Five Crucial Lessons from Paco Underhill’s Masterclass on The Science of Shopping

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For its 60th year, the Philippine Association of National Advertisers (PANA), in partnership with SM, aims to revolutionize the way advertising conferences are organized in the Philippines through a series of master class sessions with internationally renowned retail experts. The first of these seminars, dubbed the PANA Brand Master Sessions, was a conference with Paco Underhill, founder of the Science of Shopping, on October 29, 2018 at Conrad Manila.

The event was followed the next day by a store clinic, also facilitated by Underhill, and held exclusively for event sponsors SM Supermalls, Nestle Philippines, P&G Philippines, and Phoenix Fuel.

Underhill is widely considered one of the world’s foremost authorities on shopping anthropology: a school of thought that blends market research with behavioral sciences. His work on understanding the “whys” of consumer behavior has led to a successful 30-year research and consultancy business, Envirosell, and several best-selling books, including “Why We Buy: The Science of Shopping.”

Having spent a portion of his younger years in the Philippines, Underhill taught numerous principles behind the science of shopping with an intimate understanding of the average Filipino’s shopping psychology. Among the lessons he shared during the seminar were the following:

1. Observation is Still the Best Research Method

The key to Underhill’s success lies in the fact that he’d gone back to basics on market research. Instead of conducting surveys, poring over sales data, and holding focus group discussions, he encouraged actually watching how customers behave in stores.

“What people do and what people say they do are often different. I could follow somebody through a shopping mall and stop them in the parking lot, and they'll tell you that they shopped in stores that aren't in the mall,” Underhill said. “They'll tell me that bought things that I know aren't in their shopping bag. And it isn't that they're lying, it's just that so much of what we do is unconscious. What do we look at? How do we process it?”

The insights received from decades of work with Envirosell proved to be invaluable, and it’s given Underhill the authority to give this advice: “Many of us have gotten very comfortable sitting in our offices, away from the floor. We make decisions staring into a spreadsheet on our computer screens. I am urging you, on behalf of the science of shopping, to go to the floor and take a look.”

2. Art Needs to Be Part of the Equation

Underhill pointed out a recent tendency to favour data-driven strategy over creative, artistic executions. Although every marketing campaign can gain significant benefits from strategies derived from good, hard data, there’s a need to address the human impact of branding, which only a tactical artistic execution can address. People, after all, are drawn more to aesthetics, convenience, and relatability than scientific fact. Campaigns and executions must create a balance between science and art to maximize their potential.

“Strategy is important. But I am witness to the fact however terrific your strategy is, it is tactical execution that often drives our success,” he explained. “We need a better combination of art and science in design. Whether I'm talking about the design of a package, the design of a store, the design of our website—that meeting of art and science is critical to our long-term success.”

3. Workplace Gender Balance is in Every Marketer’s Best Interests

Recent research has shown that female consumers tend to play a greater role in influencing trends in buyer behavior than male consumers. However, the current structure of the advertising, marketing, and sales workplace often skews towards males.

Underhill shared: “You know what is ironic? It's that one of the last creative professions to be gender-integrated is commercial design. If I could think of a generation of store planners, it is very difficult for me to find a female store planner who is over age 50. It's very difficult for me to find a senior packaging designer who's female and over age 50.” 

“We still live in a world that largely owned by men, managed by men, designed by men—and yet our most important customer is a woman,” he added.

In order to capture the most powerful consumer, then, the industry needs to adapt by bringing in and developing more female talent, and by training male talents in catering to the influential demographic.

4. Brand Builders Need to Catch Up to the Consumer

Advances in information technology have allowed consumers to be better informed, and in a much more efficient manner than ever before. This has led to a faster-evolving market, with which the advertising and sales industries are struggling to keep up.

“There's a fundamental understanding that the world of shopping is going to change more in the immediate future than it has in the past 50 years,” Underhill said. “And many of us have every reason to be very, very nervous. The way I buy milk, the way I buy coffee, the way I buy laundry soap is going to change. And how do you respond to that process?”

One of the most effective ways to respond is to recognize where the consumer draws value, learn how this behavior is informed, and adapt accordingly, before the industry itself is left behind.

“We need to pay more attention, and currently, our consumer deserves better than what they are getting right now. And you know what? The consumer is ahead of us. They are already processing the world in a way faster than we are. In emerging markets like the Philippines, understanding that consumer who lives in Urdaneta Village or Forbes Park, they're responding often to global standards. Understanding what does a 12-year-old living in Quezon City—what is her understanding of worth? How does she process this information at age 12? How is our emerging middle class?”

“We need to understand how that learning happens, and how do we respond to it?”

5. Digital Marketing and Services are Mandatory in Today’s World

“Connectivity has joined Maslow's Hierarchy of Needs. We need warmth, we need shelter, we need sex, and we need good WiFi service,” Underhill joked. This, however, did underscore the importance of developing strong online marketing and services. Advertisers and brand-builders need to study markets at the forefront of digital marketing and their learnings to their own efforts.

“The nature of how we look at the screen, and how we process information off that screen, and how it affects our decision-making is really amazing. That is changing so fast,” shared Underhill. “And do you know what's interesting? It's that the edge of where it's changing isn't in North America. It isn't in Europe. It's in places Brazil or Korea. I love going to Seoul to look at it because I can see trend five years ahead of when they happen.”

He also illustrated, by way of example, how buyer behavior isn’t shaped by technology per se, but by the value it brings to the average consumer’s everyday life: “The way she [the customer] is using that phone, she is not particularly concerned about what the technology is in it, she's concerned about how it is going to affect the quality of her life and what she does. And she is using it everywhere. How many hours a day are you staring into your screen?”

“Even the global vendors of digital services—from Samsung to Apple to Microsoft to Intel to Google to Ali Baba—they're all scrambling to catch up with where the consumer is taking their devices and what they're doing.”

This was just a small portion of the wealth of knowledge Paco Underhill extended to PANA’s brand builders and partners, making the seminar a smashing success. With more experts as esteemed as Underhill himself lined up for future events, the PANA Brand Masters Sessions are poised to be a major game-changer in the Philippine advertising industry.