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Multichannel Trend Executive Summary Part2 7 26 11


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Multichannel Trend Executive Summary Part2 7 26 11

  2. 2. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITALDIRECT TO CONSUMER, PUBLISHING AND NOT-FOR-PROFIT:LARGER MORE FREQUENT ORDERS PREVAILEDThe heavy recession plaguing consumers and marketers during 2008 and 2009 loosened its gripas consumers increased purchases but with temperance. Consumer interest varied significantlyduring 2010 as more households tended to participate in non-Publishing offers but in general,households purchased more frequently with larger value orders.GROWERS BY OFFER TYPEThe Continuity market saw an 8% increase in sales due primarily to a strong 26% lift intransactions per household, despite 17% decrease in average order value. Sales for Sweepstakesoffers grew 9%, also aided by a 22% increase in transactions per household although coping witha 11% reduction in average order value compared to2009. Health/Non Pharmaceutical sales were up 11%, % Change in Sales from 2009 to 2010primarily from a 9% increase in average order value Solo Offers -6%and despite a marginal 1% decrease Continuity Offers 8%in transactions per household. Not-For-Profit was up Sweepstakes Offers 9%for all three offer types – Societal Benefit, Environ- Health/Non Pharmaceutical Offers 11%mental, and Medical offers – experiencing growth,primarily driven by more gifts per donor, as donors Publishingoverall declined. For Publishing, only the studied Books - Health/Diet 43%categories of Books – Health/Diet, Newsletters – Books - Health Offers -26%Business and Financial, and Magazines – Hobby, were Books - Cooking Offers -9%up (43%, 21% and 4%, respectively). Books - Hobby -9% Books - General -16%DECLINERS BY OFFER TYPE Magazines - Hobby 4%The Solo market saw a 6% decrease in sales, primarily Magazines - Home -23%due to a 7% reduction in average order value. Most Magazines - Men’s Offers -31%Publication category sales, were down compared to Magazines - Children’s -36%2009, with Books – Health down 26%, influenced by Magazines - Women’s -41%fewer subscribers (28%), Magazines – Children’s down36% due heavily to Magazines/Newsletters - General 13%26% fewer subscribers and fewer subscriptions per Magazines/Newsletters - 21%subscriber, and Magazines – Women declined 49% Business and Financial Offersdue to a 37% reduction in subscribers. Newsletters - Health -9% Not-For-ProfitANNUAL SHARE OF WALLET SPENDING Environmental Offers 13%TRENDS Societal Benefit Offers 51%Annual share of wallet of consumers was Medical Offers 2%calculated by looking at the total dollar amount ofpurchases from 2009 to 2010 captured across all Aba-cus Cooperative member companies and then looking at the percentage breakdown of purchaseswithin various purchasing categories. 2
  3. 3. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITALDIRECT-TO-CONSUMERVisible in the Annual Wallet Share Spending Trends table, Solo buyers spent 13% of their wallet,or $703MM, on Solo offers. Continuity buyers spent 10% of their wallet, or $265MM, oncontinuity offers and Sweepstakes buyers spent the greatest amount on sweepstakes offerswith 16% of their annual wallet share or $701MM. Health/Non-Pharmaceutical Offerscaptured the highest share of wallet at 18% of their buyers’ annual wallet spend, or $1.1B.PUBLISHINGFor Publishing subscribers, annual wallet spend was generally in the 2%-5% range with a fewexceptions: The Newsletters – Business and Financial offers had the highest share at 12%, or $84MM,Books – Health Offers were 7% and $17MM. The Magazine groups of Hobby offers, Women’s offers,and Home offers had the lowest share of wallet, with each claiming a 2% share and $29MM, $26MMand $20MM, respectively.NOT-FOR-PROFITIn the Not-For-Profit sector we analyzed three key categories including Environmental Offers,Medical Offers, and Societal Benefits Offers. The trends of donors across these categories weregenerally strong and include an 11% share of wallet, or $272MM, for Environmental Offers. Medicaloffers received 9% of their donors’ annual wallet share, or $324MM, and 13%, or $276MM, for SocietalBenefit Offers.KEY CONSIDERATIONS FOR TODAY’S MARKETERSIn addition to the key considerations given in prior Trend Reports,, including the importance ofimplementing strategic share gain strategies and leveraging the power of a marketing databaseto gain a 360o view of customers, key considerations in this year’s report focus on strategies thatenhance the customer experience and build long-term loyalty, exploit all media options, utilizedata to more effectively cultivate the housefile or improve the use of complementary marketingefforts, and leveraging full-service marketing solutions providers.FOCUS ON THE CUSTOMER EXPERIENCE – More has changed in marketing in the past fiveyears than over the past 50 years. Consumers are more empowered and in control of the marketingexperience than ever before. The Internet and social media have resulted in a proliferation ofchannels, and consumers have less time to shop and buy. Marketers need to develop an approachto deliver relevant interactions that anticipate and respond to the many ways consumers want toengage with, shop, and buy from brands. This requires that marketers have the ability to leveragedata and technology to engage with customers in 1:1 conversations across all channels in real-time.Using a data-driven approach, dramatic results occur when marketers create customer experiences,fueled by relevance and drawn from customer
  4. 4. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITALEXPLOIT MEDIA OPTIONS – While seeking to acquire customers, Direct Mail stilldelivers results. In a pure channel comparison, it produces higher sales per household thanOnline. Understand which prospects and customers have a preference for engaging with yourbrand Online and through email to strengthen the marketing mix and append existing housefilerecords with a complete set of targeting data. With advanced solutions now available, tailoringbanner ad placement to deliver your messages to the audience most likely to respond furtherimproves visibility and effectiveness.CULTIVATE HOUSEFILES – Marketers made strong efforts to build housefiles througheffective prospecting but cutbacks over the past few years still demand attention. Appendingexisting customer data records with new insights will help make the most of customer marketingefforts, especially in the new era of 1:1 marketing.MAXIMIZE PROFITABILITY – While rising costs are impacting marketers in many direct andindirect ways, from postage to raw materials, and distribution, marketers must continue to focuson reducing costs while still achieving top line revenue targets. Thorough understanding ofwhich targets and segments are reducing their purchases will also help deliver stronger returnson investment. Identifying the near-term value of targets will also enable marketers to bringthe most cost-effective customers into the housefile. More marketers are consolidating thebulk of their needs with a single provider enabling processing time to be reduced, faster speedto market, attaining efficiencies of scale and bundled pricing to improve total ROI, and relief foroverloaded staff. Best-in-class marketing service providers are able to provide a full toolbox ofnecessary services and solutions direct marketers need such as large and growing universes ofprospect names, housefile modeling, hygiene for both mail and email files, plus insightful andin-depth analytics.Each year our industry continues to change and evolve to new market forces and emergingtrends. The 2011 Abacus Trend Report seeks to quantify the trends that are shaping themarketing environment and provide a tool that enhances the strategic decision-makingcapabilities of marketers. Through our end-to-end suite of offerings, Epsilon Targeting iscommitted to helping organizations reach their marketing and business goals by overcomingthe challenges of our dynamic business environment, improving top-line performance, andidentifying areas to reduce processing and mailing costs.UTILIZE EPSILON’S ADDITIONAL RESEARCH - In an effort to help marketers leveragethe power of customer insight to build relationships, drive results, and boost ROI, Epsilonconducts several thought leadership projects in addition to the Abacus Trend Report. Thetrend summaries, research, whitepapers, and industry best practices cover the most pressingtopics facing marketers today, as well as the emerging challenges in our dynamic industry.For more information please visit 4
  5. 5. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITALABOUT THE TREND REPORTDATA SOURCESTwo main data sources were used to compile the Abacus Cooperative 2011 Trend Report. Thesesources leverage the combined technology and data assets of Abacus and comprise a wealth oftransactional data unmatched in the direct marketing industry.ABACUS COOPERATIVEThe data housed in the Abacus Cooperative database does not include all direct transactionsconducted in the U.S., but does provide a representative view of multichannel industries.The report analyzes 626 multichannel offers with activity across channels.For this Trend Report, analysis was also conducted on a subset of the Abacus Cooperativemembers consisting of multichannel merchants, which we refer to as the “MultichannelBenchmark Group.” Each of the merchants in this group separates its call center and web data.This provides a stable group of merchants for analysis over time which isolates channel shiftsand differences in seasonal purchasing patterns by channel.ABACUS CHANNELVIEW® DATAFor an analysis of in-the-mail circulation trends, we have identified a separate comparative groupof 39 Consumer multichannel merchants from Abacus ChannelView with full activity fromJanuary 1, 2009, through March 31,
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