A blog for all things retail and licensing.

Mixing Digital and Direct Marketing to Reach the Right Customers

Guest Blog By Art Hall

How do you take an exclusively online marketing strategy and reap extraordinary results with the introduction of direct mail? The answer lies in a company’s data. When one of the nation’s fastest growing online retailers of healthy living products established success with its digital marketing efforts, the company looked to direct mail as a new channel in its marketing mix to reach more customers and drive growth.

Designing the Right Media Mix

When a company’s commitment is to stay at the forefront of its industry to benefit customers with high performance, affordable and safe products, its marketing strategy should replicate that excellence in its approach to customer engagement.

When the online retailer engaged directly with consumers, it was exclusively through its website, email campaigns, paid search and other digital platforms. Its digital marketing efforts had been also solely focused on communications to two key groups – look-a-like prospects and new movers. Their data contained some geographic and promotional history about their core customer, but that wasn’t enough. They came to validate that using other channels would allow them to spend effectively and ultimately grow and extend the business.

The marketing team also quickly realized that true strategic insights were lacking, so the company turned to Quad/Graphics for support in developing an insights-driven marketing approach necessary to build a successful direct mail campaign.

The program launched with the application of Quad/Graphics’ proprietary consumer research, along with data and market analysis in combination with tailored messaging and creative. Immediately, they discovered that adding direct mail to their media mix would optimize customer response and maximize ROI.

Applying an Insights-Driven Approach

The partners’ foray into an insights-driven approach to direct mail began with the overlay of demographic, lifestyle, and proprietary survey data to model customers who had bought a product for the home at one time and recently moved. This data combined with the tracing of new residential addresses enabled them to deliver highly personalized direct mail pieces that resonated with those target customers.

Historically, their customers had come from online advertising, so early on they had to model from people purchasing online as opposed to those who purchase from direct mail. It was a challenge they overcame when they concentrated on areas that had the highest penetration of customers.

This customer profiling strategy enabled the retailer to reach the correct customers with creative that resonated. The result was eye opening and the marketing team was quick to determine that they wanted to move their direct mail efforts beyond only mover customers.

The team continued to use data to glean insight on how prospective customers might consume media, as well as their attitudinal preferences, in order to identify new prospective customer groups, recommend data driven creative, and develop a contact strategy. Specific segmentation strategies combining a tailored format and messaging approach were rolled out in phases targeting look-a-like households, relocated customers, and new mover prospects.

Achieving Measurable Success

Since early 2014 when the retailer began to blend its digital and direct marketing, the company has drastically reduced test and learn times compared to traditional testing methods and recognized direct mail results in half the time.

They also avoided incurring operational costs to support limited test responders, and combined conjoint analysis including quantitative with qualitative insights to commission the ‘best of the best’ in optimization.

In calculating their return on advertising spend, the company was able to measure gross revenue realized for every dollar spent, which was $1.50 for modeled prospects, $4.00 for new movers, $13.00 for relocated customers, and $5.00 for customer upgrades.

The measurable success of adding direct mail to its marketing mix demonstrates that the application of new multichannel approaches can drive continuous growth for an online organization.

Art Hall is Multichannel Sales Consultant of Integrated Data Solutions at Quad/Graphics

The Surprising Downfall of Crowdfunding

By Stephanie Crets

Have you ever donated to a Kickstarter campaign that had a really awesome product idea? And once it got funded, did you find yourself waiting around for months and months wondering if you’d ever get your backer reward delivered? You’re not alone. In fact, only 20 percent of crowdfunded projects are delivered on time.

Many people who utilize Kickstarter or other crowdfunding resources may have a great idea and plan in theory, but have little idea how to go into full production to execute their innovative new product.

Riverwood Solutions, an innovator in managed supply chain services and operations consulting, revealed a new solution that will help crowdfunded projects through the full product realization lifecycle.

“Without the experience that comes from having done this before, there is the specter of unknown unknowns being faced, which sometimes lead to the wrong priorities being picked,” says Pat Meagher, executive vice president of product realization at Riverwood Solutions. “There is a tendency to address the ‘low-hanging fruit’ first, but oftentimes it is important to commercialize the components that have the highest failure potential for failure and/or difficulty first, allowing time to do it over again and get it right. “

This service will fill a critical aspect that is lacking in the current market. It will offer a simplified process for small and emerging companies and will cover detailed product engineering from concept and development to pilot manufacturing.

Thanks to his work at his past company, Flextronics, Meagher has seen hundreds of products commercialized and has refined a new product introduction process to assist these companies into the full realization of their products. “I have deep relationships with offshore, low-cost, quick-turn engineering companies allowing us to scale quickly within a disciplined system and manage cost effectively,” he says.

Another issue with crowdfunded projects is the true cost of bringing these products to fruition. “Many of the crowdfunded projects I have been involved in greatly underestimate these costs when planning and are going to suffer the consequences,” Meagher explains. “One of our lessons is pay now or pay later, but realize that paying later is exponentially more expensive. Also, realize that this does not mean we don’t continue to innovate, improve and even breakthrough and challenge traditional notions.”

Riverwood Solutions services’ prices are consistent with what is required to execute these projects. But companies that need Kickstarter to fund their products should take into account the cost of these services and beyond. Many aim for a lower number to reach their funding goal, but then lose out on more money in the long run.

Meagher encourages small and emerging companies to use services such as Riverwood Solutions’. “A lot of companies that work with us have been radically transformed,” he claims. “Reach out to us and we will see if we can help.”


New York City Wine & Food Festival is Fast Approaching

By Stephanie Crets

Tickets for this year’s Food Network New York City Wine & Food Festival (NYCWFF) are on sale now! This Oct. 15-18, chefs, culinary icons, consumers and more will come together for this delicious, fun-filled, educational festival.

But first, let’s throwback to last year’s NYCWFF. More than 55,000 people of all ages, backgrounds and culinary interests attended the 130, 000-square-foot festival. Although 57 percent of attendees were based in New York, people came from all over the world to attend, including foodies of Australia, England, Switzerland, Guatemala and Brazil.

The festival featured:
• 30 exhibitors
• 75 wine and spirit suppliers
• 80 chefs and restaurants
• Hundreds of events

NYCWFF stretched out at more than 50 venues across the city throughout the three-day festival with late night parties, educational seminars and private dinners with world-renowned chefs.

Not just a celebration to rub elbows with the culinary world’s greatest, NYCWFF also raised more than $1 million for the Share Our Strength’s No Kid Hungry Campaign and Food Bank for New York City. After seven NYCWFF events, it has raised $8.5 million for these causes.

RM’s favorite event was the Blue Moon Burger Bash, hosted by Rachael Ray, where 30 contestants faced off to create a delicious, unique burger experience. The winning burger was the “Lamb-Marc” by Chef Marc Murphy, which featured spiced ground lamb meat and mint chimichurri. Delicious, but strange!

This year’s festival plans to surprise and delight, as it does every year. Attendees can look forward to celebrity events with Bobby Flay, Martha Stewart and Whoopi Goldberg, along with wine tastings, sushi presentations and intimate dinners with chefs.

We can’t wait to see what the festival has in store for us this fall! See you there!

Get your tickets to NYCWFF here: http://www.nycwff.org/tickets.php

How to Leverage Beauty Influencers to Launch your Latest Product

By Shana Starr, Managing Partner at LFPR, LLC

Tapping into influencers as brand advocates when launching a new product in the beauty industry is rapidly growing as one of the most popular strategies to launch a brand to millions of active consumers. The problem with relying solely on this launch strategy is that many brands think this approach is simple, quick and easy. The truth is that while using influencers as a path for exposure is a great way to expand a brand’s audience, reach should be factored into marketing and PR plans when a product is ready for retail; the problem is that it isn’t all that easy when done correctly. As a way to get the most out of a relationship with influencers at launch, employ these four following tactics:

1. Target the influencers you want to partner with by making sure they identify with the qualities of the product you are launching. Don’t just go after those with lots of followers. Sometimes the biggest influencers aren’t the right ones for what you are launching. Be specific about the results your beauty product will produce and make sure those align with the person you are partnering with. Do they talk a lot about subjects that relate to what your product solves? Are they current in language and approach? Do fans trust their opinions or does everything come across as a “paid” endorsement? These are all great questions to ask when identifying the right influencer to launch your product.

2. Don’t rely solely on the influencer endorsement as your only social strategy. Make sure to add into the blogger contracts that they should videotape themselves using your product. Compile the videos and create a YouTube channel with them all. This might cost you – but is definitely worth it! Make sure that your brand is reaching out with additional tweets and pictures of the influencers and that you are cross promoting the endorsements on your website and on all social platforms. Again, take the time to make sure these messages connect with the influencers’ story and their audience. It’s a waste of time and money to create marketing messages that won’t connect with what they are interested in and if it doesn’t come across organically.

3. Approach your new product launch like it is its own brand so that the launch is well rounded to include PR, events, subscription box targets, media tours and product photos and videos. Kick off a product review program prior to engaging with your influencers so that if Googled, additional reviews either appear or will appear on the day of the endorsements. It is also extremely important to make sure that, when you’re introducing new products, you go beyond just the consumer. It is more than likely that your audience includes trade media, retailers, makeup artists, salons, skin care associations or maybe even clinicians. Make sure you are reaching out to every audience that will support wide-spread awareness of your latest product!

4. Consider a coordinated flash sale or giveaway on the day of the influencer campaign. It is a great way to build buzz, connect with new consumers who love a good deal (who doesn’t?) and bring urgency to the campaign. As a way to extend your relationship with your targeted influencers, send them your product for a giveaway contest for their followers. This is another tactic that will add an additional layer of promo power to your product launch.

Influencers are powerful and can have a big impact at launch, but it is important to consider all the angles and not solely rely on the influencer’s reach. By combining this suggested approach in working with them, your product will be better positioned for the attention it deserves.

Best Tech for Managers to Keep Tabs on Their Store

Poor collaboration can kill your company and increase failures in the workplace, according to Salesforce. In fact, 97 percent of those surveyed think a lack of alignment with their team impacts the outcome of a project. To stay on top of your business, you need to do more than just stay in touch with your employees when you are out of the office. Instead, carefully pick and choose technology and collaboration tools to monitor what’s going on in your store even when you are out.

Set Accountability Measures

Do you really know what your employees and customers are up to? Establish a protocol for when you step out of the office to keep accountability among your employees. Set up a Google spreadsheet with a list of tasks ranging from running sales reports to organizing inventory and break schedules. Ask employees to log on and check off pre-designated tasks. Then, you can log on from a smartphone or tablet to look through the tasks to ensure the business is running smoothly. For longer errands and outings, ask for a brief status report on a Google doc or text message to stay on top of the latest developments in your store.

Stay in Touch Virtually

Using a smartphone is an obvious choice for keeping tabs on the office, but not all devices are created equally. Pick up a Samsung Galaxy S 6 with a free 128GB memory card to store more data, photos and videos. Ask employees to occasionally send over an image or video of what’s going on in the store. For example, you may need to see how promotional signage looks to pick up more supplies and inventory before heading back to the office.

Use an Electronic Gateway System

Rethink your electronic payment gateway, and switch to a system that makes it easy for you to log on remotely while doing errands or at a meeting. Choose a system that allows you to virtually access a transaction report. You can usually narrow down the search option by a credit and refund search to see how many customers are coming in for returns and how many are looking for your sale or newly stocked items.

Leverage Team Communication Tools

Incorporate a team communication tool like HipChat or Slack so owners, managers and employees can all stay on the same page. The idea is to use one central platform for both communication and tasks to keep tabs on the big picture of your business.

HipChat allows users to share comments and videos, and it integrates with services like Dropbox and Twitter. Store managers can ask employees to send out tweets alerting followers to new sales. Or, use Slack to monitor the tweets before sending employees a video file to look at for future social media posts.

Use a Webcam

Set up a basic webcam to see what customers and employees are up to for simple monitoring over your smartphone or tablet. Send back texts or notes to employees to ask questions or assign new tasks. For something more robust, try a security camera with remote access or get innovative with your options. Some stores use department store mannequins outfitted with audio and video recording capabilities. Ideal for large stores, managers can keep tabs on what customers are doing on multiple floors and ask employees to address issues as needed.

Etsy Celebrates 10 Years

By Stephanie Crets

If you like to make and sell Shrinky Dink jewelry or have an abundance of vintage clothing to sell, Etsy is your go-to. It fosters not only an environment of creativity, but also a social connection.

While the site works wonders for a consumer looking for a one-of-a-kind art print or vintage bag, it brings people of an entrepreneurial spirit together. Before Etsy, most people were limited to selling their creations and vintage items on eBay or a personal site, but Etsy takes the hard work out of that, allowing people to focus on crafting, creating and making money for their hard work.

This month, Etsy celebrates its 10th anniversary. Its meek beginnings in a Brooklyn apartment in 2005 have evolved into a successful platform for people of all countries and talents to sell and buy goods.

On his blog, Chad Dickerson, CEO of Etsy, writes, “Over time, Etsy has come to represent something even more powerful: an alternative to traditional commerce and a different, people-centered model for doing business.”

As of this year there are:
• More than 1.4 million active sellers running their own businesses on Etsy;
• 32 million items for sale;
• 717 Etsy employees;
• 20.8 million active buyers;
• Over 2 billion favorite listings; and
• Over 500 million conversations between shoppers and sellers.

“Over the last 10 years, we’ve built an authentic, community-centric global and local marketplace,” Dickerson writes. “It’s a collaborative endeavor that is nourished by the connections between everyone in our ecosystem.”

For more information about Etsy’s 10-year anniversary, they’ve developed a special site.

Gap Losing the Battle for Relevancy in the Market

By Stephanie Crets

Due to low sales, 175 underperforming Gap stores are closing across North America, along with the chain eliminating more than 250 corporate jobs. Store sales have been in decline for the past five quarters and this action is an attempt to save and revive the leftover stores. Once these stores are closed, Gap will be left with 500 regular retail stores and 300 retail outlets. And it projects to be saving $25 million by 2016.

But what Gap really needs to save is its brand.

With the retail industry evolving so quickly, retail stores have to keep up with the changing trends in innovation, relevance and consumer preferences. Shoppers no longer look for brand recognition; they want the latest and greatest. And also the item that gives them the most value in the long run.

“While 10-plus years ago, consumers were satisfied to purchase a gray polo or t-shirt with a brand-name logo, today’s consumer is looking for original designs that set them apart from the person next to them on the sidewalk,” says Andrew Billings, senior retail manager at consulting firm North Highland Company. “As a result, retailers are having to focus more energy on creating truly new and differentiated designs.  Where many brands carry over a significant portion of their product line from year to year, today’s leaders have recognized the importance of presenting the consumer with updated products that capture the latest trends while still building on the brand identity.”

Staying relevant in the industry seems to be Gap’s biggest issue. Stores like H&M, Forever21 and Target all carry jeans and khaki pants these days, which are Gap’s staple in the clothing retail industry. Most of those stores’ merchandise is updated on a constantly revolving basis , while also being extremely low priced. This includes Gap’s sister store, Old Navy, which is succeeding where Gap isn’t. So, how can Gap differentiate itself from the pack?

“As multichannel customer interactions increase, retailers must create seamless customer transactions across those channels,” Billings tells RM. “The fashion consumer now begins her shopping journey on Facebook, Pinterest and other social media sites, first engaging with a product or brand outside of the store. … Many retailers still fall short of creating the seamless cross-channel experience.”

Gap needs to get creative and start utilizing the vast social channels the Internet has to offer. It’s not enough to be known for a specific product anymore; if you’re not updating it and reinventing what you have to offer, consumers will be more likely to find a retailer that has something new and unique on a consistent basis. This lack of innovation could be due to the fact that Gap’s chief creative director left the company this past January and has yet to be replaced.

“The consumer is more demanding than ever, and smarter,” Billings says. “Unlike the high-tech industry, consumers have realized that longevity and history do not necessarily translate into quality and value in apparel. And given the shrinking average closet life of fashion apparel products, style-conscious consumers are prioritizing design creativity and taking more risk with their purchases.”

Perhaps a new creative strategy, including the digital market, can breathe some life into Gap. Otherwise, we might be hearing about some more store closings in the coming years.


Why Does a Retailer Need a Mobile App?

Many stores do not have a store-specific app for their customers, which could be detrimental to sales in the long run. People like to pre-shop before getting to the store to see what’s available and if your customers can’t easily access your merchandise via mobile, they may head to a competitor instead. The following infographic illustrates why it’s important for all retail stores to utilize the growing popularity of mobile apps. Nearly every consumer is connected online and most of them via a smartphone, so retailers need to capitalize on this trend because it’s not going away.


Infographic by SMS Store Traffic

Think Outside the Bottle

By Stephanie Crets

During summer music festivals, the heat is oppressive and dehydration happens easily. So much so that one might get extremely dizzy in the middle of a large crowd. Which is exactly what happened to me a few years ago at Lollapalooza in Chicago. Upon arrival to the first aid tent, I was handed not a bottle of water, but a box of water. Initially, I thought this was a bizarre way to drink water, but I learned that Boxed Water’s design has the environment in mind.

Boxed Water’s packaging is made of BPA-free material, with 76 percent being made from paper. And it’s recyclable. This can make a huge difference when only 13 percent of plastic bottles are recycled every year, according to the NRDC, while the rest end up in landfills, not decomposing for thousands of years.

To get this message out, Boxed Water has teamed up with Banana Republic to reach a new audience and put its product directly in consumers’ hands. It will be featured in 11 flagship stores across the United States and Canada. The campaign will encourage Banana Republic customers to pick up a free 500 mL sample of Boxed Water while they shop.

“Our partnership with Banana Republic demonstrates how fashion and design can help to communicate a positive environmental message,” says Jeremy Adams, vice president of marketing for Boxed Water. “These campaigns aim to engage consumers in helping us improve the environment while spreading word about our water and mission.”

Boxed Water is also becoming more prevalent on retailer shelves, having recently scored national distribution across 400 Target stores.

“You can definitely expect us to continue creating unique partnerships with retail,” Adams tells RM. “With thousands of new grocery, mass and club stores coming online across the country this year, you can expect new partnerships and merchandising in more traditional water retail outlets. “

Aside from getting its environmentally friendly message out, Boxed Water is using social media to have a direct impact through its Retree Campaign. For every fan that shares a photo of his or her Boxed Water with the hashtag #ReTree, the National Forest Foundation will plant two trees in our nation’s forests. So far, Boxed Water fans have planted more than 20,000 trees.

“We believe that the key to unlocking the environmental benefits of ‘everyday change’ is changing culture,” Adams says. “Moving forward, you can expect Boxed Water to continue to take a unique approach to marketing, to develop unexpected partnerships and to continue to be at the forefront of the movement for everyday change. With new distribution at national retailers like Target and thousands of new grocery stores added this year, you can also expect to see Boxed Water partnering in big ways with more traditional water retailers as well.”

The Internet of Things

By Stephanie Crets

So, what the heck does “the Internet of things” actually mean? According to Michael Higgins, vice president of marketing of Hussman Corporation FMI Connect, it’s actually “the Internet of your things.”

And your “things” are mainly smartphones. They are connected and embedded not only in our daily lives, but also with all other electronics, software and sensors. Because so many people have a mobile device these days, and more often than not, have it with them while shopping, smartphones offer a multitude of data for retailers.

“There are 5 billion smartphones and only 4 billion toothbrushes in the world. That’s kind of scary,” Higgins says.

Experts from Brookings estimate that the Internet of things will consist of nearly 50 billion objects by 2020, which gives retailers an overwhelming amount of data to analyze. All of this data can seem daunting and noisy, but retailers should just use the data where it makes sense for them.  “If data is important to you, it’s not noise,” Higgins explains. “It’s how you use it.”

Retailers can use data to answer questions such as:

  • How do you engage shoppers?
  • How do I make sure my infrastructure is optimal?
  • Is the supply chain in line with customers?

All retailers will have a different strategy. Higgins suggests that the first step is to get data into the cloud to start analyzing and developing business strategies tailored for your specific industry. It doesn’t always have to mean putting new devices in place, so continue to utilize smartphone analytics.

“Retail is very local and very personal,” Higgins says. But by utilizing the Internet of things through shoppers’ smartphones, we can begin to understand consumers’ habits and preferences, reach them better and give voice to the retail experience.