Herb Sorensen – My View of the Future

Herb Sorensen, Scientific Advisor, TNS Global

Two questions:

  1. What could/should “advertising” look like in 2020?

  2. What do we need to do now for this future?

Beginning 100 years ago, self-service swept through retailing with huge benefits to shoppers, retailers and their brand suppliers.  With shoppers selling to themselves in the stores, en mass, the role of brands in the sales process withdrew, largely, from the stores, and retreated to mass media.  Retailers’, as merchant warehousemen mostly played a logistics role: building stores, filling and refilling them with merchandise that the shoppers removed, managing stores and their massive cash intake, mostly at low margins.  These low margins were made possible, partially, by sharing in their suppliers’ margins through selling them “advertising,” both in-store as well as by cooperatively distributing weekly circulars to shoppers at their homes.

The net result of all this was that personal selling skills largely vanished from self-service retail, the CPG/FMCG, non-high end type of retailing.  However, those “personal” selling skills were re-introduced to self-service retail in online stores, Amazon in the van.  The proper paradigm for judging the advent of online retail is NOT the electronic store vs. bricks-and-mortar – those are simply logistics considerations.  The proper paradigm is active selling in a quasi-personal manner, vs. passive selling, really non-selling for the brand or retailer, in the self-service world.  This perspective is absolutely essential to understanding the revolution in bricks retailing that is occurring before our eyes.

In the sense discussed here, the pre-self-service retailing involved mediated sales, where the proprietor or clerk mediated-assisted-expedited the sales in the store.  In contrast, self-service retail is largely unmediated.  For online sales, the most effective selling is digitally mediated sales, where knowledge of the shopper, and of the merchandise is used to algorithmically assist-expedite bringing the shopper to a decision, and closing the sale.

For the personal salesman, the focus must always and ever be on the close of the sale, moving the mind of the customer to meet the mind of the seller, and sealing the transaction/securing payment.  The widespread ignorance of closing and the sales process among retailers and their suppliers is a natural consequence of the unmediated nature of self-service.  One hundred years of incredible success and benefits do not prompt a lot of introspection.  Nor do the very relevant skills developed serving shoppers who are selling themselves, serve well when facing competition with the far advanced personal selling skills, as exhibited by Amazon.

The competition between Amazon and bricks retailers has been extensively discussed, but that competition will move onto the sales floor of some winning bricks retailers, and the battle will not be online vs. bricks.  This is because of the growing Convergence of Online, Mobile and Bricks (COMB) retailing.  That is, mobile-online has far greater significance than “show-rooming” the bricks store.  This greater significance is in the potential for using a shopper’s own smart phone to digitally mediate sales to the shopper, while they are in a bricks store, in much the same way as a personal salesman might.

It is important to see that it is selling skills made effective through digital mediation that is the issue.  It is NOT brain-dead technology.  It is brain-smart, “personal” selling technology.  It is quite clear that Amazon did not stumble into selling skills.  Jeff Bezos is a genius at personal selling, and the software is an expression of those skills.  Those skills are not native to technology, but are native to the natural or trained, personal salesman.

Unfortunately, those skills, relative to shoppers, are largely foreign to logistic retailers and their creative suppliers, founded as they both are in the century old mantra, “Pile it high, and let it fly!”  However, the dominant surviving and thriving retailers will have acquired massive personal selling skills by 2020 (probably through acquisition,) because the skills will be algorithmically embedded in their own customers’ personal shopping assistants, a.k.a., smart phones.

Bear in mind that personal selling involves some degree of knowledge of both the buyer and of the suite of merchandise on offer.  Accessing that knowledge through a smart phone, means that, potentially, digital mediation of the sale can be aware of not only big data, but what we might refer to as Big, BIG data.  We are moving toward a world where there is the potential for everything to be known and communicated, 24/7/365, about everyone and everything, everywhere.  We are moving toward a limitless knowledge/information bath or, more likely, atmosphere.  This is a crucial component of advertising/selling, especially in-store, in 2020.

But the information itself can choke the selling process.  Its availability to assist with the digital mediation of sales, is only potential, without a generous admixture of selling skills.  Advertising without true selling is essentially SPAM.  Consider the following illustration of a pathetic lack of personal selling skills, as reported in the Wall Street Journal:

“If you scan an item of peanut butter and immediately a two-dollar-off coupon pops up to buy a competing brand’s peanut butter, [the retailer] can change customers’ behaviors right there in the aisle.”

[http://online.wsj.com/article/SB10000872396390444772804577623721217119252.html?mod=ITP_businessandfinance_0]

Notice that this type of thinking, which is rampant in the industry, particularly amongst technology types, is essentially tantamount to pumping massive SPAM into the consumer space.  It comes from obsessive interest in getting shoppers to do something that they really have little or no inclination to do, unprompted.  Rather, it is a focus on something the seller wants to do.  No real salesman would ever resort to such inane manipulation.  And given the coming onslaught of opportunity to engage in this effrontery, shoppers will become more advanced in filtering, and permitting a selection of ostensible communicators to reach them.

So . . . as the total knowledge atmosphere descends over the land, it behoves those who wish to mediate that cloud to shoppers to become more skillful in assisting shoppers to do what shoppers are already inclined, and desire to do.  This will be advertising/selling at its finest.  Very customized and personal, very targeted and limited, to match both the real and potential interest of individual shoppers.  There will be a small cadre of caring, thoughtful, assistants to shoppers, who gain the trust of the shoppers, and are allowed through the shoppers’ SPAM filters.  This is what GREAT salesmen do.

The principles of caring more about the customer than you do about your own interests in selling, are not new.  We see GREAT examples that seem to demonstrate this in information-atmosphere selling, already.  And these are likely to be the winners in the decades ahead.

[Post script: Many conceive that retailers will drive the new paradigm of personal selling.  Maybe.  But it seems more likely that the personal digital sales assistant discussed here will be unchained from this or that retailer.  More likely, the path will resemble that taken by credit cards.  Stores developed and promoted their own proprietary credit cards, and were a powerful force in getting shoppers to accept them.  This can happen with shopper apps, too, especially for payments mediated by an electronic wallet/smart phone.  In any event, more likely the personal digital assistant will transcend retail spaces.  Stores will have to learn to sell, or die.]