Margie Dana

Goodbye Mass Mailings: Technology and Targeted Direct Mail

by Rachel Kaufman

I read this great post on www.sap.com recently, and it was exciting to see how a major retailer is personalizing catalogs. I got permission from SAP to reprint the post here. Enjoy!

When Macy’s Inc. wanted to improve sales from its catalog, the company turned to dunnhumby, an analytics firm specializing in giving customers personalized shopping experiences.

Katherine Black, senior vice president of client leadership, worked with Macy’s to create customized versions of its catalog. For customers who bought shoes, the catalog contained more shoes. For customers who bought linens and towels, the catalog contained more linens and towels.

It ultimately ended up with half a million versions of the catalog.

No big deal, Black said. “In the grocery space, there are millions of different versions” of one mailing.

Companies have been personalizing your mail for years. Think of the credit-card offers you get, where your APR is printed in perhaps a different font. That may be because it was “lasered in” after the rest of the brochure was printed, to customize the offer just for you.

But customized, targeted direct mail is getting only more sophisticated.

“If you think about a grocery basket, or a shopping bag, every bag or basket’s going to have a different composition to it,” Black said. Each shopper is unique. And acknowledging that can be a big boon to retailers.

“The more loyal customers you send [the customized catalog] to, there can be some very strong lift to it,” Black said. “For your most loyal customers, there’s a big payoff. You have a really consistent lock on what they buy, and they really appreciate being able to save money or even just see more of the type of items they’re interested in to draw them into the store.”

The customized Macy’s project was pretty tricky, Black said, because it involved full-color printing, different layouts on the pages, and different numbers of pages. Other retailers like grocery stores, by contrast, can print one mailer and slot in discounts for eggs or cheese or pizza where necessary. Could those mailers someday be individually personalized, so every single household served by a grocer could receive a 100% customized pack of coupons? It’s not out of the question.

Fashion, however, is moving in the other direction, Black said.

“The technology could exist,” she said. “I think many of our clients are trying to understand where direct mail is going in general, though.”

With so much commerce moving to the Internet, printers are reluctant to invest in new equipment without a guarantee of a high volume of work. “With the media landscape evolving as it is, that may or may not make sense,” she said. Instead, many companies, including Macy’s, are moving online, where customization is much easier and cheaper to do.