Lois Brayfield, CEO

Lois Brayfield, CEO

I won’t keep you in suspense: print is alive and well.

Back in the day, when investing marketing dollars, it was easy to draw a line between mailing catalogs (the only direct marketing investment at the time), the value of acquiring a customer and the bank statements that arrived months later.

This news from Victoria’s Secret is an alert to all catalogers: Do your homework.

1.If you are mailing catalogs the same way you did years ago, even as little as 3 years ago, immediately expand your understanding. A catalog can be a powerful advertising tool, but information technology, along with evolving consumer behavior, has changed the world. Your mail strategy must change with it.

2. If you are still evaluating the value of catalogs the same way you have for years, immediately expand your attribution rules to understand the value of your catalog program within the context of all your marketing investments.

3. If you are still thinking of the catalog as a transactional tool, then you do not understand its role as a driver – to online channels and to brick and mortar retail stores.

Which is why I’m sharing this forward I was invited to write for this year’s DMA Statistical Fact Book – because it addresses the state of the industry, key statistics, and the biggest question of the day for all multichannel marketers. In this ever-changing marketing world, are we facing the end of the print catalog? To which I reply…

“Print is not dead!”

This sentiment was heard repeatedly in different iterations throughout the halls at the recent DMA &THEN conference. In fact, one session on this topic was in such high demand, the room was at capacity. Marketers want to know how print fits into today’s multichannel marketing.

Direct mail continues to serve as a key driver in most omnichannel marketing plans. It’s complemented well by online efforts, and fills a much-needed niche. Where online is generally low-cost, low impact, print is higher cost, higher impact. Where online marketing is passive, direct mail is active. Direct mailings are proactive and tactile – demanding that the recipient DO something with it. The better response rates make the return on the investment worthwhile for both retention and acquisition.

However, the 2015 statistics are in and they’re telling us what we direct marketers predicted: 2015 direct mail volume was down while spend was up, most likely driven by postage increases. On the bright side, the USPS has taken notice and is offering at least 3 discounts in 2016, for 1) interactive mail 2) online video content or 3) driving to a mobile-responsive website.

But there’s no denying that print, and thus direct mail are undergoing an evolution. And that leaves the questions: What has it become? And what is the next step in its evolution?

Direct Mail

As it’s been for the last several years, efficiency remains king for all print marketing. Yes, the economy is in recovery, but direct marketers haven’t forgotten the lessons the recession taught us about efficiency. Additionally, extremely fine, targeted segmentation is now a given, as evidenced by the 4.3% increased data spend in 2015¹. Direct mail is one of the most measurable of all media, boosting the quality of analytics for any campaign. An omnichannel marketer knows when mail is arriving and can use this knowledge to activate other touch points like email and telemarketing. It’s direct mail that anchors the campaign and drives the support tactics that can boost the overall effectiveness of an omnichannel effort.

The addition of web browsing data to the modeling process is furthering the connection between online behavior and offline marketing tactics. Scoring consumer behavior on websites is becoming an additional performance indicator for building responder files in the database arena.

Variable printing is another tool that’s being leveraged to capitalize on that data, and the lag time between the site visit and mail drop has decreased dramatically. In other words, a shopper browsing handbags on the web could receive a second touch in the mail within 24-48 hours. That’s a powerful way to motivate customers to take action.

Catalogs

Over the last two years, catalogs have undergone a dramatic evolution. The trend today is towards clean aesthetics and unique and compelling brand stories that feature calls to action that powerfully speak to the brand and customer experience.

This trend creates an enormous tension between traditional catalog best practices and the newer, less dense, more brand-enhancing look. Traditionally, catalog marketers have been ruled by square inch analysis, demanding that every inch in a catalog pays for its space. The new catalog model still focuses on selling, but in a way that today’s consumer is more responsive to.

Although catalog mail quantities are down, more brands are getting into the game, most noticeably traditional retailers. In fact, many brick-and mortar retailers are finding that the catalog is their number one driver to their websites and stores. In step with the direct mail industry, catalog marketers are getting smarter about who NOT to mail, fine tuning co-op modeling, testing and making careful adjustments to frequency.

In 2015, savvy omnichannel marketers capitalized on the synergy of print and digital together. Catalog volume rose an impressive 29% in the third quarter, driven mostly by an early catalog mailing, followed by a digital follow-up. For the last several years, we’ve heard a familiar refrain from a few of our clients, “We cut circulation, and revenue dropped.” This year’s numbers suggest that those statements are supported with real data.

In fact, for the second year in a row, the vast majority of catalogers reported that circulation and page counts have either held steady or increased. Conversely, the number of catalogers reporting cuts to page count has dropped steadily each year from 22% in 2013 to 14.30% in 2015. Moreover, the number of catalogers reporting cuts to circulation dropped dramatically from 30% in 2013 to 10.70% in 2015.

Among our clients, we’re seeing that house file mailings continue to produce strong results for retailers but prospecting remains a roadblock for many and a challenge for all. This has caused catalog circulation planners to shift focus to increasing the value of the buyer file while testing new prospect universes. Social media continues to drive brand awareness but is less effective in converting to orders.

For brands with enough long-term value to make the investment worthwhile, cooperative databases continue to work as both a reactivation tool for older house file records and customer acquisition.

On the legislative front, internet taxation continues to loom as a threat for all catalogers. Just imagine how painful the expense to collect taxes for 14,000 different taxing jurisdictions will be if it should ever come to pass. The State of Alabama is the most recent state to challenge the Quill nexus standard and the ACMA is among those groups pushing back on this recent drive for additional taxation.

So, print advocates take heart! Print remains an integral piece of an omnichannel marketing strategy, working in harmony with other channels to create a compelling customer experience. Between the surge of beautiful catalog design, real-time intelligence improvements, and on-demand printing, print is far from dead. To the contrary, print is faster, smarter and better looking than ever.

If you are not sure how to understand the value of your catalog program, we can help! Call 913-236-2402 or email me at loisb@jschmid.com to schedule a no-strings attached, free 1-hour consultation.

 

The DMA, founded in 1917, is the world’s largest trade organization dedicated to advancing and protecting responsible data-driven marketing and the use of data for good.

Each year, they publish a Statistical Fact Book that’s an invaluable guide to understanding trends, spending and happenings in the direct marketing world. Learn more about it here: http://thedma.org/knowledge-center/bookstore/

Sources:

¹Winterberry Group , 2016, p. 101

2 Winterberry Group – 2016 Annual Outlook for Direct Marketing Club of New York; Jan. 14, 2016

³ Multichannel Merchant, “MCM Outlook: Catalog,” 2016