PROFILE

Herb Sorensen

Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC

Herb Sorensen is the winner of the 2013 Charles Coolidge Parlin Award and the 2007 EXPLOR Award, both from the American Marketing Association. He was also listed among Fast Company’s 2004 Top 50 Innovators.

Herb began his career as a chemist with interests in quantum mechanics, electronic structures and metabolism. From the faculty of Colorado State University in 1971 he moved into the business world as a board certified clinical chemist, subsequently establishing his own consulting and laboratory business providing product development and other services (including consumer surveys) to the packaged goods industry.

Since the late 1970’s Dr. Sorensen’s market research has focused on shoppers at their points-of-purchase. Hence, the continuing interest of his “in-store research company” in shoppers and their relationships to the stores they shop in and the products they buy.

Herb has a Ph.D. in biochemistry from the University of California, a master’s degree in biochemistry and nutrition from Nebraska and undergraduate majors in chemistry and mathematics. He has been an active member of the American Marketing Association and other associations for many years. His papers and presentations have addressed a wide range of topics, most recently his electronic shopper tracking system, PathTracker®.

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  • Posted on: 05/24/2017

    Will Amazon’s use of data transform how retailers operate stores?

    Notice that Amazon's prime focus is on what we call top sellers. That is, across the shopping crowd, the book that is overwhelmingly favored BY THE SHOPPERS! What a concept! Other brick-and-mortar retailers think they are really clever by NOT calling out what shoppers mostly want to buy, thinking that "forcing" them to search may lead them to buy something else, too!For brick-and-mortar retailers this is an insane anti-sales strategy that has lead to industry-wide suppression of sales. Look at their business model and it all makes sense. Their number one source of profits comes from their SUPPLIERS, NOT their customers. (And guess who is expecting their suppliers to come give them relief from the relentless assault by Amazon?)And so brick-and-mortar retailers are sitting ducks just waiting for Amazon to continue gorging on THEIR businesses. The difference is that Amazon actually focuses on the shopper, not the supplier. There are a few brick-and-mortar exceptions, Costco being the preeminent example. Hmmm! So Costco is now the number two global retailer according to Kantar's latest rankings. Did you notice all the sudden attention to what Costco is doing? Me neither. It's "crickets" from an industry absorbed by their own losing thoughts.
  • Posted on: 05/11/2017

    Is marketing research suffering from an identity crisis?

    It's really quite simple: RESEARCH is the way you gain INSIGHTS. However, it can be a two-way street. The best way to do research begins with possibly even "anecdotal" observations that prompt tentative insights. This is the beginning of empiricism, the door to science. Then comes the sometimes-hard work of naming what is being observed, and counting observations across time and environments. That meets Lord Kelvin's requirement: "If your knowledge cannot be expressed in numbers, it is of a meager and unsatisfactory sort."As numbers accrue, the mathematical relations appear, and now can be represented in formulas. Combining multiple formulas delivers a mathematical model. NOW you have INSIGHT!
  • Posted on: 04/17/2017

    Are outlet malls an outlier?

    I notice the tendency to refer to bricks "retailing" as if it is one thing. I do that myself, sometimes. But the reality is that the two branches are quite distinct, though related. The dominant branch is the "self-service, Fast Moving Consumer Goods, FMCG" branch. It is dominant because it's pinnacle is food -- hence, GROCERIES! The other branch is everything else, often sold in a "service" mode, with a salesperson mediating a large share of the sales.These are radically different businesses, even if closely related. For example, it was the supermarkets 100 years ago that drove the retail revolution, with sky-rocketing efficiency, plunging prices, and massive gross sales. Walmart began, not as a grocer, but as a "supermarket" for non-groceries. But it wasn't until a few decades later that they plunged seriously into groceries. And therein lies the tale of becoming the world's largest retailer, by a factor of about 4, presently. The reason is simple: FOOD SALES DRIVE TRAFFIC! And that is largely SELF-service traffic.The reason for providing this detail is because outlet malls typically locate in somewhat rural areas with large passing traffic, and do not have the MASSIVE "Parked Capital" that both supermarkets and malls do have. As I noted earlier, three years ago, THE PROBLEM for bricks retail is "parked capital." Parked capital is capital that is sitting idly in massive rat-maze stores, where the stores themselves are half the component of parked capital, the other half being displayed inventory that is not moving. The "parking" is a consequence of the very minor contribution to total store sales from that capital.This problem of parked capital is moving like a slaughtering army through dithering retailers. Some seem to think layering on an online selling capability will hold the slaughtering forces at bay. Tsk, TSK! And Amazon is beginning to build bricks stores and operations. :-(
  • Posted on: 04/10/2017

    Should the same-store sales metric be retired?

    Absolutely do NOT abandon "same-store" metrics, although it must realistically be restated as "same trade area," including BOTH online and in-store sales. Managing online and in-store separately will lead to further "murder" of the in-store business. Of course if top management really does see the two manifestations of their business as two different businesses, they have already sounded the death knell for their in-store business, which can't possibly survive without drastically reducing the vast wastage of their "parked capital." See: "The Problem: "Parked" Capital."It's not just about giving full credit to the bricks store for online purchases made by their usual shoppers, but unless the store is credited with both modes of purchase, then they must be competitors -- online vs. bricks. This is insane from a management point of view. It is helpful that this is being discussed in this forum, but sad that the industry has not long since resolved these issues. (And I don't care how difficult the metrics are. If your IT people are stuck in the past century, get some new ones!)The bricks store MUST be promoting online sales, EVEN FROM WITHIN THE BRICKS STORE!!! Just as the online store MUST be promoting bricks sales. The two modes are complementary. Why do you think Amazon is building bricks stores (and notice how they are doing it.)It has been several years that I have been touting the Convergence of Online, Mobile and Bricks retailing (COMB.) Possibly people don't understand what the word "convergence" means? ;-)
  • Posted on: 04/05/2017

    BrainTrust throwdown: Is it inevitable that tech companies will dominate retail?

    And here's another current link:"Amazon is worth almost twice as much as Walmart."
  • Posted on: 04/05/2017

    BrainTrust throwdown: Is it inevitable that tech companies will dominate retail?

    I have quite a series of reports on this issue, just from the past couple of weeks. But will begin my comments with my long-term observation that "As long as people live in brick-and-mortar houses, they WILL be shopping in brick-and-mortar stores." Here are the most relevant links I have to this discussion:"Amazon Wants Cheerios, Oreos and Other Brands to Bypass Wal-Mart.""Amazon and Walmart are in an all-out price war that is terrifying America’s biggest brands.""Walmart's e-commerce binge is one big Silicon Valley bailout."I heartily endorse the view in this third link, which I believe supports Ryan's side of the discussion. The fundamental problem is that brick-and-mortar retailers are clueless as to what the PROBLEM is, as are their techie adjuncts. It's not unnatural that merchant warehousemen relying on unpaid stock-pickers (shoppers) to sell themselves would be oblivious to true salesmanship. THAT is the secret sauce of Bezos, not all the brilliant execution. It is the selling PROCESS that really distinguishes Amazon! (See: Selling Like Amazon... in Bricks & Mortar Stores!)In sad defense of the struggling/dying brick-and-mortar retailers, their magnificent service over the past century is recognized. But sorry -- THIS is the 21st century. Let he who hath ears to hear, HEAR!
  • Posted on: 03/17/2017

    Are Amazon’s boxes prime ad real estate?

    The reality is that, with the massive impact of internet/social media, the number of places one can attempt to use to communicate are exploding. But things that don't disappear in seconds -- like shipping boxes -- are a perfectly logical place to use for advertising.The problem here is what I call the "visual cacophony," most prominently seen in stores with 40,000 different packages all shouting from the shelves, "Buy me!" Every package is a visual "voice" calling for attention. Using a shipping box for the same type of purpose makes some sense.But the problem is, what is the cost both in dollars to the advertiser and further advertising "noise" in the world of the shopper? It's hard to tell, but this one (shipping boxes) seems like a fairly innocuous effort at least.I am reminded of John Wanamaker's complaint that "Half of my advertising dollars are wasted; but I don't know which half!" Here is the reality: There are literally trillions of dollars sloshing around the economic system -- "free cash" in a sense. These are profits that companies have accrued and now their owners/boards are looking for places to spend some of that money to make those businesses even bigger and more healthy.The two main paths (other than becoming more efficient operationally) to a bigger business are through building a better mousetrap (research and development) or trying to reach potential buyers better (marketing and sales). Both of these are SERIOUSLY fraught enterprises, both subject to Wanamaker's complaint. The success of both are easily measured in top-line sales, but both get complicated when multiple projects of both types are being pushed into the market: multiple product enhancements and multiple marketing/advertising initiatives.Given the reality of this situation, it is no wonder that even multi-billion dollar companies die out over time, especially as the market itself changes. Failing to invest in R&D and M&S WILL LEAD TO DEATH OF THE BUSINESS. But both thrive on genius, not necessarily sharp-pencil accounting. As Arie De Geus explains in "The Living Company" in Harvard Business Review, even giant companies typically have life spans shorter than most humans. Wake up, wake UP, WAKE UP!
  • Posted on: 02/21/2017

    Third-party e-commerce fulfillers: Friend or foe to the grocers?

    I'm not sure that even bricks retailers that do their own online service are going to have any significant success. It's a little like all the hootin' and hollerin' about smartphones in-store a few years back. I was a cheerleader myself! And this amounted to nothing much, except in a few specialized situations. Now we have BOPIS or click-and-collect. I hate to say it, but it looks like Walmart is squandering billions on what will be seen as possibly the final error in them passing their peak growth, and beginning the long descent A&P already took, and Sears is far gone on.It's a logistics issue, pure and simple. Bricks retailers receive their merchandise in the store on pallets -- that may be delivered from suppliers with SUPER EFFICIENCY. THEN, they PAY stock clerks to move those pallets to the displays across their giant neighborhood WAREHOUSE, also known as a store. UNPAID stock pickers, also known as SHOPPERS, do all the stock-picking and movement to wherever they want/need the stuff -- home, office or elsewhere. With a single impediment on the way -- checkout.You layer an online operation on top of that and it is near disaster. Beginning with, "how are you going to now pay your own stock pickers to replace the unpaid shoppers?" And that is simply the tip of the iceberg, in competing with Amazon, who has built a supplier to shopper delivery system built on SINGLE items rather than the bricks store's BASKET. Amazon has spent decades building a largely automated logistic system from supplier to shopper, based on single item deliveries to shoppers.Bricks retailers have spent a century building the fore-runner premier logistics system based on pallet deliveries to the store. Unless bricks and clicks CONVERGE, ruin and disaster awaits the bricks store. BECAUSE, I believe Amazon is building a converged bricks-and-clicks store in Seattle right now -- Amazon Go. I'm relying on Amazon's reports, and will visit the store when it is open to the public.I'm expecting that Amazon Go will represent convergence, not simply pasting a less than stellar Amazon competitor onto antiquated bricks thinking. If you are a bricks retailer, you need to think very hard about how to build the NEW retail operation, using ALL the best methodology, both online and bricks, into a NEW operation. Then see how what you have can be evolved into THAT. But don't let the albatross of century old retail thinking, mixed with new whiz bang online thinking, that doesn't understand the bricks store, drive your plans.I've given it my own best shot in the first chapter of the second edition of "Inside the Mind of the Shopper: The Science of Retailing."
  • Posted on: 02/03/2017

    Why do so few shoppers think of BOPIS as a ‘smooth’ process?

    Just maybe it IS disastrous, often enough, to be turning people off. I don't have an answer, but I certainly see the problem clearly: Bricks retailers are "merchant warehousemen," skilled in managing inventory through stores by delivering pallets there. Their stock clerks move that merchandise to displays in mass amounts. And their unpaid "stock-pickers", aka shoppers, pick individual items for transport to checkout -- and home.It's mass (pallet) movement, vs. item, individual purchase movement. And BOPIS expects the retailer to do the stock-picking FOR the shopper. (Who's paying for THAT?)Wonder why the world's premier logistics organization -- Walmart -- struggles to make this work? You think paying stock-pickers is just free, and easy-peasy for an industry built on unpaid stock-pickers? This marginal disaster is destined to continue for a long time, until some realistic solutions are found. Hint: It will probably NOT involve 50,000 sq. ft. stores. (Here comes Amazon Go!)
  • Posted on: 01/11/2017

    Are reports on the death of newspapers greatly exaggerated?

    I consider Ben's comment to be a stark injection of truth about the newspaper business. I subscribe to 2 daily national print "news papers," and another 3-4 for online access only — plus a couple blogs. My comment is only indirectly about their advertising, since I only see it incidentally, and am scanning their content with a few deep dives (read a "lengthy" article) daily.I note that in the recent election, at least one newspaper frankly stated their dedication to the losing party, and most of the others either actually did dedicate themselves to the losing party, hoping either readers would not notice, or would cheer them on. This public abdication of their ostensible role as NEWS papers, is just adding to their evolution to smallness.I'm saying this not to gripe about their coverage, but to point out what the public has progressively recognized, and reacted to. Calling themselves "news" papers is FALSE advertising, and that falsity is seriously impacting their circulations.From my limited knowledge of the newspaper business over the past couple hundred years, I doubt that things have changed that much in terms of the partisanship — NON NEWS — of the papers. But what has changed is the advent of the smartphone, thanks initially to Steve Jobs. This guy played a MAJOR role in social evolution, and we very rarely hear much about that. But stitching "every" human being in the world to the intimacy of even a potential connection to every other human, means the wide filtering impact of ALL mass media is attenuated.There is no point in looking at what is going on in the world of retail in some kind of mechanical detail: shoppers are buying THIS, retailers are delivering in THESE ways, THERE IS A GLOBAL SUPPLY CHAIN BATTLE of pallets to the store, vs. items to the customer, etc., etc. All of this is being driven by the "connected" shopper, advertising is in a terrible ferment, trying to monetize connection to consumers. That connection is being SERIOUSLY diluted by the diffusion of media types — as the audience is forcing by their wider connections.Prepare to live in a totally connected human race, and "you ain't seen nuthin' yet!" ;-)
  • Posted on: 01/05/2017

    Are convenience stores in for a big year in 2017?

    Bear in mind that supermarkets are simply convenience stores with poorly-managed big long floppy tails! So the c-store is properly the dominant brick-and-mortar store of the future, at probably two to three times the size to provide more food service and selected access to the long tail of merchandise.Disclosure: It’s been my goal for some time to help someone build the first “million item” c-store chain. I have a patent pending on “The Long Tail Accelerator,” a device/method designed to permit the SKU offering to balloon from a few thousand SKUs (now) to hundreds of thousands of SKUs without increasing shelf space. I call this the Convergence of Online, Mobile and Bricks (COMB) retailing and I see it as a major part of c-store’s wave of the future.
  • Posted on: 01/04/2017

    What does the strong 2016 Christmas foretell for retail in 2017?

    There are ALWAYS trillions of dollars sloshing around the global economy. Will the owners sit on it, or move it into commerce? Brexit + Trump began to break it loose.
  • Posted on: 01/03/2017

    Should Costco raise its membership fees?

    I don't see much discussion about Costco's global success. Some rankings have shown them to be #2, next in line behind Walmart. Sometimes it is easy to forget that single moment of truth when a shopper says, subconsciously, yes, I am putting THIS in my basket. ALL of retail pivots on that single point, and of ALL the retailers in the world that I know about, ONLY Amazon and Costco manage that crucial point in time well.Maybe you haven't noticed that those are also the only two in the world, of massive size, who are also growing at steady, admirable rates, while notably, Walmart is stumbling about, spending billions trying to figure out, WHAT IS GOING WRONG!Chapter 3 of my new book does a head to head comparison of the final selling PROCESS that brings a shopper to YES! It is just as Neal Martin said, "Habit: The 95% of Behavior Marketers Ignore."Just like when Harry told his friend, George, about the twin problems we have, "ignorance and apathy." George said, "No, I didn't know that, and I really don't care!"It's amazing how these two companies, Costco and Amazon, manage the mind of the shopper in such a similar way, and BOTH have moved to largely membership FEES to stabilize and drive profits. In the relentless process of driving as close to ZERO margin on sales as possible, a dominant meme of price focused retail, return on capital dominates board-room policy, not sales. That focus drove the first retailer in the world to hit a billion dollars in sales nearly 100 years ago. And is driving the two "retailers" to watch in the race for the #1 slot in global retailing.Walmart has such massive "parked capital," (see chapter 2 of "Inside the Mind of the Shopper") that it is hard to see how they will possibly adjust to the Amazon/Costco juggernaut they are facing in the years ahead. One can note that it took more than 50 years for the first "billion dollar" retailer (A&P) to go bankrupt. So deployed capital (bricks stores) can be a massive stabilizing asset, as well as a strangling force when processes need to change. I don't rejoice over the slow death of Sears, due to similar forces, either.
  • Posted on: 12/21/2016

    How are manufacturers failing retailers?

    I think this is an incredibly obtuse line of thinking, as is the question. Because it fails to come to grips with the messy structure of retail. When I sold my company, I told the buyer to never forget that the retailers have ALL the power, but that the brands have ALL the money. (So I always state fundamental truths starkly, to keep myself thinking right -- I know a thousand caveats!) This is because as a supplier to both, I never tried to get rich off retailers and always used my small access to retailers to leverage money from my RICH supplier clients.The strength of the retailer relies on the fact that they have the hammer and can control what goes on inside their four walls. Ahem, again, caveats, caveats. But for very large retailers, the power IS formidable and the gross inefficiency of their stores, relative to the shoppers, is THEIR fault. But it's a very natural and fundamental fault. BECAUSE, they do not "SELL" to shoppers -- the brands really do try to. The retailer is a merchant warehouseman that makes most of their real money from managing the BRAND ON BRAND MAYHEM that goes on in their aisles.That is, the retailer provides a place for a horrendous crowd of suppliers to put their stuff up for sale. From the retailers' point of view, the aisle is less about CATEGORY MANAGEMENT, than supplier management. And every supplier must fight for every inch of shelf space they can possibly control, because anything they do not control -- A COMPETITOR WILL!I have written about this in both editions of my book (Inside the Mind of the Shopper) but mostly in the second edition. There you can read about how Costco manages the shopper, to the great grief of all the suppliers who don't get to play (See chapter 5). The Costco business plan has incredible similarities to Amazon, but of course some stark differences, too. (I'm publishing a VIEWS that touches that subject early in 2017.) One of the most stark differences is that Costco has 12 feet of toothpaste spread across three SKUs. (One of them their own-brand, and Crest isn't even on the shelf.) At the same time Safeway had 20 feet of toothpaste spread across 94 SKUs. Of course, the Costco stores' gross sales are an ORDER OF MAGNITUDE GREATER than Safeway's sales. And this is because the supplier crowd PAYS Safeway for their substandard performance!And the retailer forces suppliers to do it. Well, a lot more could be said, but living in an imaginary world can be very costly for business people.
  • Posted on: 12/16/2016

    Brands want more insights from retail POS data

    Two comments here:First, recognizing 20 years ago that POS data was devoid of any information whatsoever about what was happening in the store, but only what happened at the checkout, led to the invention of PathTracker(TM) with a whole new suite of metrics. The problem with that was we were just adding an enhancement to POS data, that this whole discussion is about. However, I have been spending more than a decade trying to figure out how to globalize (potentially every store in the world) our growing data engine. Cost and simplicity are HUGE challenges that we are making GREAT progress on.Second, I cite a Charles Schwab, (long ago steel magnate,) method for management of numbers in chapter 5 of my second edition of "Inside the Mind of the Shopper." Basically, the problem is producing numbers which are OBVIOUS as to what actions need to be taken. It should NOT require someone with advanced data analytics training and experience to make use of reports. The rule is, "the fewer numbers, the better." And every number's utility to the enterprise should be obvious. We are making serious progress on this basic requisite for survival in the oceans of big data!

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