For those of us who grew up in the 80s and 90s, it was almost forever ago when our retail shopping experience began in the mail. In fact, it has been nearly 21 years since the cast of Dawson’s Creek appeared in the J. Crew Fall catalog, made its way to our mailboxes, and we rushed out to the nearest J. Crew to copy their look.
It feels so long ago because so much has changed, especially in retail and the way we all shop today, and the overwhelming amount of information we consume these days. As marketers who work in the direct mail industry, we’ve always been close to retail and in a few ways, have found ourselves evolving alongside them. Today the shopping experience doesn’t begin in the mailbox quite as much as it used to. It doesn’t always involve a trip to a store’s physical location either. Instead, shoppers can interact with a brand in a variety of different ways. And so, the question for us becomes…where does the direct mail industry fit into all this change? To answer this, we need to take a close look at what’s happening in the retail industry, how marketing priorities are changing, and what this means for direct mail marketing in the years ahead.
Online or Offline – It’s All One Experience
Retailers and the marketers who work for them are blending their ecommerce presence with their physical world presence into one fluid customer experience via multiple touchpoints – also known as Integrated Marketing. For those of you who work with retailers who’ve put this into practice, you know it’s intended to be all-encompassing – from digital to offline traditional channels, including direct mail marketing. In fact, according to one study, marketers that sell at least half of their goods online are more likely than their purely offline counterparts to frequently or occasionally run ad campaigns in print, direct mail and out-of-home channels. A lot of what’s driving this comes down to marketing priorities. According to one survey, 58% of respondents said online customer engagement (i.e., web/app visits) was a top marketing priority. 47% said customer retention was a priority and 45% said offline customer engagement (i.e., store visits) was a priority. Online (29 %) and offline sales (33%) were not as much of a priority. Here’s where we see a lot of line blurring. When it comes to having measurable offline media goals, such as direct mail, the highest percentages went to retailers’ online channels for customer retention, brand loyalty and awareness, and offline sales.This chart demonstrates the cross-pollination and how retailers are using offline marketing for so many purposes.
It’s important to note that not all marketers are here yet. Almost half (47%) of the marketers surveyed in the study stated a unified cross-channel customer experience was one of their top three priorities. But in the chart below, we see that those respondents are in very different places when it comes to implementation. Still, it’s great to see that most, if they are not there already, are actively working towards this priority. What’s interesting is that any outsider might assume that it’s the larger companies that are leading the way, making up the 8% of marketers running the best-in-class integrated marketing program. When in reality, marketers with smaller advertising budgets (between $10m and $25m annually) are four times as likely to claim to have a best-in-class integrated marketing program vs. advertisers that spend more than $50m per year.Some of the barriers for marketers transitioning to integrated marketing include internal issues like organizational silos that break down and inhibit collaboration. This was found to be more of a barrier than lack of data or access to people within the organization with the technology expertise to improve processes.
With so much transitioning and shuffle, including digital marketers now being tasked to focus on print and other offline media, it’s no wonder why at least 33% still have no formal integrated marketing approach, even though they said it was a priority. As direct mail marketers, being a guiding light for these retail marketers during this transition is one of the most important things we can do. Our job is to demonstrate to them how print can work within their integrated marketing strategy to do whatever they need it to do. The possibilities here are endless – not only for driving ecommerce purchases, but also enhancing any part of the customer journey at any time.
Retargeting With Direct Mail
It’s easy to think of direct mail marketing as more suited for acquisition. In a lot of ways, that’s a very well-deserved association. Acquisition is really where we have shined for many years, whether it’s grand openings, mailing to new residents, expanding a geography – you name it. But within the current retail environment, losing a potential beauty box subscription customer is very different than a large retailer mailing a new resident about Clinique’s free gift promotion. The subscription customer might need those multiple touchpoints in order to move forward.
How Do You Retarget This Customer?
Well, you could certainly go for social media ads or email – but there is no guarantee those ads are going to be seen or acted upon. Those familiar with retargeting know that the digital marketing option is not always as easy as it might seem for reaching back out to potential customers. When we look at the latest numbers from ANA/DMA, direct mail response rates are currently at 9% for a house list. Email, paid search, social media, and online display are 1% or less. We don’t say this to make a case against using digital to retarget potential customers – digital is an extremely important part of the mix. What we are saying is that, when it comes to retargeting, if emails, etc. are not getting through or not being acted upon – direct mail makes a lot of sense. Marketers in the print industry talk about how print is amazing because it’s such a tangible marketing touchpoint. In fact, there are even some great studies explaining the science behind how the tangible aspect of print is so beneficial. What we like about mail is that, one way or another, it’s going to be held and seen by a human being and a choice will be made about what to do with it – keep or compost. The same cannot always be said for email and a lot of other digital media. This is how direct mail can prove to be a great part of a retargeting strategy and why it’s good to think of direct mail as a solution that can do far more than targeting new consumers.
What’s Ahead for Direct Mail and Ecommerce
Gone are the days of wondering if direct mail can drive ecommerce. In a recent global study, 58% of respondents in the U.S. stated that they received advertising mail from e-retailers in the past 12 months, 12% higher than the global average. Of the respondents who received advertising mail from e-retailers, over half (51%) visited the e-retailer’s website as a result. A significant 44% made an online purchase as a result of this direct mail from the e-retailer, 19% shared this mail with someone, and 14% engaged with the e-retailer via social media.
It’s not about whether or not direct mail works for retail – it’s about how it works and how it flows within an integrated marketing framework and the speed in which it can get into the right hands to achieve x, y, or z. This is a challenging but exciting shake-up in the way things have always been done; as they say, change is good. And while the days of customers copying J. Crew looks from Dawson and Pacey are probably long gone, the relationship between retail and the direct mail industry will always be a tight connection full of great ideas, innovation, and evolution. We are in this together – and the opportunities are endless.Sources:
451 Research, State of Integrated Marketing 2017
ANA/DMA Response Rate Report 2018
IPC Cross-Border E-Commerce Shopper Survey 2017