We’ve heard it many times: Direct mail is the foundation of any good marketing program. While digital marketing can be an important component of a multichannel marketing strategy, direct mail is the platform on which most digital campaigns are built. Now the experience of one high-end retail chain illustrates how true this is.
Erik Nordstrom, co-president of the Nordstrom department store, slashed his forecast for sales and profit after the company had a weaker than expected first quarter. But Nordstrom didn’t blame Amazon.com, the changing winds of fashion, or foreign competition. He blamed the company’s reduction in direct mail.
Nordstrom, a well-known name in high-end retail, has a well-established loyalty program. It has nearly 12 million active customers who contributed more than 60% of sales in the first quarter. However, late last year, the retailer made the decision to move to a digital-only strategy. The result? Disappointing numbers. “As part of our decision to move to a digital-first program, we eliminated paper notes but later discovered that a segment of our customer base relies on receiving these notes by mail,” Erik Nordstrom said.
That decision, Nordstrom added, resulted in a reduction in foot traffic at all of the Nordstrom stores since many of its customers rely on receiving their loyalty rewards by mail, something the retailer either didn’t know or hadn’t considered.
The takeaways?
1. Direct mail works!
Embrace digital communications, but, build those strategies on top of a foundation of direct mail.
2. Know your customers’ channel preferences.
If Nordstrom had been more tuned in to the channels that were most important to its customers, it might not have eliminated direct mail in the first place.
The lessons are clear:
Know not just your customers’ demographics, but what channels they rely on and are most likely to respond to. Know who likes mail, who likes email, who likes social, and target your messaging to different customers the way they like to receive it.
If you love your digital communications, don’t eliminate them. Use digital and print together. In fact, studies show that marketing results are consistently better when you pair them up.
Want to learn more about your customers’ channel preferences so you don’t make the same mistake Nordstrom’s did? Let us help!