‘Indian retail is in the 19th century’

‘Indian retail is in the 19th century’
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First Published: Sun, May 25 2008. 11 51 PM IST

Updated: Sun, May 25 2008. 11 51 PM IST
It was by observing people as they filled their shopping carts that 56-year-old Paco Underhill built one of the most successful market research and consultancy companies in the world, Envirosell Inc.
The company, which defines its work as spying on shoppers, was set up in 1986, and has since grown into a multimillion-dollar firm, servicing one-third of the Fortune 100 firms, including major brands, merchants and banks such as Starbucks, McDonald’s, Unilever, Philips, Adidas, Exxon Mobil, Microsoft, Hewlett-Packard, Citibank and Lloyd’s Bank.
Decoding consumer behaviour and successfully applying its unique research methodologies in 26 countries across six continents has made Envirosell one of the foremost retail consultants globally.
Underhill, known as the guru of retail anthropology, has also authored books such as Why We Buy: The Science of Shopping and The Call of the Mall: How We Shop, which have topped best-seller lists. He is currently writing another book, tentatively named Worship of the Goddesses, that looks at the working woman’s role in changing the retail landscape.
In India, Envirosell has partnered with New Delhi-based retail consultancy firm Technopak Advisors Pvt. Ltd through its sister company MindScape.
In an interview with Mint, Underhill says that mom-and-pop stores will be part of India’s retail landscape for the next 10 years but that people must accept change and be able to tolerate a Tesco or a Wal-Mart. Edited excerpts:
Is there really a science to shopping?
Is there a science to the way we move? I think retail is very much an art form, and I often tell merchants, I am the frame maker, and I advise them to focus all their energies inside the frame. Yes, there is a science behind everything we do—the way we move and the way we interact differently with each product. Even whether we are right-handed or the way the aisles are arranged affects our buying decisions. We all have different hormonal responses which, when observed, highlight certain patterns in the way we do things.
What is the role of a retail anthropologist?
Let me just put it this way—when I was young, I had a terrible stutter that I corrected simply by watching the way other people talk. We are a company that bases our work on observation, and that is exactly what I do.
Envirosell has field workers who have been working with the company for more than 10 years—we do research on the brands we are working on, and then we go to the stores and observe consumers during the buying process and at the point of sale. We also look at videotapes—we have some 60,000-80,000 hours of videotape (all together), which is actually seen by me and my guys. In addition, we talk to people in the stores, in the aisles, and ask them who they are and why they are buying or looking at what they are. After collecting the data, we convert it into actionable data.
Is there data proving that the research you do bears results?
We work with more than a third of all the companies on the Fortune 100 list, and more than three-fourths of them have come back to us for the second time. We don’t need additional data to tell us it works. Also, much of what we do is formulated in common sense—I am not building theories in forums, I am building successes by solving practical problems.
With so many different methodologies in research available now, how does Envirosell stand out?
My office in New York is on 30th and Broadway, an area accessible to all. Every week, I have new people knocking at my door with new methodologies of research.
Today, there is no end to the number of research tools and methods people come out with. But, I feel there is a vast difference in collecting data and actually converting it into actionable solutions for your clients. So, whether we are dealing with a Unilever or a Nokia, a jewellery or a grocery store, we will provide research, but we also wait for the change to happen. And to achieve that change, rather than just conduct surveys, we at Envirosell learn by watching—the way a child watches the ways of the world by observing its parents.
We have used observational techniques used in anthropology along with skills of psychology to understand consumer behaviour.
My typical employee is in the field at nights and on weekends, when people are shopping, so we can be with them in the aisles of stores they visit to learn from their behaviour rather than just ask them questions.
What are your views on the retail landscape in India?
Indian retail is in the 19th century, and the Indian consumer has every right to be angry—because if the country has steel plants and technology, why does a digital camera cost three times what it does in New York?
In the field of retail, India trails other emerging markets by a huge margin because people are still holding on to traditional mannerisms, and these mom-and-pop stores will be part of the country’s retail landscape for the next 10 years. The country needs to understand that retail is about life and death, but keeping a store alive just for legacy doesn’t make sense.
India should understand that change is fundamentally healthy, and that they should be able to tolerate a Tesco and a Wal-Mart here because if you want to be a global player, you have to be a global player.
Everywhere you go, there is a palpable sense of national pride that says ‘this is our time’. But, in the midst of national pride, there is very little civic pride—India and her cities should look better than they do, and this is possible if people begin to accept change.
Is consumer behaviour in India different from that in other markets?
Last year, we worked in 26 countries (including India), and there were a few common issues between them. All across the world, our visual language is evolving faster, thanks to the Internet and the movies. We know what we want by looking at it. Second, we live in a world which is owned, managed and designed by men; yet, we expect women to participate in it. Markets such as India, Japan, Guatemala have women in the workforce, but how many marketers actually ask the question, is this women-friendly? Third, most consumers, if asked whether they are money-poor or time- poor, say it is time that is scarce. So, the answer is, India’s consumer behaviour is no different than the rest of the world because what is local and what is global is no longer relevant—it doesn’t matter if you are a Nestle, a Citibank or a Reliance Mobile. The way people use products is different even in Pune and Bangalore, much less in New York or Sao Paulo. It is execution that is critical.
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First Published: Sun, May 25 2008. 11 51 PM IST