Book review: Shoptimism

Authored by Lee Eisenberg in 2009 (ISBN 978-0-7432-9625-0).

This marks my second reading and first review of this entertaining title. Mr. Eisenberg penned this work during the initial stages of the Great Recession. Eisenberg felt that the "American consumer will keep on buying no matter what", in the words of the subtitle. He was only somewhat correct.

Eisenberg divides his work into two sections: 1) what sellers and marketers do to prompt buying, and 2) what motivates buyers.

A former head of marketing at Lands' End, his research included personal professional experience; interviews with executives from retailers and a advertising agencies; transparent and opaque observations of shoppers; and personal buying experience. Part of his personal professional experience includes a stint at Target for the purposes of research. He learned about loss prevention (shoplifting); treating customers nicely regardless of race, age, and disability; and where in the store the various categories of merchandise were offered. He learned nothing about individual products. When asked which blender was better he could do nothing more than read the selling points on the box.

He concludes that there is no conclusion: the sell-side folks do have their tricks, and they are sometimes successful, but not always. On the buy-side there are classic and romantic buyers, but even those labels can seldom be applied without error to any individual.

Eisenberg uses clever phrasing throughout. Classic male buyers, such as myself, are "grab-and-go" types during solitary shopping and "wait-and-whiners" when accompanying their wives. Women who buy too much are impulsive/compulsive shoppers; men who buy too much are "collectors". Retailers, marketers and advertisers struggle to discover/describe the "Unified Buy Theory".

On the "sell" side he describes the various companies that attempt to throw buyers into buckets, and what strategies buyers tend to respond to. I remember, as a law-school student in Boston, being asked to view videos for thirty minutes, for which I would be remunerated five dollars. While I watched videos consisting of, for example, orange juice containers of various brands on store shelves, video cameras pointed at my eyes recorded which containers I focused on first, presumably giving a retailer tips about the kind of packaging that will move merchandise fastest. That was quantitative research, or as Eisenberg calls it, "Quant". "Quals", on the other hand, talk to consumers about their likes and dislikes.

When a retailer wants to encourage a sale it "anchors" the price. Classic buyers for sure, and some romantic buyers as well, do not want to overpay. What, then, is a fair price? How much should a jacket cost? Buyers in general are not familiar with the costs of material, labor, shipping, finance, etc., and so need help. That help comes in the form of anchors. While at Lands' End Eisenberg observed that a jacket would be placed on a page with two other jackets (decoys). The "hero" is the jacket the retailer wants to sell. It is priced between the other two, has features the cheaper one does not and lacks features available in the high-end model. The retailer wants you to buy something and does not particularly care which. By placing the three products on the same page the consumer is presented with an idea of what these things should cost, and the mid-priced option suddenly seems reasonable.

Pricing is an art. Odd prices, such as $4.78, tend to be viewed as bargains. All of us are familiar with prices that end in nines; the nine signifies bargain. Zero signifies quality. Hence prices at upscale restaurants are even dollar amounts; at McDonald's they end in a nine.

There is no price better than free, but why is that. What difference does it matter if it costs one penny. The answer is that risk inheres with all buying: you might be disappointed, and classic/tightwad buyers feel this disappointment more acutely than romantic spendthrifts. A price of zero shouts "no pain here!"