Maybe you’ve heard Megan Brennan, the 74th Postmaster General of the U.S. Postal Service, discuss the agency’s efforts to modernize and meet the challenges of the 21st century. If you haven’t — and let’s face it, postal mail flies well below today’s tech-targeted radar — you might be surprised to learn that the Postal Service partnered with Amazon.com to deliver groceries in San Francisco, built an augmented reality app to enhance what’s in your mailbox, and created an online hub that allows customers to give their carrier specific delivery instructions. In other words, neither rain, nor sleet nor technological disruption will interfere with the mail, and that’s good news because as Brennan put it, direct mail is “the most direct pipeline to the consumer.”
The question is: What can retailers do to make sure they’re capitalizing on this new, tech-spirited innovation at the Postal Service and lead the charge to marry digital technology with direct mail? As it turns out, there are plenty of opportunities. Direct mail is at the beginning of a renaissance that’s already begun to transform shopping.
Catalogs Gone Wild
A few years back, the conventional wisdom was that the internet would kill the catalog. The catalog didn’t die, however, and retailers like J.C. Penney, which had given up on a physical mail presence during The Great Recession, have actually resurrected the catalog, citing both consumer preference and an omnichannel strategy.
Of course, the catalog’s renaissance isn’t just about rehashing an old concept. Retailers have had to evolve the medium in order to speak to today’s connected consumers. Anthropologie, which calls its catalog a journal, views its catalog as an opportunity for content marketing that’s on par with, or better than, what you would see in a magazine. A growing number of retailers take a similar editorial approach to their catalogs, with Ikea going so far as to produce a tongue-in-cheek video for the company’s “bookbook.” And then there’s Restoration Hardware, which is legendary for its 17-pound, 3,300-page catalog that takes content marketing to encyclopedic proportions. But the catalog isn't only getting better, it’s getting smarter.
A number of retailers are using web analytics to customize catalogs. L.L.Bean is just one example. As the company’s chief marketing officer recently explained, L.L. Bean can create multiple versions of its catalog based on a consumer's online browsing habits. Therefore, instead of sending every customer the largest book, Bean can send a custom edition targeted to each customer’s interests. Meanwhile, online retailers like Bonobos are discovering that a physical catalog gives the brand more latitude to grab shoppers’ attention while at the same time deepening the data around customer purchasing habits.
Like the catalog, physical retail was also supposed to die, thanks largely to the threat of showrooming. As it turns out, the fear of showrooming was overblown. A recent IBM report showed that while the number of consumers who go to the store and then use their phone to check prices on the web ticked up slightly, the amount of money those shoppers spent dropped drastically. At the same time, retailers have seen the rise of a trend known as “webrooming,” which is when consumers start the shopping experience online but go to the store to complete their purchase. What’s going on here? We’ve arrived at our omnichannel future, and it looks nothing like we predicted it would, largely because of direct mail.
A few years back, when everything was supposed to be about mobile, there was this idea that direct mail would go away because retailers would use real-time data to shoot customized coupons to shoppers’ phones as they moved around the store. It was geo-targeting on steroids. Eventually retailers came to understand that the concept was probably a better fit for "The Jetsons" than a real life brick-and-mortar store. What happened instead was that direct mail turned out to be the ideal tool for geo-targeting, not to the specific store or aisle, but to the ZIP code. Instead of driving consumers crazy with offers in-store, retailers figured out that they could use direct mail to drive their customers to the store in a given area. More importantly, retailers discovered that they could use direct mail to achieve "presence."
What do I mean by presence? Look at the experience of a retailer like Nordstrom: customers who have a multichannel relationship with the brand spend four times more than those who don’t. Direct mail in the form of a catalog can drive consumers into the store, but direct mail post store visit can also retarget consumers back to the website. Direct mail is the conduit retailers use to move customers between channels, and as such it's the method by which retailers remain present in their customers’ lives between store, home and digital.
‘Smart’ Cards (and Envelopes)
Intelligent Mail Barcode reporting technology makes it possible to sync up direct mail with online channels and capture attribution between online and offline. Meanwhile, new tools like Real Mail Notification allow retailers to align email marketing with direct mail campaigns. And, of course, improvements in printing technology combined with CRM and other real-time data tools have dramatically reduced lead times to the point where it’s possible for retailers to deliver a customized direct mail offer immediately after a store visit.
While some of these applications are new, the technologies that drive them have been around for several years or more. In that sense, what's old is new again. And just as the first iteration of direct mail disrupted retail, so too will direct mail 2.0 disrupt and transform the future of retail.