The two-year study set out to examine the actual effects that direct mail has on consumer behaviour. Commissioned by Royal Mail and conducted by Dunnhumby, the database and marketing consultancy that manages the Tesco Clubcard database, the study looked at 31 campaigns for 25 brands using information supplied by leading brand owners, including Unilever, Procter & Gamble, Masterfoods and Heinz.
The study looked at the purchasing habits of 10,000 consumers and more than nine million direct mail pieces, using Dunnhumby's Crucible database, which anonymised Clubcard profiles to protect identities.
The study also contained a control group that did not receive direct mail, enabling researchers to strip out the effect of concurrent print or TV campaigns.
In the short term, (defined as six months after the campaign or less if there's a time-limited offer), direct mail increased sales by 21 per cent. (All percentages are on a more conservative median basis rather than a mean average). Most campaigns saw an uplift of between 10 and 50 per cent. Of the 31 campaigns in the study, 29 showed a positive short-term effect due to direct marketing.
Also in the short term, brand share rose by two per cent, with the top quartile of campaigns showing brand share increases of at least 3.2 per cent. Penetration, as defined by the percentage of the mailed customers who bought the products at least once over a 12-week period, had an uplift of 4.9 per cent.
In the longer term, defined as up to one year after the mailing, the sales uplift was 12 per cent, brand share was up 0.4 per cent, and penetration uplift was 2.9 per cent.
Richard Roche, head of multi-channel retailing and media markets at Royal Mail, commented: "At last here is a robust study that proves the power of mail for FMCG companies in particular. Not only does it show massive sales impact, but it also proves that mail works in brand enhancement and changes buying behaviour."
Phil Kirk, media development manager at Royal Mail, added: "This study demonstrates that brands should consider the benefits of fully exploring their use of mail. Along with the traditional view of the medium as a response and sales driving tool, it provides advantages in customer acquisition, trial and retention, as well as brand promotion."
The findings will be used to help convert more marketers of low cost, quick turnover food, drink and household products to the idea of using direct mail. FMCG marketers have traditionally spent comparatively tiny amounts of their large marketing budgets on direct mail (see Think Tank, page 16).
The study also estimated the uplift of direct mail campaigns on purchasing habits when combined with above-the-line media spend. It found that running direct mail campaigns alongside media campaigns produced extra sales that would not have otherwise occurred.
The researchers say in-store promotions did not skew the analysis, because both the mailed groups and the control groups were equally exposed to offers within the store.
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