Over the last 15 years, the retail industry has undergone a major transformation thanks to the growing use of digital shopping channels by an increasing number of consumers. According to the Department of Commerce, total e-commerce retail sales were estimated at nearly $602 billion in the United States in 2019 (about 11% of all 2019 retail sales), which was a nearly 15% increase from 2018.
With projections from eMarketer that e-commerce retail sales in the US could reach nearly $970 billion by 2023, it’s easy to understand the reasons behind the proliferation of digitally native organizations looking to ride the e-commerce wave to success. So, while brick-and-mortar is still the primary driver of retail sales, it’s become increasingly clear that the momentum of e-commerce can’t be stopped.
But in today’s retail environment, even masters of digital marketing should recognize the need for an omnichannel approach to their marketing and customer engagement. However, there’s likely some apprehension and confusion regarding the logistics of expanding their marketing and engagement into more traditional direct mail channels and the benefits this channel integration can provide them.
To help digitally native brands understand these benefits, QuickPivot spoke with Todd Miller, senior vice president of Strategic Services at CohereOne. CohereOne helps direct-to-consumer oriented retail brands navigate the direct mail channel, managing campaigns on behalf of its clients and integrating those efforts with what’s happening online.
Here’s what Todd had to say about the benefits of digitally native brands incorporating direct mail channels into their operations, as well as what it takes for digitally native brands to succeed in their channel integration efforts.
So, let’s dig in. For the retail brands that are best classified as “digital-natives,” what’s compelling about the direct mail channel? How do you convince those brands that direct mail is worth the investment?
In the end, it comes down to incremental ROI (return on investment). So, for those brands that haven’t tested the direct mail channel, CohereOne tries to meet a prospective client where they’re at, in terms of their progress down the direct mail path. Many are budget-constrained, and accustomed to the instant gratification that gets delivered in the digital advertising and programmatic realm.
Not every digital-native brand is going to suddenly jump into mailing millions of full-sized catalogs and opening dozens of physical retail stores. Most, in fact, launch their direct mail efforts inconspicuously via postal retargeting, utilizing a postcard as the vehicle. In that respect, it’s pretty easy to measure the incremental effectiveness of direct mail, and the results of the campaign arrive quickly.
What are some other tricks of the trade when it comes to integrating direct mail and digital marketing efforts? And, what are the tools your clients use to enable the integration?
As far as tools are concerned, for small- to medium-sized omnichannel retail brands that are considering a customer data platform (CDP) investment, we always recommend that QuickPivot receive their strong consideration. The QuickPivot CDP is well-designed and is especially useful for those that may not have highly experienced database marketing professionals on staff.
Both QuickPivot and CohereOne have a customer base that might call themselves ‘catalogers.’ These companies spend a lot of time, money, and energy developing their direct mail promotions, and making sure these pieces get into the hands of their most-responsive audiences. These days, what determines who will be most-responsive involves more than traditional RFM (recency-frequency-monetary) modeling.
Can you share a few advanced modeling strategies that you’ve seen?
For example, lapsed buyer reactivation modeling now involves observations of one’s online browse behavior, notably on a brand’s e-commerce site. Past purchase data is still predictive; assessments of recent engagement or shopping intent are, too. Among equally ranked lapsed customers, the one who’s actually still engaged and still shopping is more likely to convert. That means a brand ought to be more willing to contact that customer with compelling ad impressions – like a catalog or direct mail, generally speaking.
Shifting gears, how can retailers use direct mail to help them convert anonymous web traffic to known customers?
Well, it’s now possible to deliver a direct mail ad impression within 24-48 hours of a completely anonymous site visit, a tactic known as postal retargeting. Many organizations retarget via display, so it only makes sense to test retargeting in other addressable ad channels. Now, not everyone who visits your site is worthy of receiving a direct mail piece. Their behavior on your site, in combination with their known purchase propensity (obtained via partnership with second-party cooperative databases), should provide sufficient marketing intelligence to justify the spend.
Delivering more relevant and timely promotions is now contingent on merging past purchase behavior with other non-transactional first-party data. This is especially true for retailers that sell products in multiple categories. CohereOne has a number of clients that effectively deliver product- or category-specific direct mail promotions as follow-up ad impressions. When one combines this direct mail effort with digital ad channels like email and social, conversion rates increase.
Thanks, Todd! Do you have any other tips or tricks you'd like to pass along?
I’ll end with a real no-brainer: segment your potential direct mail audience by ‘email = valid and opt-in’ vs. ‘email = opt-out or invalid’. It’s a really simple and highly predictive tactic derived via the integration of your digital (i.e., email) and offline advertising efforts.
Looking to better integrate your digital and direct mail channels?
QuickPivot offers an integrated CDP that enables marketers to deliver coordinated customer experiences across all addressable ad channels, measure results in real-time, and refine marketing programs to improve performance. To learn more or to request a demo, visit quickpivot.com.
CohereOne is one of QuickPivot’s agency partners, focused on managing its clients’ use of the direct mail channel in concert with the digital domain. To learn more, and to request a Free Marketing Assessment, contact Todd Miller (firstname.lastname@example.org).