HomeFEATURESThe enduring power of the letterbox

The enduring power of the letterbox

Despite its vintage vibe, it turns out the humble mailer is Kiwi retailers’ best-kept secret. In a world where digital is king and content is the new black, the mailer’s print format and laser-like focus on product and price may seem unsophisticated, but it’s still working. Reports of its death have been greatly exaggerated.

The Warehouse general manager of marketing Lorraine Breheny says the Red Sheds find their mailers continue to be a really effective way to communicate range and prices to customers.

“We’ve conducted research to understand how our customers would like to hear about our products and results have shown the Kiwis still love hearing about bargains in the forms of mailers,” she says.

The Warehouse is always looking at ways it can optimise the look and feel of its mailer and distribution and is trialling a change to distribution with a small proportion of mailers going to letterboxes fortnightly, instead of weekly, says Breheny.

Indeed, letterboxes have become less cluttered in the last few years, but that’s more of a reflection of advances in targeting. Retailers are moving away from sending out mass volumes of unaddressed mail (at huge cost), to more targeted, personalised addressed mailers.

A staggering proportion of New Zealand retailers still use mailers. More than 80 percent, according to the Australasian Catalogue Association (ACA).

Letterbox marketing remains effective, says the ACA’s chief executive Kellie Northwood, because it engages a large demographic. People aged 40-49 read mailers the most, and that’s one of the wealthiest demographics. But Reachmedia’s chief executive Greg Radford has a surprising fact for the digital evangelists: “Everybody talks about these mythical Millennials and what does that mean for our industry, yet the second largest group reading catalogues are the 18-29 year olds.”

These statistics come from the ACA’s first New Zealand industry report of 2016, which shows that 20 percent of Millennials read catalogues each week.

Sophisticated targeting

Of course addressed and unaddressed catalogues haven’t remained stationary. They have evolved, driven by advances in digital targeting of households.

Reachmedia distributes catalogues for a range of retailers. Radford says the number of households being targeted for delivery is reducing but campaigns are more frequent. A retailer that might have been doing a print run of 700,000 a month, is down to runs of 500,000 but distributing 20 times a year.

Deidre Ross of print and distributor company Mailshop, concurs.

“Retailers can flag their customer database so it’s relevant to an individual, and can see what they have purchased,” she says.

Retailers can combine the information from their own customer databases with external data from agencies such as Roy Morgan.

Roy Mogan provides data that builds a picture of potential and existing customer’s through information on location, demographics, lifestyle, attitudes, behaviours and values.

Kellie Northwood says the more targeted the distribution, the higher the return on investment.

“This has led to ‘streamed’ catalogue production … The artwork is consistent throughout, however, the front section may be men’s apparel in a male-dominated demographic.” Or vice-versa.

“Retailers are becoming very savvy about how to create content that is relevant to their consumers,” she says.

Fancy technology like augmented reality means consumers can scan their catalogues with their smartphones and learn more about – say – the regional origin of the bottle of wine they are interested in buying.

This more sophisticated targeting of customers, of course, means that mailers are more likely to pass what Dominic Sutton, director of Pumpt Advertising, likes to call the audition process. This is the relevancy test customers give their mail after they’ve removed it from the letterbox.

“The length of time of that audition relies on a number of things; there might be a bill or a letter in there; it may literally be a flick with the fingers all happening in the two minutes you walk up the driveway.”

Some mailers will make it into the house due to relevance (which comes down to good targeting), timing, a certain level of creativity on how the customer sees words and images on the front and back pages, and the core promotional value, Sutton says.

Reachmedia’s Radford says once a mailer gets into the home, 47 percent of people will keep it for longer than a day.

Reachmedia has researched which advertising mediums worked for planned and unplanned purchases. Digital channels are great for planned, Radford says.

“If you know you want to buy a used TV, you can jump online and research it.”

By contrast, catalogues are great for sparking unplanned buying.

“I’m sitting there on the couch. My Harvey Norman catalogue has arrived, I’m due for a bit of an upgrade, and the catalogue prompts you to go online and search for one,” he says.

And of course, direct and digital marketing aren’t operating in silos like they used to be.

When PMP’s head of sales and marketing Kim Schofield started her role a year and a half ago, marketers were talking about digital strategy and the merits of that in isolation from other marketing channels such as letterbox marketing.

“There has been a transition to incorporate the printing component to the marketing strategy with the same end goals. We find that printed collateral doesn’t need to stand alone as it is really effective when it ties into the digital strategy reinforcing the same message to the consumer. Recent research shows that 48 percent of people often visit a website when prompted by unaddressed mail. The other benefit is that it can be used in store as well.”

Unaddressed versus addressed

NZ Post’s mailhouse service works with clients and their agencies to process data, print, package and lodge personalised addressed mail into consumers’ letterboxes.

NZ Post’s head of direct marketing for mailhouse services, Cess Underwood, says unlike unaddressed mail, such as mailers, direct mail is relevant to the end consumer.

“The sender has identified a relevant conversation and is talking to the customer about it, rather than just dumping something on the consumer in the hope they may be interested.”

While the money spent may be a little more than an unaddressed mailer, it is targeted, timely and relevant. It might be rewarding a valued customer with a tactile voucher or stimulating purchase from a previous purchaser, but it will be relevant, she says.

With the explosion of the digital age, companies have reduced personalised mail through the letterbox.

“However, as most people have seen over the last 18 months, the cut-through via email has reduced and lists are overused. The inbox is incredibly cluttered,” she says.

NZ Post has seen a rise in personalised address campaigns.

Technology and data smarts mean that every letter can be different and targeted specifically for every customer, and NZ Post can personalise copy and creative in one mailing.

“As long as your data and your creative support it, we can have a very personal conversation with your customers. We can also get things in to market more quickly and be far more flexible with the way we order stock,” Underwood says.

How to stand out from the rest

Tangible Media chief executive John Baker says despite people predicting the death of such a crude medium as the mailer or catalogue, they are effective.

He says there is a developing trend for brands to own their own media channels, and using other media as the distribution channel is losing its allure.

“You need to be having a direct conversation with people. The unaddressed mailer is a crude version of that,” Baker says.

“But if you want people to have a direct relationship with your products, you need to create a narrative and consequence around your products.”

That’s where customer-centric marketing comes in, driven by engaging content. “How can we add utility to the lives of our consumers, and that’s what this sort of advertising is about – helping stimulate the want to buy.”

Tangible Media produces its own media, with titles such as Dish, Good, Idealog, NZ Weddings, NZ Marketing and NZ Retail. But it also creates media for brands, such as Resene’s Habitat magazine, Liquorland’s Toast and Loyalty NZ’s Reward, which was recently sent out to around 1.2 million households.

“Resene’s Habitat is essentially a device to motivate and inspire people to continually improve their home, and to create demand for Resene’s products.”

If you are thinking about creating more of a magazine type product, Baker says you want to make sure that the content matches the interests and lifestages of the people receiving it.

“We tend to think about it in terms of the things people are passionate about, rather than the traditional approach to demographic targeting. For example, we don’t think of a category of ‘women aged 25-49’, we think in terms of homeowners, passionate food enthusiasts, mums who look after their families.”

“If you are going to do it, do it well. Think about things more deeply and from a customer’s perspective,” he says.

The ACA’s Northwood says commitment to brand application and content is the key to a successful catalogue campaign.

“A fashion retailer last year produced a catalogue which interviewed the talent wearing the clothes for the photoshoot. It was content rich and interesting, which made the catalogue stand out and gain its appeal,” she says.

“Another retailer pushed specials and coupons for a store opening in a local area distribution, and the catalogue pushed the concept of ‘locals only’, which offered exclusivity to the local community.”

Retailers pushing television commercials, or digital to catalogue with Catalogue Out Now is also strong.

Retailers developing in-store virtual experiences are handing a catalogue to the consumer as a keepsake to remember what they saw in-store, and some in London are printing ‘catalogues’ that include photos of the consumer from the clothes they tried on.

The future

Is letterbox marketing sustainable? Or will digital marketing ultimately kill it?

Mailshop’s Ross sits on the Fuji Xerox global advisory board and says in the UK, the letterbox is starting to fill up again.

“You know, there was a big push by the banks and utilities to go online, but then they had no reason to speak to their customers. What letterbox correspondence do you get from the banks anymore? In Europe, they want a reason to talk to their customer again,” she says.

The ACA’s Northwood says letterbox marketing will continue to perform strongly as it has attributes that work well with other media channels. Accessibility, affordability, reach and readership are king.

“We will see new trends with customisation and targeting. Consumers are more savvy than ever before and that means as marketers we must develop strong, creative, brand relevancy and content rich campaigns.

“Regardless of whether we are building digital, radio or catalogue … we must deliver something meaningful, otherwise we’ll be lost in the chaos of mass media.”

This story originally appeared in NZ Retail magazine issue 746 October / November 2016

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