiful photograph
of a James Bondian stud in a creamy dinner jacket carries
more levels of information than the clearest
FORMALWEAR sign can ever convey.
TALKING. Stores attract lots of couples, friends or groups
of shoppers usually do very well. If you can create an
atmosphere that fosters discussion of an outfit, say, or a
particular cell phone, the merchandise begins to sell
itself.
RECOGNITION. In that old TV shows Cheers, the theme
song went, "you want to go where everybody knows your
name." This is a battlefield where the small, locally owned
store can still best the national chains, and smart stores
make the most of this advantage. Given a choice, people
will shop where they feel wanted, and they'll even pay a
lime more for the privilege. Even the smallest stores can
build customer loyalty just by keeping track of what
people buy and giving price breaks when appropriate.
Our studies show that any contact initiated by a store
employee-and I mean even a hello-increases the

likelihood that a shopper will buy something. If the

salesperson suggests a few things or offers information,
the chances rise even higher. Of course, shoppers don't
love pushy salespeople, so there's a line here.

BARGAINS. This seems obvious, bt1t it goes beyond

simply cutting prices. At Victoria's Secret, for example,
underwear is frequently piled on a table and marked five
pairs for $20, which sounds like a much better deal than
the $5 a pair normally charged. At even the poshest
stores, the clearance racks get shopped avidly. Still, while
shoppers expect a certain amount of elbow-to-elbow
crowding around the discount table, they won't bite if the
physical discomfort becomes too noticeable. They'll
extricate a blouse from a jammed sale rack, for example,
but if there's no room to back up and examine it as
/closely as the full-price merchandise, they won't buy.
What Shoppers Hate17
TOO MANY MIRRORS. A store shouldn't feel like a
funhouse. At a certain point, all that glass becomes
disorienting.
LINES. Not only do they hate to wait, they also hate to
feel negative emotions while they do it-like frustration at
watching inefficiency, or anxiety wondering if they're in
the fastest line, or boredom because there's nothing, for
them to .read, watch or shop while they wait. The
memory of a good shopping trip can be wiped out by a
bad experience in the checkout line.
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ASKING DUMB QUESTIONS. New products especially

should be out where shoppers can examine them, not
behind glass. And there should be enough signs,
brochures, instructional videos, newspaper articles,
talking displays and whatever else is necessary for
browsers to bring themselves up to speed before they ask
a question. When stores work at making new or
complicated products accessible, sales always increase.
DIPPING. Or bending, either, especially when their hands
are full. If it's a challenge to reach down and pick up
merchandise, shoppers will pass, figuring that another
store will make the acquisition easier.
GOODS OUT OF STOCK. Self-explanatory.
OBSCURE PRICE TAGS. Ditto.
INTIMIDATING SERVICE. Also rude service, slow
service, uninformed service, unintelligent service,
distracted service, languid service, lazy service, surly
service. Probably the single best word of mouth for a
store is this: "They're so nice down at that shop!" When
service is lousy, shoppers will find another store; bad
service und<:>es good merchandise, prices and location
almost every time. Regardless of how practical an activity
shopping seems to be, feelings always come first, and
good is always better than bad.
90% Percent Of All New Supermarkets Products Fail18
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Close to 90 percent of all new grocery products fail, but it

isn't because people didn't like them-it's because people
never tried them. In my opinion, a new product
introduction that doesn't include a well-funded fully
supported (with marketing) effort to give shoppers
samples is not a serious attempt.

People Loose A Sense Of After Waiting More Than 90

Seconds In Line19
We've interviewed lots of shoppers on the subject and
have found this interesting result: When people wait up to
about a minute and a half, their sense of how much time
has elapsed is fairly accurate. Anything over ninety or so
seconds, however, and their sense of time distorts-if you
ask how long they've been waiting, their honest answer
will usually be a very exaggerated one. If they've waited
two minutes, they'll say it's been three or four. In the
shopper's mind, the waiting period goes from being a
transitional pause in a larger process (purchasing goods,
say) to being a full-fledged activity of its own
When Consumer Are In A Line Try To Distract Them 20
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Diversion: Almost anything will suffice. One bank we

studied used a TV tuned to soap operas to entertain the
line-a bad idea, we thought, because to enjoy a soap you
need to see the entire half hour. A much better solution
was used by another bank, in California, where a big
screen TV played old Keystone Kops shorts during the
afternoon, when most customers were retirees.
Everybody's considering video systems these days, but
some low-tech entertainments work just as well. Many
food stores serve free samples, a good time-killer that
promotes new products. Positioning racks of impulse
items so they can be shopped from the cashier line is
smart merchandising, but it's also good time bending.
Also keep in mind that the first person in line doesn't
require much diversion-he or she is in the on-deck circle,
just waiting for the sign that they're up. Merchandising
materials, signage, shoppable racks and anything else
should be positioned for the second person in line and
back.
Good Example On How To Market Something21
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 se,,: 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
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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.
Activated Fixtures Receive A lot More Attention Than Nonactivated Ones22
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 Example Of How To Attract Customers23
Here's a final tale. A big-name soft drink maker had just
spent a lot of money a new supermarket displays and
hired us to test the prototype. When I arrived at a
supermarket with the client, we looked in through a
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window and saw a giant pile .of soda cases just sitting on
the floor-a huge, bright, monochromatic mountain of pop.
"I wander 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.
Public Spaces Count As Much As Merchandise In Stores24
Public spaces, seating, bathrooms and parking lots
outside your doors are just as critical to sales as pricing
and visual merchandising.

Store Managers Should Related To The Genders that They

Are Selling To25
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I told a largely male executive group at Wal-Mart that I

could tell the gender of the manager in any of their stores
based solely on how recently the women's dressing room
had been painted. I don't know if I am responsible, but a
few months later, I noticed that lots of Wal-Mart dressing
rooms had gotten spiffy new paint jobs. Male managers
hate the soft goods sections, because like cosmetics, they
eat up labor costs and are more likely to have theft
problems, whereas hard goods such as TV sand
minifridges are easier to get onto the shelf and ate much
easier to keep track of. Women by nature have a better
understanding of how soft goods work and what they can
do for the business. Ten years after I made my dressing
room comment, Wal-Mart still has an underdeveloped
clothing business. One simple way of improving it would
be to increase the number of female store managers.