Paco Underhill’s “Why We Buy: The Science of Shopping” (1999, Simon and Schuster) is somewhat a misleading title because it is a business book that every business owner and executive should read. Why? It challenges the norm that numbers mean everything and that executives know what is going on in their business because- well, they are the executive.
Paco Underhill is a business consultant who studies the mundane habits of people wandering into, through, and out of a retail store. Ultimately his team observes a retail store’s “game film” for lack of a better term.
In “Why We Buy” Underhill relates the discussion he had with a multi-billion dollar, thousand-plus store retail chain executive. Underhill’s team had just completed an exhaustive study of several of the retail chain’s stores. One element of the study was to observe the “conversion rate”: What percentage of people actually bought something versus how many entered the store.
When Paco Underhill asked the executive if the executive knew his company’s “conversion” rate, the executive exclaimed, “It must be 100%. Why would anyone bother to drive to the store if they weren’t going to buy something?!” Underhill’s study team had a different number. The conversion rate was actually 48%. Even when the store managers challenged this statistic and placed their own people at the door counting people coming in versus those going out with packages. They came up with the same number as Paco Underhill’s team.
Furthermore, Underhill’s studies show that the interception rate- the number of customers who actually come in contact with a store employee during the customer’s shopping experience- is directly correlated to not only the conversion rate, but also to the average amount someone buys.
Engagement by the executive to actually see in his stores that he had a conversion rate problem and engagement by his employees with the customer during the shopping experience would improve the top-and bottom- lines of the business. Don’t be fooled by the title- Why We Buy is a good read for any business owner/ executive.