Kevin Hilstrom is president of MineThatData, a consultancy that helps CEOs understand the complex relationship between advertising, customers, products, brands and channels. His clients include billion dollar retailers, international direct marketers, publishers, catalog brands and online pure-plays.
Prior to founding MineThatData, Kevin spent nearly 20 years in multichannel retailing at some of the most well-known brands in the U.S., including Nordstrom, where he was the vice president of database marketing, Eddie Bauer and Lands’ End. Kevin is also author of numerous books, including his most recent, “Online Marketing Simulations,” available at Amazon.com.
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We’ve heard an awful lot about multiple channel marketing — and for good reason: Marketing in 2009 is fundamentally different than it was in 1989. Maybe its most unique aspect is marketing to retail customers.
There are many differences in direct marketing to retail customers. Let’s explore some of them.
* Merchandising. Catalog-based marketers use a formula of optimal page counts, best practices for featuring merchandise on the cover and back page, established strategies for creating interest in the first 20 pages of the catalog, and so on. In retail direct marketing, the rules change.
Test your way into an appropriate merchandise assortment. Many retailers realize that brisk-selling items don't have to be advertised. Others create interest that inspire customers to get in their cars and drive to the store.
* Order curves. When you send direct mail to a retail customer, take note that the order curve is fundamentally different than when direct mail is sent to a catalog or online customer.
Catalogs may have a life of 12 weeks. Retail direct mail seldom has a life that extends beyond three weeks, with the majority of sales occurring in the first 10 days. You’ll notice this when running mail/holdout tests or when analyzing results via matchback.
* Customer differences. Distance from a store is very important in retail direct marketing. Customers who live more than 50 miles from a store aren't retail direct mail responsive, although these customers can be very responsive from a catalog/online perspective. Customers who live 10 miles to 25 miles to their nearest stores are typically the most “multichannel” of all customers. Customers who live 10 miles or less from stores become very retail responsive.
* Page counts. The goal of retail direct marketing is to encourage customers to visit the store, not to present them with the full merchandise assortment. As a result, small page counts, slim jims and postcards often are just as effective for retail customers as are fully merchandised catalogs.
Your database has all of the answers to retail direct marketing. By leveraging mail and holdout groups, you easily can identify the most cost-effective strategies for driving traffic into stores.
Kevin Hillstrom is president of MineThatData, a database marketing consultancy. He can be reached at kevinh@minethatdata.com.
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