Direct Mail Breaks Outdated Marketing Assumptions

Since the Great Recession, there’s been a trend in America to shed all physical mail. Many companies stopped mailing catalogs, direct mail letters, and newsletters, all in favor of digital products. The news outlets even declared direct mail dead.

Only a few short years later, direct mail is on the rise again. As a company that sends print newsletters, we are seeing both large and small businesses refocus on direct mail as they discover that they’ve swung the pendulum too far in the digital-only direction.

In the U.S. alone, Costco sends 8.6 million magazines/catalogs per month — the third largest monthly publication in the world (based on 2013 circulation numbers). The average member who receives a Costco Connection has a household income of $156,000 annually, and 56 percent of members who receive the monthly magazine buy something based off of what they read in it. That is so huge. Can you imagine the amount of lost revenue Costco would experience from not sending a print edition? How many people would even read a digital version?

During the Great Recession, due to the cost of sending a print magazine each month, Costco considered discontinuing the print version of the magazine, but found that their affluent members (or all Costco members) overwhelmingly preferred the print edition. Ginnie M. Roeglin, Senior VP of Costco’s e-commerce and publishing, said she expects the print edition of the magazine to continue to grow in circulation for many years to come.

If we had only one example, maybe we could chalk it up to all those Costco members just being a bit strange (which you know is true if you’ve ever shopped at a Costco on a Saturday), but they aren’t the only ones.

Related: 4 Reasons to Use Direct Mail Marketing Instead of Email Marketing

Williams-Sonoma is the parent brand to seven companies, including Pottery Barn and West Elm. Their Executive Vice President and Chief Strategy and Business Development Officer, Patrick Connolly, is quoted saying, “They [catalogs] are still a very, very important part of the marketing strategy.” He also reveals that a full 50 percent of the company’s marketing budget is spent on catalogs each year. What?! Seven different brands and half of the budget is going to old-school catalogs? Are they crazy? Not one bit. In quarter one of 2016, they saw a profit of $141,000,000.

Online-only men’s retailer Bonobos decided to dip their toe in the catalog waters a few years ago with a small test. Can you imagine the fight that went on inside this online-only retailer’s boardroom, when some brave soul suggested they spend part of the budget on print catalogs? Bonobos ultimately decided on a small test in 2013, and the results led them to not only continue mailing, but to increase the number of catalogs mailed. Now, more than 20 percent of the website’s first-time customers are placing orders because they received a catalog in the mail. Crazy, right? To add another twist to this story, those same catalog buyers are spending 1.5 times as much as first-time buyers who did not receive a catalog.

High-end retailer Neiman Marcus has found they get $4 back in sales for every dollar they spend on producing, printing, and mailing a catalog. Boden, a U.K. retailer, has found that the average person spends between 15 and 20 minutes per month reading their catalogs.

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