Retail Direct Mail Marketing Explained

Some of our recent blogs have touched on the latest trends in direct mail marketing as they relate to the healthcare, financial services and hospitality industries. However, it’s time to take another look at the use case that’s perhaps most familiar to the average consumer: retail direct mail.

In today's hyper-competitive retail landscape, direct mail advertising allows retailers to reach the right customers at precisely the right time. A direct mail marketing company can use the various data sources available to create targeted, personalized and highly relevant retail direct mailing campaigns.

This blog will explore direct mail strategies in general before focusing on common uses of retail direct mail.

What are the different types of direct mail?

Direct mail marketing first gained popularity in 1872 when Aaron Montgomery Ward launched a mail-order business with a simple one-page catalog. Today, direct mail advertising campaigns come in many forms, each serving different purposes and delivering unique benefits. Some of the most common types are as follows.

• As Mr. Ward surmised, mailing catalogs and brochures is an effective way to put a complex message in front of a geographically dispersed audience. A large amount of information can be communicated in one place and the recipient can browse at their leisure.
• Postcards are a cost-effective way to communicate messages (e.g., new store openings, clearance sales, special events) that have the potential to initiate immediate action. Their simplicity and ease of production make postcards a popular choice for direct mail marketing.
• Personalized letters create a more intimate connection. By addressing the recipient by name and tailoring the content to their interests or past purchases, it’s possible to dramatically increase engagement and response rates.
• Self-mailers are single sheets of paper folded and sealed without an envelope. They are cost-effective and the sealed format means they can be used in endless ways for direct mail marketing, from product announcements to personalized promotions.
• Dimensional mailers are three-dimensional packages that stand out from regular mail. They can include items like product samples or promotional gifts and are often used to reach high-value customers.

Is direct mail a good marketing strategy?

Despite the growing dominance of digital marketing channels, direct mail advertising remains a potent tool for marketers. Study after study validates that a direct mail strategy makes good business sense. These are some of the reasons why.

Tangibility and Engagement

One of the primary reasons direct mail advertising is so effective is its tangibility. Unlike digital ads that can be easily ignored or deleted, direct mail pieces are physical items that recipients must handle. This tangibility creates a sense of engagement that digital channels lack. According to the Data & Marketing Association, direct mail boasts an open rate of up to 90% compared to only 20-30% for email.

High Response Rates

This heightened engagement enables direct mail marketing to consistently achieve higher response rates than other marketing channels. Direct mail boasts a 3.7% response rate, outperforming mobile (1.9%), email (1%), social media (1%) and internet display ads (0.02%).

Consumer Preferences

Personal preference also plays a significant role in the effectiveness of direct mail strategies. More than 70% of American consumers prefer to be contacted by direct mail because they can read it whenever they want, highlighting the enduring appeal of physical mail as a direct marketing strategy. Furthermore, 90% of millennials find direct mail to be more reliable than email and 75% say it makes them feel special or valued. This deeper level of engagement leads to higher conversion rates.

Brand Recall and Purchase Influence

Finally, it’s important to note that direct mail marketing has a strong impact on brand recall and purchase behavior. For example, Marketing Profs notes that 75% of people can recall a brand after receiving direct mail compared to only 44% for digital ads.

How much does direct mail marketing cost?

No two direct mail advertising campaigns are alike, making it difficult compare the cost of a direct mail strategy to other channels. However, while direct mail marketing services often come with higher up-front costs than email marketing and other digital channels, research confirms that the investment is well worth it.

Statista reports that a direct mail strategy delivers a 29% return on investment (ROI) compared to only 16% for online display and 23% for paid search advertising. The Association of National Advertisers (ANA) confirms this finding. According to their own method of calculation, the ANA reports that direct mail advertising delivers the highest ROI of all available media at 112%, outperforming even SMS text (102%) and email (93%).

What is direct mail retailing?

We close with a look at retail direct mail, arguably the “killer app” of direct mail marketing in the U.S. today. As our headline notes, direct mail for retail is especially powerful because of the opportunity to reach the right customer at the right time — which elevates engagement, response and ROI even further. This power comes from the many data sources now available to direct mail marketing services, including:

• Demographic data such as age, gender, income and location.
• Triggered behavior data, including recent purchases.
• Website visits, search histories and abandoned shopping carts.
• Third-party data sources such as “new mover” data.

A data-driven approach to retail direct mail unlocks cost-effective direct mail strategies and the creation of targeted, relevant direct mail marketing campaigns. Engagement soars, response rates rise, brand loyalty deepens and ROI increases as the cash registers ring. Here are some classic applications of direct mail for retail.

Seasonal Promotions

Retailers often use direct mail marketing to promote seasonal sales and events. For example, holiday catalogs, back-to-school brochures and summer sale postcards are common. These campaigns are designed to drive traffic to stores during peak shopping periods.

New Product Launches

When launching new products, retail direct mailing tactics can be used to create buzz and excitement. Sending out brochures or postcards with information about the new products, along with special offers or discounts, can entice customers to check them out.

Loyalty Programs

A direct mail strategy is often used to communicate with members of loyalty programs. Retailers can send personalized letters or postcards with exclusive offers, rewards updates and special event invitations to keep loyal customers engaged. Birthday rewards programs are one common example.

Reactivation Campaigns

When customers haven't made a purchase in a while, retail direct mail can be used to re-engage them. Sending a personalized letter or postcard with a special discount offer can encourage the lapsed customer to return to the retail store or website.

Retail Store Openings and Events

When opening a new store or hosting a special event, retailers often use direct mail advertising to invite customers and generate excitement. Personalized invitations or event brochures can make customers feel valued and encourage attendance.

Direct Mail Marketing Services From Taylor

Taylor is one of the largest and most sophisticated direct mail marketing companies in North America. Our comprehensive approach to direct mail marketing services is especially well-suited to direct mail for retail. Everything needed to create a high-performing retail direct mail strategy is available in a single partner.

• Expertise in data, postal logistics, mail piece creative and USPS regulations.
• Advanced data analytics capabilities, including custom modeling for precise targeting.
• Data-driven retail marketing programs that give your direct mail advertising a strategic edge.
• Direct mail printing services through one of the largest commercial print networks in the nation — including innovative lenticular printing
• Omnichannel communications delivery through direct mail, email, display ads, SMS text and social media.
• Automated direct mail services that empower you to create, manage and track retail direct mail campaigns from start to finish.
• Responsible business practices that reduce paper waste and shrink your environmental footprint.

Looking for a direct mail marketing company that specializes in direct mail for retail? Contact your Taylor representative to learn more.