I've just bought a bar of soap. It isn't utilitarian soap, the simple white variety that comes boxed in a six-pack at the grocery store. It's Italian, handmade, and softly scented with pomegranate. (Or so the pretty paper tells me; I probably couldn't sniff the difference between a pomegranate and a papaya.) The clerk who sold it to me wrapped my soap in tissue, placed it in a small silver shopping bag, and then tied the handles with a delicate band of tulle.
As I stroll out of this store located on a skyway in downtown Minneapolis, I ponder that bar of soap. It cost, absurdly, $14.97. This, I am rational enough to realize, is too much money for a bar of soap. I don't need pomegranate soap. I don't even really want it. If you asked me why I bought it, I'm not sure I could offer any acceptable reason.
But interestingly, the store where I bought it might try to suggest some ideas. The little boutique is called Once Famous, and its entire reason for existence is to better understand shoppers, what they buy, and why. The store is part of FAME, a Minneapolis-based retail brand agency. It's a hybrid of retail store (its posh products--velvety throw blankets, designer dog beds, chandeliers made from porcelain teacups--bring the boutique a small profit) and research lab (cameras and microphones are hooked up throughout the shop, allowing the agency to observe customers as they move through the store).
The goal? To understand what drives people to buy merchandise. How do they make decisions? What sparks that impulse buy? What kind of display works for what kind of product? What kind of packaging sells? Inside Once Famous, my opinions, and those of every other shopper, matter immensely. During taping sessions, which are sporadic but announced by a large sign in the doorway, the agency draws conclusions about our opinions by watching every grimace, listening to every muttered comment, and counting every second I spend in front of a display case, fluffing a pillow or comparing the smells of soaps.
Once upon a time, storeowners would figure out what customers wanted by noticing what merchandise sold and what didn't. Now, ever more concerned with the nuances of a boutique's environment or a product's packaging, retailers don't necessarily try to determine customer wishes themselves: They hire a brand agency--a firm that focuses on helping retailers create successful brands--to do it. Most recently, one of those agencies, FAME, has gone back to the way of a neighborhood shop in some aspects, becoming the first agency in the country to open and operate its own retail store--so that it can watch and understand what customers do there. It's an odd, self-fulfilling circle, perhaps heralding a new retail world in which consumers hold ever more power.
And it's certainly garnering attention. Since Once Famous opened this past November, media outlets have been increasingly drawn to the story (a spokesperson for the company rattles off an impressive list of national newspapers, magazines, and TV networks that are interested in doing stories on the boutique/research lab). Part of the fascination lies in the store's innovation, part in the questions it raises about privacy. I admit I was intrigued. That's why I stopped in to look around.
But despite all the hoopla, I can't help wondering whether, even after all this effort, retailers are any closer to understanding what makes me come back to the stores I love or swear off those I can't stand.
You see, on reflection I realized I'd bought that soap out of guilt. I'd been in the boutique--and been the only customer in there--for what seemed like forever, so I figured I'd better buy something. The pomegranate soap smelled better than the tomato or the plum. And that's how it ended up in my little silver shopping bag.
Good retailers have probably always instinctually understood what customers want: salespeople who know their merchandise, talk to shoppers, and respond to their needs. But we've probably all spent at least one afternoon in a cavernous warehouse store brimming with deeply discounted products--and nary a sales associate to answer a simple question. "You could be bleeding on the floor and they wouldn't notice," quips Jim Pounds, vice president and media director at Periscope, a Minneapolis advertising firm. "Now these big corporations are stumbling around, acting like human beings. It's hard for them to do this. All this process is part of that. They do all they can to observe every blink and figure out what it means. That's how competitive it really is."
Enter FAME, and Once Famous, its boutique. "We created a store that allows us to really observe customers. Not every retailer has those resources in place," explains Jeri Quest, FAME's executive vice president for strategic development. "For retailers, speed is everything. You need to make good relationships with customers, quickly. Customers today have a million choices."
Is there a mathematical equation that guarantees better sales? Perhaps not, but Once Famous is trying to get as close as possible, scientifically, through its observations of shoppers. "Ninety percent of all purchases are made on impulse," Quest offers. "We want to understand how people make decisions and what are the triggers of excitement around buying something. We can get really close to customers at that point of decision making."