Distance selling retail sector deck (Private Life of Mail)

DIRECT MARKETING
IN TODAY’S CATALOGUE AND
ONLINE RETAIL MARKETS

 The retail sector and the role of mail
 The new news about mail
 Why use mail now
 Our products and services
WHAT WE WOULD LIKE TO TALK ABOUT
2

As the economy has begun to recover, growth in
the retail sector has increased more quickly
 The retail sector has grown by over 5% in each
quarter compared to the previous year since Q1
2013. Growth in the whole economy has averaged
around 2%.
Retail spend has grown as customer confidence
improves
 The UK retailing industry is influenced by customer
confidence, as confidence increases so does spend
in retail items
 Consumer confidence is the highest it has been in
the UK since the autumn of 2007 (Nielsen’s Global Survey
of Consumer Confidence and Spending Intentions)
Leading to retailers feeling more confident to invest
in marketing to acquire and retain customers
POST-RECESSIONARY RETAILING
Source: The Retail Industry: Statistics and Policy, House of Commons, June 2014
Nielsen’s Global Survey of Consumer Confidence and Spending Intentions, Nielsen Ad Dynamix, October 2014
Source: The Retail Industry: Statistics and Policy, House of Commons,
June 2014
3

INCREASING COMPLEXITY OF THE
 According to research from Deloitte, 44% of all retail
transactions in the UK involve multiple channel
interactions
 In all categories, shoppers use multiple channels to
buy, with online dominating travel and books/DVD’s,
clothing/footwear. However food purchases are still
mainly store based.
 Shopping via devices has increased with tablet
purchases reaching 35% and buying via a
smartphone reaching as high 41% in some
categories
 Resulting in the customer journey to both purchase and
return goods becoming more complex
 Some 27% of online shoppers now use click-and-
collect, while nearly as many consumers have returned
internet purchases in-store (13%) as by post (17%)
 Catalogues have a presence in most categories
SHOPPER JOURNEY
Source: Changing trends in multichannel browsing and shopping preferences, eDigitalResearch plc, September 2012
Servicing the connected consumer, The Multichannel retail opportunity, Deloitte, 2011
4

THE GROWTH OF OMNI-CHANNEL
 Changing consumption patterns have led to increasing
omni-channel retailing
 Retailers are playing catch-up with pure play online
retailers, such as Amazon and ASOS who continue to
grow and nurture their direct customer relationships
 Next has responded well by establishing a distribution
model, thanks to its “catalogue” business (which these
days is overwhelmingly online) and click-and-collect in
store
 There will be an increasing trend for online and
catalogue retailers opening physical presences,
through pop-ups or more permanent showrooms
 Click-and-collect will move from being a differentiator to
being a hygiene factor for high street retailers. For
example, Argos is turning its 700-plus stores to a “click-
and-collect” hub. About a third of sales now come from
online orders that are collected in-store.
RETAILING
Source: GMI / Mintel, Click & Collect, September 2014
5

THE RISE OF CLICK-AND-COLLECT
 Some 35% of internet users have used click-and-collect in the
last year. This compares to 39% saying they have used
reserve-and-collect, and 86% using home delivery in the past
12 months.
 Click-and-collect orders will make up 15% of all internet retail
sales of physical products by value in 2014
 By 2015, it is estimated that around 17% of all internet retail
sales (or 2.2% of all retail sales) to be collected by customers
 The collection rate is much higher in non-grocery orders (e.g.
clothing, electrical & furnishings) than groceries
 This raises opportunities and threats to direct and online
retailers
ONLINE SALES
Click and Collect Usage
Source: GMI / Mintel, Click & Collect, September 2014
6

 Research from MarketReach and YouGov suggests
that, despite the popularity of online shopping, the
shopping catalogue remains a firm favourite with
shoppers
 After a period of declining spend, the market has
returned to growth, and is expected to deliver a 9.8%
uplift over the next five years ( Verdict UK Retail
Futures 2013)
 A quarter of all UK consumers have ordered an item
direct from a company having browsed a printed
catalogue in the past 12 months
 Most customers now go direct either via web or post to
order
 Physical catalogues are becoming more interactive
using technology so that people can buy off the page
using NFC and QR codes
CATALOGUE MARKET DYNAMICS
Source: Royal Mail MarketReach, Print Catalogues in a Digital World, September 2014
Catalogues and Mail Order Shopping Report, YouGov, January 2012
Retail Futures, Verdict UK, 2013
7

Source : TGI, Kantar Media, April to June 2014
 A quarter of all UK consumers have ordered
an item direct from a company having browsed
a printed catalogue in the past 12 months
 52% of adults who have shopped via mail
order in the last 12 months browsed in a
catalogue before ordering
 74% then go on to order online
 Retailers with physical shops are increasingly
seeing customers go in-store to collect
 Due to the physical nature of catalogues they
are still playing an important role in the
customer journey
52%
71%
7%
29%
0%
20%
40%
60%
80%
In the Catalogue On the Website Elsewhere Catalogue and
Website
All adults who bought via mail order - how did you browse?
CATALOGUES PLAY AN IMPORTANT
ROLE IN THE MAIL ORDER JOURNEY
24%
74%
15%
2% 3%
0%
20%
40%
60%
80%
Telephone/Mobile On-line/Internet Mail Order/Post Through an Agent Other
How did you order?
8

OFFLINE AND ONLINE ARE BECOMING SEAMLESS
PARTNERS IN THE CUSTOMER JOURNEY
63
45
50
37
55
50
Distance shoppers not
using catalogues
Purchasers from
catalogues
All respondents
No Yes
%
Which catalogues have you requested? (type of
goods mention allowed)
Mentions above 3%
%
Base: Those requesting a catalogue/brochure from a websiteSource: Royal Mail MarketReach, Catalogues in a Digital World, 2014
Have you ever requested a catalogue or brochure from a
website?
 Direct communications are playing an important
role in driving customers online
 Many online shoppers request a catalogue
online to browse offline
 66% of shoppers say catalogues prompt them
to go online
 65% browse through both an offline catalogue
and online shop before they make a purchase
9

CATALOGUES CAN DRIVE MORE VALUE
74% bought from
a retailer within 6
months of receiving
their catalogue
Of these, 81% were influenced by the catalogue
50% say they buy more
frequently if they regularly receive
a catalogue
40% reported buying
more than originally
intended when shopping
with a catalogue
Customers who purchase from catalogues buy more, more often:
Source: Royal Mail MarketReach, Catalogues in a Digital World, 2014
10

RETAILERS WITH A DIRECT OR DIGITAL PRESENSE
THAT HAVE INCREASED DIRECT MAIL
11

MAIL SPEND IN MAIL ORDER AND
 Many catalogue retailers are increasingly using mail
not just to drive acquisition but to also build loyalty
 Mail can help drive sales of key items or remind
customers of key promotions, enhancing AOV and
loyalty through repeat sales
 E-retailers’ mail spend has shown a big increase in
the last year with companies like The Hut and eBay
using it as part of integrated campaigns
E-RETAILING 2013-14
Source: Nielsen Ad Dynamix, October 2014
Cine
ma
Direct
Mail
Door
Drops
Intern
et
Outdo
or
Press Radio TV
YoY Diff% (43.60) 69.42 52.81 (39.71) 18.35 11.18 (29.43) (15.53)
(60.00)
(40.00)
(20.00)
0.00
20.00
40.00
60.00
80.00
YoY Diff%
12

MAIL IS A CATALYST FOR
For those who went online to find out more following a direct mail campaign:
• 59% used their PC
• 43% used their tablet
• 30% use their mobile phones
DRIVING CUSTOMERS ONLINE
59% of
PC Users
43% of tablet
users
30% of
mobile
users
Source : Royal Mail MarketReach, Mail Drives Behaviour, 2013
13

THE BEST RETAIL MAIL MAKES PEOPLE KNOW,
63%
66%
75%
83%
It told me something new
It kept me up to date
Most likely to help consumers KNOW
It told me about their new
products and services
All others <50%
It told me about their offers
and promotions
Most likely to make consumers THINK
All others <50%
Most likely to help consumers FEEL
All others <50% 53%
55%
66%
67%
83%
50%
51%
60%
69%
Better/ more informed
Pleasantly surprised
Happy
Tempted by offer
Made me think that they
value their customers
Made me think about
them more positively
Kept their products and
services top of mind
Reminded me about the
brand/ company
Made me think about
buying from them
(n=677)
(n=677)(n=677)
Q9: What was it that this mail told you that you found useful and/or interesting?
Q10:And what did this mail make you think?
Q11: And how did this mail make you feel when you received it?
The best retailer mail makes people think about, and feel tempted by, products and services...
Source: Royal Mail MarketReach, Values: Best Mail, Quadrangle, 2014
THINK AND FEEL
 Recipients like to know about offers and promotions,
and being kept up-to-date about new products
 As well as making people think about wanting to buy,
good retailer mail also serves to remind people about
the brand / company and to keep products top of mind
 Making the consumer feel tempted by the offer is a
key driver of action
14

38%
39%
46%
49%
57%
Went online for more info
Visited shop/ retail outlet
Planned a future purchase
Acted upon it:
purchase/spent/used etc.
Kept for future reference
Most likely for people to DO
All others <30%
All who “acted upon” mail
All others <10%
17%
24%
34%
39%
94%
Made my usual purchase
Made a spontaneous purchase
Used their vouchers
Used their discount offer
Made a purchase
(n=677) (n=331)
*
* Combined figure, all types of purchase
…WHICH LEADS TO PLANNED AND
ACTUAL PURCHASES
Q12a: And WHAT DID YOU DO as a result of getting this mail from <brand allocation>?
Q12b: Which of the following ACTIONS DID YOU TAKE, as a result of getting this mail from <brand allocation>?
 More than half of consumers keep their useful /
interesting retail mail (57%) and / or plan a future
purchase (46%)
 And around half have actually made a purchase as a
result of receiving this mail (46%, or 94% of those
who acted upon their most useful / interesting retail
mail)
Source: Royal Mail MarketReach, Values: Best Mail, Quadrangle, 2014
15

CATALOGUE CREATIVE
 One key trend has been reduction in
the size of the catalogue pages as
retailers post smaller catalogues
 There is more interactivity within the
catalogue especially QR codes and
NFC to order via mobile from the
page
 Increasingly brands are using
celebrity and celebrity ranges
(especially Littlewoods group)
 JD Williams are segmenting and
targeting their audiences distinctively
 Marisota is using ‘Shapeology’
to differentiate its core offering
to larger women
17

FIRST ORDER INCENTIVES
 Most retailers offer money-
off incentives to acquire
new customers
 Free delivery is becoming
the norm as direct sellers
battle the competitive threat
of click and collect
 Some companies also
reward reviews and social
media coverage
18

DRIVING RETENTION
 Many retailers use mail to build
loyalty and incentivise repeat
orders, driving sales and enhancing
AOV and loyalty through repeat
sales
 Win-back promotions offering
money off when a customer has not
ordered over a period of time is
focusing on building customer
numbers
 Boden sent customers who
had not ordered for a while a
reminder about the
relationship they had lost
19

BODEN USES A DIFFERENT
 Boden is using distinctive catalogue
design and interactive mail to get cut-
through in a cluttered marketplace where
most catalogues look the same
 Inside, on the first spread, there's a repeat
of their discount offer and a set of
stickers to engage customers with the
catalogue, making it easy and fun to mark
items of interest, to drive AOV
APPROACH TO CATALOGUE MAILINGS
Source : Royal Mail MarketReach, Boden, 2011
20

E-RETAILERS WHO USE MAIL
 Increasingly online retailers are using
mail to create stand out as people
become less responsive to emails
 They are looking to direct channels
to drive interest and encourage
people to go online
 They have found that mail works in
the world of online as part of
integrated campaigns
.
Amazon has produced
an offline gift catalogue to
drive people back online
21

CASE STUDIES
DIRECT MARKETING THAT
DRIVES VALUE
22

BODEN USED MULTI LEVEL
PERSONALISATION TO DRIVE REPEAT SALES
Background:
Boden wanted to remind people about how good it felt to shop
with them and remind lapsed customers to come back.
Solution:
They sent a very personalised targeted mail piece to lure
customers back and elicit repeat business.
 The back of the mailing featured personal product
recommendations based on analytics.
 An online landing page was also created so that customers
could voice what they thought of the brand.
Results:
Drove a near 30% uplift in response.
Source : Royal Mail MarketReach, Boden, 2011
23

ASOS USED MAGAZINES AND MAILINGS
TO CREATE MORE VALUE
Background:
ASOS created a magazine to be distributed with orders and
bagged with other fashion magazines. The first three issues
generated over £1.5m of revenue.
Solution:
ASOS added direct mail as a channel and launched the
magazine as a standalone. They also created a smaller 36
page supplement to drive new customer acquisition.
Results:
The magazine was distributed to an average of 451,369
customers and drove loyalty, with active customers’ response
rate up 8.5% and 2.3% on lapsed customers. Active customer
ABV was also up 8.3% on lapsed customers.
Source : APA, Most Effective Retail Consumer Magazine of the Year, ASOS, 2007 and 2008
24

IKEA USED DIGITAL PRINT TO INSPIRE
Background:
The vast majority of UK homeowners have some form of
outdoor space. But sadly, many are neglected. IKEA wanted
to raise awareness among IKEA FAMILY members that they
offered an extensive outdoor range.
Solution:
Clever use of data identified customers with gardens and
created a series of personalised weather forecasts. Using
digital printing, weather-responsive, personalised mailers
were sent out.
Results:
This inspired people to improve their gardens. Outdoor
product transactions increased by 55% and sales by 34%.
CUSTOMERS TO REVAMP THEIR OUTDOORS
Source : DMA, Gold Winner, Ikea, 2013
25

VERY.CO.UK USED MAIL AS PART OF AN
Background:
very.co.uk targeted mum and baby customers, bringing together
style and motherhood via an integrated campaign.
Solution:
very.co.uk created a fashion attitude campaign: ‘Work it Baby’,
showcasing a wealth of products for mums, mums-to-be, babies
and toddlers. Integrated data and creative delivered relevant,
personalised mail.
Results:
The combination of targeting relevant products and dynamic
communication created 4,795 new customers with an increased
order value of £145, almost 3x more than the average spend.
INTEGRATED TARGETED CAMPAIGN
Source: DMA, Grand Prix Winner, very.co.uk 2011
26

IKEA CREATED MORE VALUE FROM
Background:
The IKEA catalogue is an institution. It is the cornerstone of IKEA's
marketing program and the distillation of the IKEA brand, driving
annual business performance.
Solution:
The IKEA catalogue is big and it takes up space. Space that, in
today's tough climate, is worth something. What if the catalogue 'paid
its way?' What if IKEA paid people for the space the catalogue takes
up in the home?
Results:
The 'Rent' campaign was highly successful. Research showed an
overall awareness of +12% representing a massive swing of 21
percentage points.
THEIR CATALOGUE
Source : Warc Prize for Innovation, Entrant, Ikea, 2013
Country: Australia
27

OUTREACH USED A CATALOGUE TO ENGAGE
Background:
Outreach International is a humanitarian organisation. It
needed to raise funds to help poverty stricken communities.
Solution:
Outreach International created a unique catalogue to raise
much-needed funds. It allowed donors to buy bare basics
such as goats, chickens and malaria shots, given in the
donor's name.
Results:
This campaign beat the target by 55%. Donation amounts
from the catalogue were 24% higher than online.
WITH HARD TO REACH SUPPORTERS
Source : DMA (US), Bronze ECHO Award Winner, Outreach, 2010
28

DOOR DROPS AND MAIL HELP DRIVE
Background:
Easter is a key period for DIY - better weather, longer days, people
think about their gardens. Focus DIY had a good reputation for plants
and flowers, so they wanted to find an innovative, standout way to
associate Focus with plants.
Solution:
‘Keep Britain Beautiful’ was the idea which lead to the printing of door
drops on seed paper. Existing data was used to target the best
postcodes.
Results:
The seed paper door drops were delivered to 812,000 Focus DIY
discount cardholders . Of these, 26% responded, going in store and
making a purchase with their discount card.
SALES AND LOYALTY FOR FOCUS DIY
Source : DMA, Gold Award Winner, Focus DIY, 2011
29

Background:
Home improvement projects are irregular and unpredictable so
Homebase wanted an alternative to store-wide discounting every
other weekend to drive DIY sales.
Solution:
Data analysis identified ten purchase patterns proven to lead to
future spend, if Homebase could communicate close to the
opportunity.
Personalised direct mail was sent within 6 days of spend with
messages and offers targeted to original spend to drive additional
visits and revenue.
Results:
The programme moved average response rates from 9% to 46%.
It delivered 2% of total sales (£30.4m per year) and shifted ROI
from 120% to 346%.
Source: DMA Silver Award Winner, Homebase, 2013
HOMEBASE CRM JOINED DATA INSIGHT WITH
DIGITAL PRINT TO MAXIMISE SALES
30

Background:
Low awareness levels of waitrose.com meant it struggled to acquire and
retain warm and cold high-value customers.
Solution:
waitrose.com mail delivered a multi-shop incentive, £75 off each customer's
first five shops. By combining mapping systems, demographic profiling and
mosaic targeting, the mailing targeted the10 best UK regions. Media
engaged prospects with the offer and delivered the brand’s core values
brought alive by Waitrose partners.
Results:
Weekly orders grew at three times the rate of the market. Weekly new
customer volume increased by 134%. In the targeted regions, 57% of new
shoppers placed all five shops: an increase of 49% compared to usual
retention rates.
Source: DMA Gold Award Winner, waitrose.com 2012
WAITROSE.COM GREW THROUGH TARGETED
ACQUISITION PLUS STRONG BRANDING
31

BOOTS CUSTOMERS WERE REWARDED WITH A
WITH A PERSONLISED XMAS PRESENT
Background:
Boots wanted to increase response and coupon redemption of their
advantage card Christmas statement and in-store events.
Solution:
The Advantage Card is the most loved loyalty card in the UK and members
really engage with the ‘treats for me’ proposition. So Boots sent a highly
personalised mail piece (400,000 different versions) to the 6 million
database driving them in store with coupons and offers.
Results:
Getting personal with data resulted in a record-breaking Christmas for Boots
CRM. Incremental profit increased by 60%. Coupon redemption increased by
25% due to customers receiving more relevant offers.
Source: DMA, Silver Award Winner, Boots, 2010
32

ELC USED LOYALTY CLUB TO DRIVE REVENUE
Background:
Research showed that only 10% of parents bought their
children's birthday presents from ELC.
Solution:
ELC created the ‘Big Birthday Club’, mailing parents just before
their children's birthday with a new theme each year. It delivered
engaging personalised content that was age appropriate for each
child and importantly enabled parents to click directly through to
buy.
Results:
The ‘Big Birthday Club’ recruited over a million members. It
generated over £7.5 million incremental revenue with a response
rate of 17%. ELC achieved an ROI of £1-13.
Source: DMA, Gold Award Winner, ELC, 2010
33

PETS AT HOME CREATED A PET CENTRIC
Background:
The Pets at Home loyalty scheme needed to: celebrate
owners' unique relationship with their pets and deliver
against challenging incremental revenue targets.
Solution:
Pets are as different and diverse as their owners, so the
loyalty programme was highly tailored and delivered
relevant content. Mail was segmented to communicate the
bond with their animal and personalised with pet names
and tailored content.
Results:
As a results 88% of members have swiped their VIP card at
checkout. Average transaction values are 37% higher than
for non-members and boosted those spending by 20%.
LOYALTY SCHEME
Source: DMA, Gold Award Winner, Pets at Home, 2013
34

MOTHERCARE USED HIGHLY TARGET MAIL TO
Background:
Mothercare wanted to drive greater loyalty and sales across their
retail network and communicate their unique understanding of the
parenting journey.
Solution:
The ‘Baby & Me Club’ was launched. A series of targeted direct mail
packs were sent out, each tailored to baby's age and stage
development, with advice, information and vouchers to help new
parents through their first year.
Results:
The Mothercare Baby & Me Club recruited 200,000 parents-to-be and
new parents in the first year. It achieved an ROI of 1:32 and
acquisition averaging 30,000 a month. Mothercare achieved a win-
win: new parents got the support, advice and information they need,
and Mothercare got a sales uplift.
DRIVE MEMBERSHIP OF THEIR LOYALTY SCHEME
Source: DMA, Silver Award Winner, Mothercare, 2010
35

 It’s been proven to be the most emotionally engaging media
 People still enjoy receiving it
 It has increasing standout in a digital world
 It is highly valued by people
 It is omnipresent in people houses
 It helps uplift other channels and create value
NEW NEWS ABOUT MAIL
36

THE PRIVATE LIFE OF MAIL
MAIL IN THE HOME,
HEART AND HEAD

 12 Ethnography households
 14 Focus groups
 99 Depth interviews
 213 Neuroscience / biometric participants
 401 BrandScience’s ‘Results Vault’ cases
 416 IPA Effectiveness Databank cases
 1,000+ Academic articles reviewed
 9,504 Respondents across our telephone and online quantitative surveys
18 MONTHS OF RESEARCH
39

DEVELOPED IN 8 STRANDS
 Ethnography
 Post ethnography survey
 Multisensory Communications: review of academic literature
 Tactility
 Values: Best Mail
 Mail and Digital 1 & 2
 Neuroscience
 ROI/Effectiveness metrics
40

MAIL IN THE HOME
LIFE BEYOND THE LETTERBOX
41

MAIL GETS OPENED – AT HIGH RATES
Statement, bill or information update
Brochure from a company they have ordered from before
Letter – promotion or special offer
Letter – about a product/service they don’t have
Leaflet without an address about a product/service
Leaflet without an address about a promotion/offer
Brochure from a company not ordered from before
83%
71%
69%
60%
59%
54%
54%
OPEN
Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014
43

MAIL’S JOURNEY ISN’T OVER WHEN
Adults read their mail on average for 22 minutes a day.
IT HITS THE DOORMAT
1.15PM: Collects mail and brings it into the
home with other bags and belongings
1.30PM: Opens mail whilst doing other jobs
2.15PM: Opens parcel
2.30PM: Uses laptop to get details on a piece
of mail received
5.30PM: Uses laptop again to get further
details on the piece of mail from earlier
8.30PM: Brings catalogue into lounge to read
Source: IPA Touchpoints 5, 2014 (Data based on Monday – Saturday morning)
Royal Mail MarketReach, Media Moments, Trinity McQueen, 2013
44

PEOPLE GIVE MAIL TIME
Mail is kept for extended periods, creating a constant presence in the home.
17 daysfor mail
38 daysfor door drops
45 daysfor bills and statements
Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014 45

AND SPACE
80% of adults kept some mail that
companies had sent them in the last four
weeks.
 ‘The Holding area’ where it is kept
before being dealt with
 ‘The Pile’ for mail that has been read
and will be revisited
 ‘The Display area’ for useful or
important items (local information,
time limited offers)
Display Area
Pile
Holding area
Source: TGI, Kantar Media, 2014
Royal Mail MarketReach, Media Moments, Trinity McQueen, 2013 46

MAIL GETS DISPLAYED
39% of people have a dedicated display area for mail in the home
Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014 47

MAIL IS SHARED
An average of 23% of mail is shared within a household.
Brochure from a company I have ordered from before
Statement, bill or information update
Letter – about a product/service they don’t have
Brochure from a company not ordered from before
Leaflet without an address about a promotion/offer
Letter – promotion or special offer
29%
24%
25%
23%
22%
21%
SHARE
Average of 23%
of mail shared
within a household
Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014
48

MAIL OFFERS A LESS CLUTTERED
ENVIRONMENT THAN DIGITAL
70%
“I feel that I
receive too
many
emails”*
Mail stands out due to the proliferation
of digital messages
3%
3%
22%
72%
48%
18%
19%
15%
0% 20% 40% 60% 80%
More than 10
7 to 10
4 to 6
1 to 3
How many items do you receive in a
day?
Email
Mail
51%
of emails are
deleted within
two
seconds**
Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013
*Source: Royal Mail MarketReach, Mail and
Digital Part 1, Quadrangle, 2013
**Source: Litmus Email Analytics, 2013
49

INCREASINGLY MAIL IS DRIVING PEOPLE’S
43%
download
something
54%
engaged in
social media
87%
influenced to
make online
purchases
92%
driven to online
or digital activity
86%
connected with
business
DIGITAL BEHAVIOUR
As a direct
result of
receiving
mail
Royal Mail MarketReach, Mail and Digital Part 2, Quadrangle, 2014
Question asked(S4Q1): How often have you done each of the following online as a direct result of receiving mail from a business or organisation. Base: All (n=2,375)
50

MAIL IN THE HEART
CREATING AN EMOTIONAL
RESPONSE
51

TOUCH CREATES A POWERFUL
 When people can both see and
touch something, they value it
24% more highly than if they
can only see it.
 Over a third of people say that
the physical properties of mail
influence how they feel about
the sender.
EMOTIONAL RESPONSE
+22% +24%
2.75 2.73
3.36 3.38
0
1
2
3
4
5
Psychological ownership Valuation
VISION ONLY VISION AND TOUCH
Participants were asked to subjectively grade ownership and value on a 7 point scale.
Source: Peck, Joann, and Suzanne B. Shu. The Effect of Mere Touch on Perceived Ownership. Journal of Consumer Research, 2009; IPA Touchpoints 5, 2014
54

PEOPLE FEEL VALUED AND HAVE A
BETTER IMPRESSION OF THE BRAND
The emotional impact of mail versus email
I am more likely to take it seriously
It gives me a better impression of that company
It makes me feel more valued
63%
57%
55%
18%
17%
25%
(% True of Mail vs. True of Email)
MAIL EMAIL
55

MAIL IN THE HEAD
HOW MAIL IMPACTS THE BRAIN
56

THE BRAIN RESPONDS MORE STRONGLY
Mail had a much more powerful overall impact on the key measures of the
neuroscience study than email or TV.
TO MAIL THAN TO TV OR EMAIL
Source: Royal Mail MarketReach, Neuro-Insight 2013
168
202
172
127
165
130
105
113
100
0
50
100
150
200
250
Engagement Emotional Intensity Long-term Memory Encoding
Indexvs.'Normal'restingbrain
MAIL EMAIL TV
59

IN A MULTI MEDIA CAMPAIGN
SEQUENCING MAIL LAST MAXIMISES IMPACT
Source: Royal Mail MarketReach, Neuro-Insight, 2013
Mail after TV and email
100 100 100
112
101
106
126
121
110
80
90
100
110
120
130
140
Engagment Emotional Intensity Long-term Memory
Encoding
Indexvs.responsefromfirstexposure
MAIL SEEN FIRST MAIL SEEN SECOND MAIL SEEN THIRD
Engagement
60

MAIL IN THE WALLET
HOW MAIL MAKES MONEY
61

MAIL DELIVERS ROI
Mail ROI showed a strong channel performance in BrandScience cases
Revenue Return on Investment of clients using direct mail
Source: Royal Mail MarketReach BrandScience, 2014
0
2
4
6
8
£
RROI (Revenue ROI)
62

Total ROI increased 12% when mail was included in the mix.
MEDIA MULTIPLIER EFFECT
MAIL CREATES A MEASURABLE
Source: Royal Mail MarketReach, BrandScience 2014; advertiser cases including mail versus cases without mail.
4.22
4.63
5…
4.73
4.93
6.31
1
2
3
4
5
6
7
Total Comms TV Print
RROI
RROI-NO MAIL RROI-WITH MAIL
63

MAIL DELIVERS NEW AUDIENCES
Adding mail to the mix opens up new responsive audiences. When mail is
added to the schedule
versus email on its own
64

INCLUDING MAIL DELIVERED TOP-RANKING
Campaigns that included mail
were:
 27% more likely to deliver top-
ranking sales performance
 40% more likely to deliver top-
ranking acquisition levels
SALES AND ACQUISITION PERFORMANCE
Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013
+27% +40%
45%
30%
57%
42%
0%
10%
20%
30%
40%
50%
60%
Sale Acquisition
%Clientslistingtopperforming
improvements
RROI - NO MAIL RROI - WITH MAIL
65

WITH MAIL IN THE MIX, MARKET
SHARE GREW 3x MORE EFFICIENTLY
Mail included in multi-channel campaigns drove market share growth with
3x the efficiency versus non-mail advertisers.
2.9xMarket share growth
for all clients
3.4xMarket share growth
for service sector
Comparing market share growth per 10 Extra Share of Voice points (ESOV) shows the increase in efficiency of advertising plans including mail.
Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013 66

Background:
Home improvement projects are irregular and unpredictable. Part of
Homebase’s marketing strategy was to promote everything and discount on a
frequent basis. The direct marketing strategy had been built around regular
high volume event mailings with blanket discounts
Solution:
Homebase found patterns in shopping behaviours in both transactional and
non-transactional data, identifying customer needs close to ‘Share of Project’
spending opportunities.
They identified 10 project trigger identifiers and then analysed the length and
shape of the sales curves to quantify the purchasing opportunity. For each,
they created a personalised communication plan.
Responding quickly enough to be relevant was critical. Homebase was able to
get direct mail delivered within six days and email in two. Dynamic templates
made the communication truly personalised, delivering the right message at the
right time to increase customer value.
HOMEBASE USED DATA PATTERNS TO DELIVER
Sources: DMA Best Multi-channel CRM programme Gold Award 2014, DMA Data Strategy Silver Award 2013, Marketing
Week Engage Award Winner CRM/Loyalty and Direct Marketing 2014, Homebase and MRM Meteorite
PERSONALISED CUSTOMER SUPPORT FOR DIY-ERS
68

Solution:
The programme used highly responsive direct mail, magazines, emails, at till
communications and inspiring shareable content to increase customer value,
using a hierarchy to determine customer inclusion to suit their interest or
project.
Results:
The strategy has been transformational. The evolved CRM programme has
delivered incremental sales four times greater than three years ago - ROI up
350% to 4.3:1. It also smashed its profit target by +48% creating a
demonstrably more engaged and valuable customer in terms of both total
spend and activity – mail response increased from an average of 9% to a
maximum of 46%, up 500%, ATV increased by 13.5% and repeat visits up 6%.
TARGETING AND PERSONALISATION COMBINED
Sources: DMA Best Multi-channel CRM programme Gold Award 2014, DMA Data Strategy Silver Award 2013, Marketing
Week Engage Award Winner CRM/Loyalty and Direct Marketing 2014, Homebase and MRM Meteorite
WITH FAST REPONSE DELIVERED DRAMATIC GROWTH
69

IN SUMMARY
 Mail brings a brand into the home where it is kept, displayed, and/or shared
 Its tactile qualities have powerful emotional and rational impact that can be identified
and proven
 Mail makes your message more memorable
 Mail drives successful return on investment
 When used in integrated campaigns, it can provide a measurable media multiplier effect
 Mail delivers top-ranking sales and acquisition growth and efficient market share growth
The newly transformed Royal Mail is a credible, motivated and connected partner to you and your
marketing agencies.
Media and
Data
Planning
Bespoke
Research
and Insight
Data
Provision
Distribution
70

BIG DATA IS DRIVING MORE 121 DIRECT
 Data is driving more 121 and personalised interactions.
 Trigger based communications based on actual and future behaviour change.
 There is a strong role for highly targeted personals mail in this space.
 Less short termism and more longer term ROI.
COMMUNICATION
72

ADVANCES IN TECHNOLOGY MEANS
USB film content
Augmented Reality: Online / offline
integration
VideoPaks
Sensory Mailings: Taste & smell
increases tangibility
Interactive print
Digital templating: cheaper, faster
& more personalised
QUICKER, CHEAPER & MORE IMMERSIVE MAILINGS
73

NEW DEVELOPMENTS FOR MAIL
Barcode
A new barcode standard for
machine readable
Business, Advertising and
Publishing Mail
Technology
Sorting machines that
read the new barcode
and collect mail data
Reporting
Mail Analytics that reports
on volume, compliance,
predicted delivery and
overall performance
Ultimately generating more efficiency, greater transparency and
measurement for your mail campaigns
74

WHAT WE COULD DO FOR YOU
Work with you to increase the performance of your DR channels
• Best case for mail
• Test matrix
• ROI
• Contextualise within
the media mix
• Addressed/
unaddressed mail
1. Review your
competitive set.
2. Understand the key
dynamics of your
sector,
3. Unearth powerful
insights in relation to
Mail and how Mail can
address your business
issues.
• Acquisition
• Loyalty
• Retention
Understand the key
issue
Sector experts gather
insight
Recommendation
75

Royal Mail, the cruciform and all marks indicated with ® are registered trade marks of Royal Mail Group Ltd.
Royal Mail Group Ltd 2014. Registered Office: 100 Victoria Embankment, London EC4Y 0HQ.© Royal Mail Group Ltd 2014. All rights reserved.
THANK YOU
76

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