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Wednesday, December 20, 2006

Paco Sightings... and Rubber Soled Shoes

Well, not only 'Tis the Season to Cite Paco, but 'tis also the season to share sightings.

I sighted Paco Underhill earlier this year at the Science of Shopping Conference that Envirosell put on. I even shook his hand! Here's what he had to say about the current state of retail:

+ Retail innovation is happening in those places with a young affluent population base [e.g., Moscow, Dublin, Sao Paolo, Mexico City, Shanghai, Mumbai, Seoul...]. It is not happening in the US where our retail culture is overly focused on stock price rather than on what happens on the floor [or 'ground']. We are overly focused on the short term and getting results from opening new doors rather than from same store growth. We are overstored and for the most part reluctant to shed underperforming properties. Mergers [e.g., Kmart/Sears and Federated/Mays] have nothing to do with customers, and muddy the waters around the actual needs of consumers.

+ Design alone is NOT the answer. The fastest growing retail channel today consists of "anti-design" stores [e.g., dollar stores, Aldi, ...].

+ Category management perfects the status quo, and prevents category reinvention. So many aisles are at risk of gravitating to another form of distribution [e.g., the center sections of grocery stores are showing 5% loss per year. Where is it going?] and this isn't being addressed. What about new approaches to distribution? [E.g., What if you purchased a detergent plan when you bought your washer/dryer, and never had to go to a grocery store ever again for detergent?].

+ Consumers are time-poor and not willing to spend more time to accommodate larger formats. Interestingly, consumers routinely over inflate by 50% their reported time in-store vs. their actual time! Their perception of time spent is greater than reality and the ease of getting in/out matters to the overall retail experience.

+ As the 'first world', we face the following retail challenge: shopping cart use is declining as shopping missions change; for mass stores, 10-15% of customers are walking out with nothing; deep discounting is on the rise; and too often, the seminal object on the shopping list is NOT there, and consumers wind up making a decision to take EVERYTHING on the list elsewhere.

+ Failing Gender model: we live in a world owned/designed by men and expect women to participate in it. We must make our stores more woman friendly!

+ The service model is changing from one that has been nose to nose [i.e., across a counter] to hip to hip [i.e., next to one another] . This is the Sephora model [Starwood has implemented this, as well as some banks [e.g., WaMu].

+ Technology in-store: make sure it is bullet proof! The only 2 winners to date have been ATM machines and self check-in at airports. Technology that doesn't work in-store is worse than no technology at all.

+ Our relationship to consumption has changed: our symbols of success are in transition. It's no longer about gold, silver and stones which over history represented transportable wealth, particularly in times of war. What is indulgence and what is necessity?

+ It's vital to re-think the labor model, market by market. We live in a shrinking world and need to balance global vs. local identities. Shopping has strong social ramifications: people matter to the overall retail experience and if you and your staff have fun, customers probably will, too!

+ A fundamental shift is taking place with landlords becoming place makers. It's not longer just about real estate and collecting money, but also about programming good public spaces, etc., to encourage people to visit the space and interact in it and with it.

Given all of this, we must recognize that the realities of the setting [e.g., where is the real entrance? where does the experience start?] drive strategy. Amenability and profitability are inextricably linked, and operations, product, design and marketing must work together. That will drive successful innovation at the point of sale. Be sure to wear rubber soled shoes. That way you can think standing up and have a strong connection to the floor [or ground] to understand what is really happening.

Some other thoughts:
+ Windows are powerful: they both attract and repel! [e.g., Victoria's Secret] Make sure your windows create the effect you desire.
+ Aisles: respect body bubbles. Leave sufficient space.
+ Use language appropriate to customers rather than industry jargon.
+ For end caps and displays: sightlines and access are critical to success.
+ Our visual language is evolving faster than both written and spoken words. How we communicate messages is critical. We also need to understand how eyes work and age.

Paco showed us many examples of retail innovation from around the world, including Zara [see What Makes A Destination?]. Four of his other examples -- Roppongi Hills/Tokyo [which sounds a lot like a lifestyle center [see An Architect's View of Better Lifestyle Centers], Sao Paolo's Higienopolis, Three Minute Happiness/Tokyo, and Ibn Battuta/Dubai -- you can read more about in Susan Abbott's sighting of Paco Underhill during the Qualitative Research Conference: Toronto - October 2006.

One last reference from the 6/23/2006 issue of AIArchitect: an article by Russell Boniface titled I Spy A Shopper!. Not only does it feature numerous Paco pictures, but it also recaptures many of the points made in these last two Paco postings - including rubber soled shoes!

Paco refers to shoes to encourage us all to spend time observing firsthand what our consumers do and what they go through when interacting with our retail experiences. After all, how else than by Walking In Her Shoes can we ever create an environment that is more friendly to women?

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