Nordstrom recently cut this year’s forecast for sales and profits after first-quarter results fell short of expectations. This was due in large part to a failed rollout of a new loyalty program.
According to Nordstrom co-president Erik Nordstrom, the company stopped using direct mail to send rewards to loyalty customers. The goal was to get the program online and reach customers faster. Instead, the change in strategy resulted in a reduction in foot traffic in all stores. Many customers, Nordstrom said after the plan failed, expect to see loyalty rewards delivered by mail.
Nordstrom shares dropped more than 9 percent after this announcement.
Keep in mind that this isn’t an outside observer offering an educated guess about the reasons behind the first-quarter flop. This came directly from a Nordstrom executive — Mr. Nordstrom himself, as a matter of fact.
Meeting Customer Expectations with Direct Mail
Mr. Nordstrom admitted that by stopping direct mail, they failed to live up to the expectations of their customers. Brick-and-mortar retailers that are struggling to manage competition from e-commerce channels must be careful not to abandon marketing that has been effective for decades.
Humans are creatures of habit. Consumers have grown accustomed to hearing from their favorite retailers and brands by mail. Not only are they used to it, but they want and expect to find out about relevant offers and promotions by mail. They want to hold coupons. They want to flip through catalogs.
Instead of bailing on direct mail in the name of speed and cost reduction, retailers should be looking to reinforce and strengthen their direct mail campaigns with multi-channel strategies that seamlessly integrate online and offline efforts.
Case in Point: Williams-Sonoma
Williams-Sonoma recently announced better-than-expected earnings in the first quarter of 2019 and a 21.5 percent increase in share price for the year, which is nearly double the increase for the retail industry as a whole.
Why the strong growth at Williams-Sonoma? The company has invested heavily in both e-commerce websites and direct mail catalogs. They also continue to fine tune brand merchandising, catalog circulation, and digital marketing to improve effectiveness and efficiency.
Williams-Sonoma, which now relies on the web for more than half of its business, is said to be “a highly customer-centric company” with a “focus on enhancing the customer experience through technological innovation.” Direct mail is a vital cog in that wheel.
Recent Data on How Direct Mail Impacts the Path to Purchase
According to research from PebblePost and Murphy Research, 82 percent of retail purchase decisions are discussed at home. 76% of shoppers discuss relevant mail from a retailer or brand they know. Six in 10 say direct mail has influenced their purchase decisions.
Needless to say, the case for direct mail in retail has never been stronger.
Retailers and brands need to align direct mail and digital marketing strategies to increase sales on every channel. Let us help you unleash the power of direct mail as part of a multi-channel strategy. Contact us to get started.
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