As Next and Very.co.uk use direct mail to create personalised offers for their customers, is the trend undergoing a resurgence?
Next’s successful return to direct mail announced last month signals the revival of a medium that has been overlooked by many retailers in recent years. Has Next spotted an opportunity that others haven’t?
In an interview with Marketing Week, Lord Wolfson, Next’s chief executive, stated the company has turned direct mail back on after seven years. He said: “There was too much [direct mail] six years ago, but the volume today is infinitely less. The more there is the less effective it becomes [and vice versa].”
By reintroducing direct mail the retailer has seen a significant increase in sales and new customers. However, I would argue that it’s not a lack of competition that has given the medium renewed value in today’s marketplace.
According to OfCom’s latest communications report, spend on direct mail is in decline, with its share of advertising spend falling by 14.1% in 2013. But there is also a shift in attitude. The report forecasts a 0.6% rise in 2014 and again in 2015, with a rise of 1.8%. What is contributing to the changing attitude towards direct mail?
Direct mail is first and foremost a relationship-building medium and in today’s more competitive marketplace, where customers are savvier and more demanding of brands, remains an important means of communication.
It’s the opportunity to invite consumers into the retailer’s world and gain a vital pass into the consumer’s world. It helps retailers identify what motivates and inspires their customers to create lasting relationships.
In my experience, direct mail works well for fashion brands, where it’s important to guide customers through what they are seeing. And despite Next’s claims that few retailers are using the medium, it does remain a core part of the marketing mix for many retail brands.
Very.co.uk for example, ran its Love Your Wardrobe campaign when customer response rates were falling. This campaign aimed to make customers fall in love with their wardrobe again by determining their levels of fashion confidence.
The retailer sent a launch email inviting customers to take a personality quiz that gave Shop Direct an insight into shopping behaviours. The prospect pool was then segmented into three categories based on the insights; ‘style safe’, ‘chic style hunter’ and ‘fashion forward’.
The final stage was the use of personalised, direct mail packs for customers revealing their style personality.
This dynamic campaign created 12,667 new customers, exceeding the target by 22%. It also delivered four times over against return on investment highlighting how direct mail can create cut-through for retailers that has a cost benefit.
So should other retailers follow suit?
I would expect that brands undergoing a marketing push, such as Selfridges, will look to invest in the medium. With the tangibility and quality of direct mail, it will deliver particularly well for luxury brands whose margins can accommodate the high direct mail costs versus a digital approach, which is cheaper but in some cases not as cost effective in return-on-investment terms.
To captivate customers, retailers need high-quality content that is steeped in customer insight to deliver against marketing spend.
And regardless of the competition, when faced with a discerning customer, getting these elements right will be the key to the medium’s revival in the coming years.
- Elly Woolston, Chief Client Officer, Indicia