The world of e-tail is inhabited by two distinct groups. The first concerns those brands that originated offline — either operating on the high street or as a traditional mail order retailer — and have gone on to embrace ecommerce as another route to market.
The second group could be termed pureplay e-tailers; online brands that were born out of the dotcom revolution and which do not exist in any tangible form, from a customer perspective, outside of the digital environment.
Because this latter group solely inhabits the online space, few, if any, have seen the need to engage audiences with offline marketing, bar limited forays into above the line with the television advertising carried out by larger and more established brands like eBay and play.com as near lone examples.
Most pureplay e-tailers will instead be proficient at online marketing, from email or search to online display advertising. Investment in social media activity is also on the increase, in an effort to increase online footfall and sales, though many are still finding their feet in this more complex communications environment.
But could these brands achieve even greater marketing success and ROI from exploration of more direct techniques, in the offline space — especially if they combine these tactics with the wealth of customer insight they have access to?
The very nature of a pureplay e-tailer and the way it interacts and transacts with its customers means it is privy to potentially more customer data than its offline counterparts. When making a purchase, customers need to provide at least basic contact and address details, and there is scope for much more in the way of intelligence and insight to be captured.
Beyond recording those products purchased, a smart e-tailer will be able to monitor the behaviour of individual customers as they browse the site, recognising the kinds of products they view, and identifying more about them from the way they browse.
Even recognising simple traits, like a customer who spends longer looking at product images or one which returns to the same product page over several visits before finally committing to the purchase, can help to build an accurate picture of the individual; insight which can be used to drive more relevant and effective marketing.
The leap for the pureplay comes in applying this insight to offline direct marketing.
The presence of greater customer insight provides the perfect set-up for a more traditional direct marketing approach. Direct marketing relies on data to drive timely and relevant marketing messages through the channels most appropriate to each individual consumer.
And while the internet and associated digital channels have progressed in complexity, so too has direct marketing, not only through better segmentation and targeting but also in digital print. In the case of tangible marketing material like direct mail, brochures and catalogues, brands need no longer send the same piece to every customer.
Instead, digital print has the potential to personalise everything from the customer's name to the content of a brochure, and even the way the pages are designed. Already many 'offline' brands are invigorating the use of brochures and catalogues: Retailers like Tesco and Sainsbury's use them to present customers with a wider range of mail order products than could be stocked in every store, and other mail order brands invest in highly personalised catalogues, using customer insight to improve content relevance vastly.
So why don't pureplay brands engage customers in the same way? Many will assume the cost will be prohibitive, especially in the context of the sales they already generate through online media. But, without ever having used a personalised catalogue, for example, how can these brands truly gauge the effectiveness of such a dynamic and targeted form of one-to-one marketing in generating sales and improving profits?
What's vital to remember is that every customer will make their purchases in very different ways. Some will see a product on the high street, research it online and place their order by phone. Others will use an ecommerce site for the entire process, responding to an emailed offer and clicking straight through to the checkout. But there also exist customers who enjoy flicking through a catalogue before placing an order.
High street and mail order brands continue to produce these marketing materials, so by default they must still be welcomed by many. Even if the customer ultimately makes their purchase online there may still be merit in providing a printed catalogue, especially if it can be personalised and relevant to the individual. The presence of a quality direct mail piece can move your brand from one the customer only sees when they are at their PC to one with a presence elsewhere in the home too.
However, underlying this opportunity is the cost involved. It's not necessarily a cost efficient (or environmentally friendly) move for a pureplay to create and mail catalogues for its entire customer base; some may be welcomed and used by customers, but many others will simply be discarded.
A pureplay is unlikely to possess much understanding of how an individual will respond to a catalogue because its only experience is of interacting with customers online. However, intelligent analysis of existing customers can combine with testing and modelling to overcome this. In very simple terms, customers who request a catalogue (on website or via email for example) can be used as a base group to represent the type of customers who may welcome receiving one. A model can then be generated to identify other like customers who may use a catalogue to support their purchasing habits.
Further efforts can be made to optimise this activity, so brochures are sent to those customers who will genuinely use them. A clear indicator could be making a brochure-only offer (such as free postage) to gauge which customers are using offline material before making an online purchase.
Optimisation models should also be used across all marketing activity, online and offline, as a means of balancing channel spend and to give freedom to experiment with alternative marketing techniques without blowing the budget and risking the overall success of campaigns. Any savings made from optimising one channel or campaign can be re-invested in alternative media, or can support the re-deployment of the media mix.
Of course, marketing response must be maintained or enhanced by any foray into offline marketing, or as a result of channel optimisation. We've shown how this works with clients, generating an average saving of 28% on the cost of communication, while retaining 95% of response.
The ultimate goal of this activity must be to secure sales, but it should also be viewed as a way to engage customers in the offline space — something pure internet brands can fail to achieve. If this engagement can be monetised, so that the introduction of a personalised catalogue (tapping into online insight) generates sales as well as loyalty, then it should be explored further.• Nick Evans is a consultant at Jaywing DMG, a digital agency that helps its customers make the right business decisions by "doing smart things with data"