Use Database Marketing to Drive Store Sales

Dec 18, 2006 7:41 PM  By

Database marketing is the most cost-effective way to conduct targeted marketing and drive store sales, especially for niche businesses. Mass marketing through free-standing inserts (FSIs), and space advertising is the strategy of the past for effectively driving store sales.

While it is too late for holiday, it is never too late to be smarter about using your database marketing efforts to drive sales to all your channels, including retail. The following strategies will help you leverage multichannel activity, customer loyalty, and higher profits.

Before you do anything else, though, you must define the store trade area. Traditionally the store trade area was determined by calculating a mileage radius around a store zip code that represented 80% of the store sales. Unfortunately this will typically include neighborhoods that do not include the appropriate demographic or psychographic profile. The appropriate way to calculate store trade area is to measure the penetration within each zip code around store. By sorting and ranking zip code penetration, you can determine the appropriate zip codes to represent the trade area. You can then use this trade area file for store mailings and other marketing strategies, such as:

Penetration catalog mailings. You can create a cooperative database model for your store trade areas. This model will provide an additional universe of names to create a greater penetration of catalog mailings into the trade area. Not only will this boost your comparable-store sales, but you’ll also gain incremental catalog sales within these areas.

Noncatalog direct mail. In addition to catalog mailings, direct mail in the form of postcards can draw special attention to a store event or a special promotion.

Inkjet messages. Use the inkjet messaging area of the catalog to promote the store nearest the customer. In fact, thanks to improved printing technology, you can now inkjet an entire map of the area with your store highlighted.

Catalog cover wraps. Adding cover wraps can be highly effective in promoting a store grand opening, a remodel, or a special event. The cover wrap is only a nominal incremental cost to the cost of the catalog mailing as a whole.

Accept direct returns in the store. By accepting catalog and Internet returns in the local store, you are essentially promoting that store. The added convenience will break down any resistance the shopper may have about ordering direct, and if the customer does indeed end up coming to the store to return an item you now have the opportunity to cross-sell other merchandise or to sell that customer an impulse store purchase.

Order online, pick up in store. Offering this service gives you a competitive advantage. In addition, customers who use this service tend to have a 40% higher average order value.

Mailings to gift card buyers and recipients. You should mail a catalog and a listing of local stores to everyone who buys or uses a gift card. It not only allows the shopper to preview the product line, but it ensures that he is aware of all the options he has for shopping locally.

E-mail. Relevant e-mails are crucial to driving results. You can deliver specific local store e-mails promoting the stores and special events such as cooking classes or book signings.

Use the knowledge gained within your customer database to not only drive sales of your direct channels but also of your stores. After all, the catalog is the best branding piece most companies have. Why not use it effectively to drive increased sales and create more multichannel customers?

Michelle Farabaugh is a partner with Lenser, a multichannel marketing consultancy based in San Rafael, CA.

Other articles by Michelle Farabaugh:

Gift Recipients and Ship-tos Provide January Sales Opportunity

Understanding the Real Value of a Prospecting List

Investing the Right Amount in Prospecting

Targeted Customer Marketing

Turning Buyers into Loyal Buyers

Top Eight Multichannel Strategies to Drive Sales