Steering them to the stores

As much as marketers today are urged to be “channel agnostic,” one has to respect certain differences among promotional media. Take the differences between a mail order catalog and a catalog traffic driver. The goal of the former is to generate an immediate sale; the latter is designed not so much to sell specific product but to sell the reader on visiting a store. Because the goals differ, so do the creative, the merchandising, and even the distribution methods.

READ IT IN THE SUNDAY PAPERS

For catalogers with a local retail presence, inserting tabs, or traffic driver brochures, into newspapers is a tried-and-true means of reminding your audience that you have a store nearby and enticing them to stop by. Also known as free-standing inserts (FSIs), these pieces are ideal for short-term promotions, says Scott Binger, director of marketing for Fort Worth, TX-based home decor merchant The Bombay Co., such as getting consumers into stores for “key gift giving times” such as Mother’s Day. Bombay Co., which produces two- , four- , and eight-page FSIs, inserts approximately 8 million pieces a drop, with multiple drops a year. But it doesn’t take a blanket distribution approach. Rather than placing the inserts in newspapers going to all subscribers who live within a specified distance of one of the company’s 500 stores, Bombay opts for selective insertion, in which the FSIs are placed only in copies of the newspapers going to households that match its target market.

“We’re very efficient with our FSI dollars,” says director of marketing Shannon Cook. “We do zip+4 [modeling] that meets demographic and psychographic data.” Since newspapers charge per 1,000 pieces inserted, drilling down by geography, demography, and psychographics can end up saving you money. “It costs you more not to be as targeted,” Cook says.

As far as Mike Wychocki, executive vice president/partner of Sausalito, CA-based catalog marketing firm Haggin Marketing, is concerned, “I think your distribution plan is much more critical than the design of the piece. Neighborhoods within zip selects, if the neighborhood has a certain demographic profile and is within five miles of the store, is better than shotgunning all over the place.”

Targeting is all the more important given that traffic drivers generally have a lower response rate than mail order catalogs. Wychocki says that while 1%-2% is a typical response rate for catalogs, traffic drivers can usually expect only about 1/10 of 1% response.

Granted, most companies don’t even bother to scientifically track results from drivers, Wychocki says. Instead they assume that if there is a lift in store sales in the 30-60 days following the mailing of a driver or the insertion of an FSI, the investment was worth it.

You can measure the effectiveness of traffic drivers, however, by withholding distribution to, say, 100,000 names, or certain zip codes. In the month or two following the mailing or the insertion, you could then track how purchasing from those who received a driver differed from that of those who didn’t receive one. Offering a promotional coupon with a barcode in the driver could simplify the match-back process — as well as further induce consumers to make a purchase.

CREATIVE — AND MERCHANDISING — DIFFERENCES

Along with making sure that the traffic driver is distributed to as targeted an audience as possible, you need to target the merchandise offering itself. Not all products are well suited for a traffic driver, says Wychocki. Merchandise that is “more commoditized,” rather than niche products, will do much better. That’s no doubt why Amazon.com predominantly features housewares, home electronics, and do-it-yourself products, rather than books, in its traffic drivers.

And if you sell high-end goods, traffic drivers probably aren’t the marketing medium for you, says Haggin senior vice president/partner Mark Swedlund: “A company like Coach that sells in the luxury market or those that have an elevated brand statement, cannot effectively use newspaper insertion.”

Because traffic drivers typically have fewer pages than mail order catalogs, they’re often merchandised around a limited theme, such as bedroom furniture or beachwear. Traffic drivers are “a piece of a marketing strategy built up to support the brand, but they’re not telling the whole story of the brand,” says Cook.

Mail order catalogs “are more inspirational and idea giving,” says Binger. “They show a more complete assortment, and therefore the copy is longer, and the messages softer.”

For instance, a vacuum cleaner sold via a mail order catalog would be shown in full length with a picture in the background — such as that of a shedding pet — that tells a story, Wychocki says. The photo would include a caption and copy underneath describing how and why this vacuum picks up pet hair more effectively than other vacuums. In a traffic driver, the product would be illustrated with only a partial photo. Instead of a story, the price point would be the most elevated part of the text, with quick bullet points citing benefits like the efficient retrieval of animal hair.

“The message has to be complete enough to make a sale in a catalog,” says Swedlund. “The traffic driver doesn’t have to have that depth and clarity because people go to the store to check the product out.”

GETTING PERSONAL

Traffic drivers can be used as retention vehicles rather than as prospecting tools. Springfield, MO-based outdoor gear cataloger/retailer Bass Pro Shops mails drivers to store buyers to promote upcoming sales and in-store events, such as boat shows and seminars given by outdoor experts. The retail drivers may resemble “a composite or excerpt of what’s in the catalog,” says spokesperson Larry Whiteley.

Personalization, of course, helps improve retention rates. Technology has made it easier and more affordable to personalize mail pieces based on locale or past purchase information. In fact, Mike Wegmann, senior vice president, direct marketing of St. Louis-based direct marketing communications provider Jerome Group, predicts that during the next decade marketers will maximize the variable printing options available. Just as some companies currently ink-jet the customer’s name with a personalized salutation on the cover of catalogs, they might also ink-jet the address and picture of the nearest store along with a miniature map.

Bombay already personalizes the traffic drivers it mails to customers to reflect their past purchases, says Cook. And the company, which will implement a new database tool, E.vantage software from San Antonio, TX-based database services provider Harte-Hanks this fall, has its eye on further refining its mailings, in part by possibly increasing its use of personalization.

“We’re already experimenting with some variable printing,” says Cook. “When we get to our new database environment, we could do one-to-one communications.” For instance, Bombay will be able to alert customers that a new piece of merchandise has been added to a line that they have already purchased from. “If we’re expanding a collection,” says Cook, “and a customer owns three of the five pieces, we want to get her in the store.”

The industry is seeing more of the technology applied out there every day, Wegmann says, “but it’s not yet really a part of what you do on an everyday basis from a production standpoint.”

The reason is the cost. Printing covers with versioned photos, text, and maps would cost an extra $0.45-$0.50 a piece, Wegmann estimates, so “I’d advise to test to see if it works better than what you’re currently using.” Nonetheless, “pricing [on variable printing] probably comes down 3%-5% a year, so in 5-10 years, it might be 50% less than what it is now,” he points out.

And, in fact, because of their lower page counts, and because they’re often printed on a cheaper paper stock, a traffic driver is less costly to produce than a catalog. Wychocki estimates that a typical insert costs as little as $0.015 apiece to print and distribute compared with $0.50 apiece for a mail order catalog.

Harry and David cards its customers

For Medford, OR-based Bear Creek Corp., getting customers into its stores is in the cards. Its Harry and David division mails 9″ × 6″ postcards, with graphics on one side and text on the other, to members of its preferred customer program. Store customers of the food gifts merchant sign up for the program at the cash register, says Gail Armistead, vice president of visual merchandising. The program entitles the customers to a free box of truffles after they’ve spent $150, and 20% off any purchase after $300 has been spent. Accounts are tracked through a card that is scanned at the register.

Harry and David mails about 1 million postcards to these shoppers every year. “These are our best customers, and we know they are the ones to target and keep,” Armistead says. The postcards, sent before “event celebrations,” such as Easter and Valentine’s Day, always include an offer, such as 20% off any purchase of $30 or more.

Mailing traffic drivers only to customers who are part of a loyalty program is an efficient way of tracking results, says Mark Swedlund, senior vice president/partner of Sausalito, CA-based catalog consultancy Haggin Marketing. He notes that it’s harder to conduct match-backs for traffic drivers than it is for catalogs or purchases made via the Web. “Proprietary credit cards and frequency marketing programs are a great instrument,” he notes, “because they get the customer to provide identifying information at the cash register that can be tied back.”

Capturing the data is important to Bear Creek since it relies on highly segmented mailings. If the preferred customers on the postcard mailing list aren’t already signed up to receive catalogs, they are mailed a print book. “The catalogs are sent to preferred buyers to convert best store shoppers into catalog shoppers,” says Armistead. Similarly, those who have never purchased from a Harry and David store are sent catalogs that include inserts for promotions on purchases from one of the stores, along with a list of the stores nearest them. And Harry and David also makes a point of personalizing the postcards, “including an offer based on past buying history,” she says.

The graphics used in the postcards are shot especially for that purpose, with no reuse of catalog photos, says Armistead. Nonetheless, “the pictures are very similar because we always try to make the brand the brand.” For instance, a postcard might feature an all-chocolate tower that is not offered in the catalog but is packaged in the same fashion as the towers that are carried in the print book. “Consistency is carried out in whatever we do, so the customer understands the brand,” Armistead emphasizes.
MW

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