Direct Mail Strategies for Increasing Retail Sales and Customer Loyalty

Since 1872, the retail industry has witnessed the power of direct mail firsthand. Aaron Montgomery Ward's revolutionary mail-order business, Montgomery Ward and Company, kickstarted a retail revolution. A modest one-page "catalog" marked the beginning of a transformative era for retail direct mail, igniting the immense potential of reaching customers through their mailboxes.

In today's highly competitive market, a staggering 76 percent of retailers still rely on the mail channel to drive both repeat and new customer purchases. Because direct mail can deliver a relevant and customized message on a one-to-one level (just like the most popular digital channels), some retail brands are even increasing mail investments to escape the rising acquisition costs of digital advertising rate hikes.

The ticket to growth and profitability in 2023 lies in improved customer experience and recurring engagement. Even retailers that have been successfully mailing for decades should never settle on the status quo. Leverage the following retail direct mail strategies to create a lasting impression with your audience and maximize your performance.

Strategies to Improve Your Retail Direct Mail and Find Scale

As a tangible and influential media, just the physical act of holding a mail piece plays a crucial role in maintaining consumers’ attention and impacting purchasing decisions. Although retailers succeed when customers continue to make repeat purchases, simply adding regular mail drops to your marketing mix will only do so much for sales performance. The key to optimizing the mail channel for scale is to continue testing and exploring which targeting, creative, and offer strategies work best for your brand, your growth goals, and your audience.

Targeting Strategies

To improve your retail direct mail targeting, it's important to explore new modeling approaches and sources of data that will drive your campaign goals. Highly targeted mailing lists can be built to focus on specific retail locations or to pinpoint individuals with specific characteristics. This will ensure that you effectively reach your intended audience with the right message at the right time.

Custom models are built from quality offline data sources and first-party customer data to identify and reach more prospects. The most common approach to modeling is to leverage affinity lists to target a group of individuals who share a common interest, behavior or characteristic. By examining these deterministic data points — e.g., purchase history, demographic information, online behavior, survey responses tied to an individual and their physical address — strong performing prospecting lists can be created and efficiently optimized for performance.

Creating and testing trigger files for life events like new movers, parents, or marriages can attract new prospects or inform loyal customers about additional offerings beyond their awareness. You can also consider adding a segment of consumers that have previously purchased from your business for re-engagement.

To minimize data expenses, basic selections within a defined geographical area and geotargeting have proven to be successful when the offer has broad appeal. Carrier route targeting can also save on postage costs by concentrating on specific carrier routes assigned to individual mail carriers. The underlying idea is that individuals residing in the same neighborhood typically share similar demographics and psychographics, which makes them promising prospects.

If you're a national retailer with multiple locations, a targeted shared mail program allows you to send at high volumes with limited costs. This strategy has proven successful for retailers that have a strong couponing program, as it helps generate additional sales while maintaining a profitable cost per acquisition.

The skill sets and resources required for data append and retrieval, preparation and modeling are strenuous on timelines and resources for many in-house marketing teams. Maintaining quality during data processing and integration is crucial to the overall performance of your campaign, both in response rates and budget. This is where direct marketing agency partnerships really shine.

Creative Strategies

While it’s important to keep your mailer fun and engaging, it should also be informative and the format should align with your strategy.

If you’re a brick-and-mortar retailer, help potential customers find you easily by including your store address on the mailer. If you have a new or temporary location, add a simple map that shows cross streets and recognizable landmarks. Consumers also appreciate when store hours are included so they know when they can visit. Another strategy is to highlight yourself as a local retailer and a true partner to the community.

The size of your mailer is a critical element of retail direct mail campaigns. Surprisingly, smaller postcards can significantly outperform larger ones. Consumers are more likely to keep a smaller piece in their purse, car, bag or pocket. If you simply want to drive awareness and traffic to your store, a less expensive format may suffice. However, if you aim to boost sales of specific items or showcase the variety of products available, a larger format such as a roll fold or mini catalog allows you to highlight multiple items and create a visually enticing display.

Your mailer should also include a method for tracking the success of your campaign, like a promo code or coupon. With the increasing use of various payment options, you’ll want to make it easy to attribute sales back to your direct mail campaign. Integrating QR codes with point-of-purchase systems enables automatic registration of the offer when scanned. This streamlines measurement and allows you to gather valuable analytics.

Offer Strategies

Consider the goal of the campaign: Is it to drive traffic to a location, generate specific sales, introduce a new location, or increase brand awareness? The offer should incentivize the desired behavior you want to drive, and be exclusive to your direct mail audience. Not only does exclusivity make consumers feel special and yield better results, but it’s easier for you to track campaign performance.

Experiment with different approaches such as offering a specific dollar amount off, a percentage discount, a buy-one-get-one free deal, savings on a specific product or category, savings on purchases over a certain threshold, or savings within a limited time frame. Offering a $10 discount or a 10 percent discount might both be valuable, but one may have a higher perceived value among a specific demographic.

You can also use your direct mail offer to create consumer engagement with interactive elements. Scratch-offs or peel-and-reveals to obtain the offer, scanning the mail piece at the retail store for a discount, or asking customers to write a review or share their experience on social media to get a special offer are all examples of how you can use retail direct mail to help drive behavior.

The Impact of Direct Mail Marketing on Retail Sales

With effective direct mail, any retailer can drive sales to new heights. For example, a food and beverage retailer sought a direct mail agency to increase traffic and sales at its seasonal pop-up locations. It had previously managed its mail program in-house, but lacked the expertise and resources to properly scale the program.

The brand partnered with SeQuel Response to launch a targeted direct mail campaign to support multiple locations, tailored to each pop-up's sales goals and timed with store openings. The plan included personalized prospect models based on purchase likelihood and location. Postcard mailers were designed with exclusive in-store offers which could be scanned at the POS for redemption. Based on directly attributable offers, 13 percent of the seasonal transactions were driven by mail, and mail recipients purchased 6 percent more items per transaction. By partnering with an experienced agency, the retailer successfully scaled its mail program and met critical quarterly sales goals.

Retail direct mail remains a powerful tool for increasing sales and customer loyalty. Conducting regular tests is essential to ensure reliable results. By testing offers, focusing on targeting, and enhancing creative strategies, retailers can optimize their direct mail campaigns for success.

Ryan Wilder is a senior marketing strategist at SeQuel Response, an award-winning direct response agency based out of Minneapolis.