Sometimes research can tell the reader things that they already half-knew, and yet it simultaneously manages to be illuminating. Two prime examples of this within direct marketing are the recent studies from Experian and Royal Mail, which confirm both our nationwide enthusiasm for home shopping and our tendency to use catalogues and online in a single transaction.
According to Experian's Canvasse Opinion poll of more than 1,500 consumers, published in mid-August, seven out of 10 Britons have shopped from home in the past 12 months. Of those, 80 per cent found the product they wanted in a catalogue and then went online to place their order. This offline-online habit of ours has been christened by Experian as "flick-to-click" shopping.
"Just because someone orders exclusively online does not mean that they do all of their browsing online," says Nigel Linnane, home shopping consultant, Experian Integrated Marketing. "Retailers need to give consumers the choice of how they browse, no matter how they purchase. The catalogue gives the consumer more choice to browse if and when they choose, and the web the convenience of placing the order."
While the popular integration of browsable, glossy catalogues and handy online ordering mechanisms does not necessarily boggle the mind, the fact that old-fashioned paper catalogues have such a major bearing on digital transactions is a striking endorsement of the importance of integrated marketing.
Research from Royal Mail, carried out by Quadrangle, only serves to hammer this point home, albeit with slightly more conservative figures. Of the 52 per cent of UK consumers who now shop from home, four-fifths of home-shoppers (83 per cent) regularly use catalogues before buying online.
"Online still struggles with creating the best environment for consumers to browse," says Bob Hale, vice-president of business development at marketing software company Alterian. "It is getting better, but people still obtain most of their interest offline, as the research reveals."
The Royal Mail/Quadrangle research also shows that those who prefer to engage with both direct mail and online advertising spend on average £105 a month on goods and services after receiving a combination of the two, compared with £86 spent by those who only claim to pay attention to online ads and £71 by those who choose to engage only with direct mail.
STRENGTH IN COMBINATION
The real point of these last figures is that those who engage only with either online or offline communications are no longer in any way typical, and the vast majority of the consumer marketplace happily makes use of both. The same report tells us so: 84 per cent of people agree that companies should be communicating by both post and email; eight in 10 believe email is best for communicating brief messages and 66 per cent prefer to receive detailed information by direct mail.
"In a congested retail environment, consumers not only have greater choice of media to engage with, they also have stronger control over the material they receive, with the ability to opt out of receiving communications," says Antony Miller, head of media development at Royal Mail. "That means that marketers need to ensure they take an integrated approach to marketing and use a variety of channels to target different customers with those that best suit their profiles."
The challenge for mail-order companies of all kinds is clearly in identifying just what those channels are in each individual case. The equivocal, platform-neutral responses to both the Experian and Royal Mail research suggests that most of us are now buying items and paying attention to communications online. To eliminate names from the offline mailing list would certainly represent a major saving, but it would take a brave home-shopping company to begin phasing out catalogues.
"I was talking to the head of a major lifestyle mail-order business the other day, and he agreed that, yes, they would like to be able to save money, and yes, they would like to be able to segment their business and be sure that people would respond in a certain way," says David Arrowsmith, customer intelligence strategy manager at analytics specialist SAS. "He said he was very happy to do all these things, try and mix things up, make appropriate changes, and then at the very end he said, 'But I have yet to be entirely convinced on this, therefore everyone will be getting a catalogue in the run-up to Christmas'."
While the birth of online shopping in the mid-1990s might have been taken in some quarters as a threat to traditional catalogue shopping - or at least as a potential opportunity to cut back on catalogue mailings - the evidence seems to be that paper is enjoying something of a golden age.
"The fact that brands are conscious of the need to interact with consumers in a more personal way to drive online sales and build loyalty has meant the use of catalogues and customer magazines has grown at a phenomenal rate," says Miller. "They have proven themselves to be an integral part of the marketing mix, not only as a highly personalised tool, but also as a powerful way of generating online sales, raising brand awareness and increasing customer loyalty."
Assuming that catalogues are not going anywhere anytime soon, marketers are still faced with the challenge of finding the appropriate combination of additional channel prompts for different sections of their customer base.
Some people will click through from an email to a website, others may rapidly delete emails as spam while routinely opening and scanning their direct mail. Given that all have a high chance of ordering through the website when they decide to buy, the issue is one of inferred response - calculating the trigger that drove them to purchase.
Using promotional codes or personalised URLs to tag a line of communication is a staple technique, as is asking direct questions at the point of purchase or immediately afterwards. Clearly, if a website visit coincides with a catalogue mailing, a potential link between them can be made, but dangers lurk in jumping to the wrong conclusion.
There are other no-nos, too. For example, according to Experian's Canvasse Opinion research, follow-up telephone calls from home-shopping companies seeking to encourage repeat business are a major turn-off for 73 per cent of consumers.
Instead, 59 per cent of customers would far prefer to receive a monthly or quarterly email detailing a brand's latest offers, while 60 per cent would be glad to keep in touch via a monthly or quarterly communication through the post. The important thing is not to stereotype customers as offline- or online-only - unless there is irrefutable evidence or a sound business case for doing so.
"If, over a year, somebody sends me a catalogue and it never drives any business, they might be justified in taking me off the list," says Arrowsmith.
"If I am buying online and there is evidence that I am still being prompted by a catalogue, there is not a cataloguer in the country who would stop sending the catalogues out. They might experiment with sending me emails, but it might be that they find I don't respond in the same way."
While most companies will probably arrive at a combination of email and direct mail, there are good reasons why specialist mail-order firms might be keen to offer less choice when it comes to the transaction itself. "A call-centre transaction will cost maybe £4 to process," says Rob Williams, principal consultant at marketing software specialist smartFOCUS. "Online it will cost around 25p, so a lot of firms are trying to move people online."
Broadband's penetration certainly makes online ordering a guaranteed growth area. Some migrations will happen more naturally than others but, of course, it is the customers who ultimately decide the channel or channels they want to use.
"The proportion of online orders will increase over the next few years, and this will be fuelled by the 'flick-to-click' and other marketing channel activity," says Experian's Linnane. "The catalogue is simply another channel that marketers should be using alongside other channels. Even if most orders were placed online, that is not to say the consumer viewed the catalogue online."
TOP TIPS ON COORDINATING ONLINE/OFFLINE
- To track and measure how effective offline is in driving online traffic, companies should use promotional codes, PURLs (personalised URLs) or call centres, which can be specific to an offer, publication or direct mail piece. This way you can eliminate the threat of the purchase model being broken as you maintain consumer interest, specific to your website.
- If an online shopper does visit your site via a PURL or a promo code but doesn't buy, automated trigger responses can be used to help steer them back towards a purchase. So once consumers come in from the offline world to online, use their online behaviour, or request their email, in order to target them in an appropriate way and close the sale.
- Use online methods to obtain consumer preferences and build profiles - for instance, by including questions in e-newsletters. Once qualified, highly personalised offline direct mail packages can then be fine-tuned, involving specific DVDs and brochures - so the offline/online relationship can work well in both directions.
- In terms of measuring offline driving online traffic, many brands spend a lot of time and money on analysis, but they should also be asking customers valuable questions such as 'Why did/didn't you buy from us? What could we have done better? What did you like/dislike?' There is a specific window of opportunity when this is best done, either immediately - at the time of purchase/non-purchase - or when the purchasing consumer takes delivery of their item and has formed an opinion of their online shopping experience.
- Bob Hale, vice-president business development, Alterian
ECMOD SHOWTIME
Europe's largest individual forum on the catalogue and mail-order industry kicks off again for three days from 23 October. The annual ECMOD convention features 70 speakers from the US, UK and Europe as well as a fully fledged trade exhibition and the ECMOD awards.
Now in its third year at Earls Court and its 18th year in existence, it has evolved into a major event attended by an ever-increasing volume of senior decision-makers. In 2006, 650 executives registered and paid to attend one or more of the conference and training workshop days, while 2,357 people visited the exhibition.
This year's event includes keynotes from Webb Group managing director Bernard Kumeta, Scotts of Stow chief executive Nigel Swabey and N Brown Group chief executive Alan White, as well as a plethora of other speakers from both sides of the Atlantic and elsewhere. Meanwhile, the workshop and seminar sessions include the challengingly titled "Wake up Mr Retailer ... we're stealing your market while you sleep", "Does your brand have bling?" and "The internet generation: ringing the death knell for the print catalogue?".
On the exhibition floor, the majority of exhibitors and sponsors are service and solutions providers, specialising in areas including IT, logistics, fulfilment, e-commerce, delivery, creative, print, media and mailing. Some of these have been involved with ECMOD since its launch in 1990.
Other attendees will represent such big direct names as Amazon, Boden, Direct Wines, Charles Tyrwhitt, Lakeland, Kaleidoscope, The White Company, JD Williams and QVC, as well as niche businesses such as Snow + Rock and Anything Left Handed.
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