This document discusses direct marketing strategies for retailers. It begins by noting that the retail sector has grown faster than the overall economy since 2013 as consumer confidence has improved. It then discusses how the retail landscape has changed, with consumers now using multiple channels and expecting seamless cross-channel experiences. The document emphasizes that direct mail remains an important marketing channel for retailers, comprising a significant portion of their advertising budgets. It presents case studies of how retailers have successfully used direct mail to drive revenue through personalized incentives, immediate offers, and loyalty programs.

1. DIRECT MARKETING
IN TODAY’S MULTI-CHANNEL
RETAIL MARKET

2.  Retailer marketing 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 TODAY
2

3. As the economy has begun to recover, growth in the
retail sector is growing ahead of the economy
 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 on
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: House of Commons report, June 2014
Nielson Ad Dynamix, October 2014
3

4. BUT UNCERTAINTIES KEEP CONSUMERS CAUTIOUS
“How would you generally describe your financial
situation at the moment?” JUNE 2014
Base: 2,000 internet users aged 16+
Source: GMI/Mintel, Consumers and The Economic Outlook - Quarterly Update - UK - July 2014 Current Financial Situation, 2014
0
5
10
15
20
25
30
35
40
45
50
4

5. CONSUMER RETAIL BEHAVIOUR HAS
FUNDAMENTALLY CHANGED
Due to the recession
 Rise of price-led retailers
Aldi, Lidl, Poundland
 Consumer pride in being ’smart’ shoppers
 Deal seeking as entertainment
Groupon
Coupon Clubs
Social media
Due to the internet
 Price comparison at your fingertips
 PCWs, Price checkers
 Mobile use in-store
 Access to vouchers and offers online
 Ability to shop 24/7
 Consumers are both Showrooming and
Webrooming
5

6. RETAIL IS NOW ABOUT SO MUCH MORE
RETAIL JOURNEY
Exploration
Consideration
Evaluation
Purchase
Experience &
Entertainment
Information,
Authority &
Reviews from
staff & peers
Availability
Range
Trial & touch
Personalised
relationships
Ease
Convenience
Accessibility
Price
Quality
Added value
THAN A TRANSACTION
“Customers have less time and patience
than ever before. They’re more
demanding of information, service and
speed. They’re becoming increasingly
tech savvy, more competent and better
informed, and they’re no longer willing to
make sacrifices to shop from retailers
who aren’t willing to make sacrifices for
them.”
Tony Stockil
CEO Javelin Group
6

7. CONSUMER RETAIL JOURNEYS
A MIX OF ONLINE AND OFFLINE
Source: Google, IPSOS OTX, 2012
Stores
Websites
Apps
Online search
Social media
Collateral
Catalogues
7

8. MULTI-CHANNEL BEHAVIOUR IS GROWING
68.40%
9.80%
3.90%
17.90%
0
Number of channels used during clothing shopping
in 2002
1
2
3
4
5
41.80%
38.30%
7.20%
3.40% 9.30%
Number of channels used during clothing
shopping in 2012
1
2
3
4
5
Source: Conlumino consumer research, Retail Week, November 2013
Base: Online poll of 1,670 consumers with internet access
8

9. MULTI-CHANNEL SHOPPER JOURNEYS ARE NOW
 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 has reached
as high 41% in some categories
 Catalogues have a presence in most categories
THE NORM
Source: Changing trends in multichannel browsing and shopping preferences, eDigitalResearch plc, September 2012
Servicing the connected consumer, The Multichannel retail opportunity, Deloitte, 2011 9

10. CROSS-CHANNEL EXPECTATIONS ALSO
 Some 35% of internet users have used click-and-collect
in the last year
 Consumers are demanding a range of delivery options
to meet their lives and needs, with click-and-collect now
evolving from in-store to a range of choices including
‘hubs’ such as Argos and third party services near
transport, retail centres and homes
 Mintel estimates shoppers will collect 140 million online
orders worth £5.6B in 2014
 A mix of price, convenience and speed are driving the
growth of click-and-collect
Source: GMI/Mintel, Click-And-Collect UK, September 2014
Estimated value of online click-and-collect
orders (incl. VAT), 2012-15
Estimated segmentation of click-and-collect
orders, by type of collection service, 2013
EXTEND TO DELIVERY
10

11. 50%
Say they buy
more frequently
if they regularly
receive a
catalogue
40%
Buy more than
originally
intended when
shopping with a
catalogue
65%
Who decide to
buy something in
a catalogue, end
up buying it from
that retailer
81%
Of these
purchases were
influenced by the
catalogue
74%
Of those who
receive a
catalogue,
bought from the
retailer within 6
months
CATALOGUES REMAIN CRITICAL AS A
MULTI-CHANNEL CHOICE
Consumers are using catalogues to buy more, and more often
“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.” (UK Retail Futures).
Source: Royal Mail MarketReach, Print Catalogues in a Digital World, Illuminas, 2014
11

12. CATALOGUES INFLUENCE AND INSPIRE
FROM BROWSING TO BUYING
36
36
37
43
46
11
12
12
18
21 67%
61%
47%
Catalogues help me to plan and think
about what I want to buy in my own time
Catalogues are helpful for discussing
and making purchases with my family
I usually make any purchases soon
after receiving the catalogue
48%
49%
If I’m looking for something in particular,
catalogues that I have at home are often
my first port of call
When I’ve found something I want to buy
from a catalogue, I tend to buy it direct
and not look at price comparison sites
Agree Strongly agree
Source: Royal Mail MarketReach, Print Catalogues in a Digital World, Illuminas, 2014
Base: All purchasers from a catalogue (n=743)
12

13. CATALOGUES AND ONLINE
Of all consumers have requested a catalogue from a website
Say catalogues prompt them to go online
Like to browse both a catalogue and online before
purchasing
Prefer the way item are displayed in catalogues compared to
online
50%
66%
65%
52%
A PERFECT PARTNERSHIP
Source: Royal Mail MarketReach, Print Catalogues in a Digital World, Illuminas, 2014
Base: All purchasers from a catalogue (n=743)
13

14.  68% of marketers say personalisation based on behavioral
data has a high impact on ROI, and 74% say it has a high
impact on engagement
 "Winning loyal customers comes down to being relevant to the
individual shopper whenever and however they choose to
interact with you. Relevant messages build trust with the
customer and keep that retailer top of mind for when the
customer is ready to shop again.“
Graeme Grant, President and COO of CQuotient
CONSUMERS ARE RESPONDING TO
PERSONALISED RELATIONSHIPS
Source: Bond Brand Loyalty Report, E consultancy, 2014
Customers' overall
satisfaction with
loyalty programs is
4.6 times higher
when they receive
very relevant
communications
14

15. RETAILERS AND CONSUMERS CONTINUE
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
When was the last time you used a loyalty card
Source: Retail Loyalty and the Consumer, Conlumino & SAS, August 2013
 42% of department store shoppers want
better loyalty schemes. Meaning better
rewards could encourage customers to
spend more.
 40% of UK shoppers are less likely to
shop somewhere that doesn’t offer
loyalty cards
88%
65%
95%
0% 20% 40% 60% 80% 100%
Use loyalty cards regularly
Consumers who have 3 or more
loyalty cards
Consumers who own at least one
loyalty card
TO SEE VALUE FROM LOYALTY CARDS
9 in 10 consumers report using a loyalty card in the last week
15

16. MULTI-CHANNEL RETAILERS WHO INCREASED
DIRECT MAIL SPEND
Source: Nielsen Ad Dynamix, 2014
16

17. DIRECT MAIL MAKES UP A SIGNICANT PART OF
DM spend as % of total advertising budget on Nielsen retail related advertising categories,
November 2013 to October 2014
Source: Nielsen Ad Dynamix, November 2013 to October 2014
RETAIL RELATED ADVERTISING SPEND
71.87
20.68
72.66
14.77
29.54
88.34
68.28
94.26
21.60
74.18
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
72% of mail order advertising and 21% of retail and online retail spend is on direct mail
17

18. MAIL SPEND BY RETAIL CATEGORY YEAR ON YEAR
Mail Order Direct Mail spend grew by £22m in the past year
20,605,511
4,364,677 11,945,479
271,654,172
6,490,326
126,124,647
23,141,580
5,817,621 8,239,330
293,045,081
5,990,378
127,140,347
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
Clothing & Accessories Cosmetics & Personal
Care
Food Mail Order Online Retail Retail
01 Nov 2012 - 31 Oct 2013
01 Nov 2013 - 31 Oct 2014
Source: Nielsen Ad Dynamix, November 2013 to October 2014
18

19. TV AND PRINT DOMINATE RETAIL
All retail related sectors* excluding Mail Order and Online retail: - media split for the last two years
Source: Nielsen Ad Dynamix, *
Retail, not including mail order,
November 2012 to October 2014
MAIL REMAINS THE THIRD STRONGEST MEDIA
0.86
19.07
2.93
1.06
4.26
26.98
10.01
34.79
Cinema
Direct Mail
Door Drops
Internet
Outdoor
Press
Radio
TV
0.31
18.98
2.74
2.69
4.42
30.64
8.71
31.46
Cinema
Direct Mail
Door Drops
Internet
Outdoor
Press
Radio
TV
Retail % by
media November
2013 to October
2014
Retail % by
media November
2012 to October
2013
19

20. 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
20

21. 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
21

22. CREATIVE TRENDS
22

23.  Fashion retailers continue to use mail to
deliver catalogues and mini catalogue
style content
 Mail creates engagement at a glance,
drawing customers in to spend time
browsing either with the catalogue, in-
store or online
 Most creative also includes either a
generic or personalised offer to improve
response
CATALOGUES / MINI CATALOGUES
23

24.  Mail is being used to announce
immediate events and drive customers
to act
 It’s most effective for sales and limited
offers as well as limited time offers
 Creative tends to be simple with big
bold messaging to ensure it is noticed
and ideally retained and acted on
CREATING IMMEDIACY
24

25.  Mail recognises customers and
rewards them
 Whether with offers, discounts or
news, they make customers feel
recognised, valued and
rewarded
 Showing customers what they
received and why reinforces the
brand relationship
PERSONALISED INCENTIVES
25

26.  Mail is being used to add value for
current customers
 The campaigns highlight special offers
and benefits as a way to add value and
enhance the customer’s relationship
with the brand
RETENTION COMMUNICATION
26

27. CASE STUDIES
DIRECT MARKETING THAT
DRIVES VALUE
27

28. 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 Winner, ELC, 2010
28

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 Winner, Homebase, 2013
HOMEBASE CRM JOINED DATA INSIGHT WITH
DIGITAL PRINT TO MAXIMISE SALES
29

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 Winner, Waitrose.com, 2012
WAITROSE.COM GREW THROUGH TARGETED
ACQUISITION PLUS STRONG BRANDING
30

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 Winner, Boots, 2010
31

32. 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
32

33. 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
33

34. 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 Winner, Pets At Home, 2013
34

35. 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
35

36. 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
36

37. 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
37

38. 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
38

39. DOOR DROPS AND DIRECT 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 Winner, Focus, 2011
39

40. MOTHERCARE USED HIGHLY TARGETED 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 Winner, Mothercare, 2010
40

41.  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
41

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

43. 43

44.  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
44

45. 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
45

46. MAIL IN THE HOME
LIFE BEYOND THE LETTERBOX
46

47. 47

48. 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
48

49. 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
49

50. 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 50

51. 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 51

52. 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 52

53. 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
53

54. 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
54

55. 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)
55

56. MAIL IN THE HEART
CREATING AN EMOTIONAL
RESPONSE
56

57. 57

58. 58

59. 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
59

60. 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
Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013
60

61. MAIL IN THE HEAD
HOW MAIL IMPACTS THE BRAIN
61

62. 62

63. 63

64. 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
64

65. 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
65

66. MAIL IN THE WALLET
HOW MAIL MAKES MONEY
66

67. 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)
67

68. 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
68

69. 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
Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013
69

70. 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
70

71. 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 71

72. MAIL IN ACTION
HOMEBASE
72

73. 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
73

74. 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
74

75. 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
75

76. 76

77. 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
77

78. 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
78

79. 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
79

80. 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
80

81. 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
81