The Company Store
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."
The science of observing shoppers' behavior--or "retail ethnography"--is nothing new. In fact, explains Dave Brennan, a professor of marketing at the University of St. Thomas's College of Business, a century ago F.W. Woolworth watched shoppers as he set about selecting new locations for his five-and-dimes. Woolworth would examine existing stores, count the number of passersby, the number of people who stopped in, the number of people who bought merchandise, and the amount of the average sale. From that information he'd build a model, Brennan says, and use it to decide where to open new stores.
"It's the same type of technique they're using," Brennan says of Once Famous's research. "When you have lots and lots of stores and lots of markets, you have to systematize how you present the merchandise. You have to organize it in a way that's effective."
Whenever the store is doing research with a taping session, the staff puts a large sign in the doorway explaining that customers entering the store will be video- and audio-taped. (Legally, any concerns about Once Famous's surveillance can be easily dispensed with, explains Mike Steenson, a professor at William Mitchell College of Law, because to prove an invasion of privacy, the law requires that there be a "reasonable expectation" of privacy in the first place. "If you're walking down the street, if you're walking through Marshall Field's, I don't think you have a reasonable expectation of privacy," Steenson says. "I can't draw a circle around myself and say, 'You can't invade that.'")
Even when the store is not in taping mode (as it wasn't the day I bought my soap), the cheery sales associates are more than eager to explain its mission and method. And they may go so far as to ask customers followup questions or invite them to participate in a focus group, placing them in a position to opine, not simply act as they normally would.
But this creates another conundrum: If the idea is to catch customers' behavior in all its brutal honesty, doesn't announcing the experiment detract from the realism? "Ethically, I'd be a little more comfortable when people know," Periscope's Pounds muses. "But less comfortable with the outcome. All of a sudden you're on and expected to perform."
That's not a concern for FAME's Quest. "People tend to forget they're being filmed," she says. Quest explains that experiments have offered FAME interesting details on how people shop, including, she notes, the different ways in which men and women decide what to buy. ("Women find an object they like and visit it," Quest says. "Men look at how it's made, what's the construction.") The tests are usually set up to search for a specific piece of data, which clients can use in their own showrooms, in an effort to "build bridges" to customers and, ultimately, increase sales.
Though Quest won't discuss specific clients or tests, FAME's customer list includes such big-name companies as 3M, Foot Locker, Wilsons Leather, and Tupperware. Quest isn't sure exactly how many tests FAME has administered since it launched Once Famous, but she reports that clients have found the experiments useful. Some, she says, are even exploring the possibility of clearing out the entire store to test their own merchandise.
The cost of an experiment, Quest adds, could range from $15,000 to $100,000, depending on the scope of the project. For those fees, FAME designs and administers the test, then interprets the data. The video and audio tapes, she stresses, remain in FAME's possession.
Once Famous may offer an interesting snapshot of consumer behavior, but Periscope's Pounds doesn't believe the store's observations alone are enough to predict the attitudes of the masses. "You can say in this case, at this time, in this place, with these three shoppers, this is what happened," he says. "You can't necessarily say that in all cases, at all times, in this set of circumstances, this is what will happen."
And that, offers St. Thomas's Brennan, is because no matter how much information marketers collect, they'll never quite get inside the minds of shoppers. "It's useful to see patterns that emerge. But interpretation becomes very difficult," he says. "Knowing why people do what they do is still speculative."
Shoppers today are bombarded by marketing ploys from direct mail and telemarketing. Most recently, online retailers collect data about where you've shopped and what you've bought and besiege you with tailored pitches. The information is copious, and some of it redundant. Yet I'd be curious to know whether all that data about my shopping habits would really represent a true picture of me. Perhaps we are all so predictable in our buying patterns that a few market tests will tell retailers who we are and what we want. Or maybe, as I'd like to believe, our impulses change from time to time--regardless of whether we're being observed on camera.
"I don't know if this is the answer, but it's an attempt at an answer," says Pounds. "Maybe we'll be interested for ten seconds or ten years. That's the difference between a weak gimmick that passes into oblivion and a real innovation. Time allowed, it will be revealed for what it is."
Until then, I guess we'll see if we shoppers are as mighty as Once Famous appears to make us, and whether our behavior can really change the retail world. As for my guilt-inspired soap purchase, would I make it again? To tell the truth, I don't know. Maybe someday Once Famous will be able to tell me.
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