Friday, January 17, 2020

The rise of digital brands using snail mail (2018)

The idea of having a mailbox full of actual mail seems outdated.

Print magazines are fading, more and more bills are paid online, and many brands have scaled back on printed catalogues, preferring to funnel resources into website upkeep and social media instead.

Yet over the last few years, brands — including hot, digitally savvy, direct-to-consumer ones like Casper, Harry’s, Wayfair, Rover, Quip, Away, Handy, and Modcloth — have taken to targeting customers in the mail.

If you’re in your 20s or 30s and live in an urban city, you probably have gotten, for example, a glossy, blue booklet from mattress brand Casper inviting you to check out its latest products. If you’re a woman in the same age range, you’ve probably been mailed a millennial pink pamphlet from no-makeup makeup brand Glossier.

Electric toothbrush startup Quip targets new customers via mailers.
Quip.

Perhaps you’ve tossed these mailers into the trash and moved on to your meal delivery kit. But maybe you’ve done exactly what these companies want you to do, which is to go to their site. Extra points if you buy something using the accompanying discount code found on all their mailings ($50 off of a mattress with the code MATTRESS50; $5 off at Glossier with the code Stamp!).

Why do these disruptive, online-first companies want to be our old school pen pals?

The rise of young, digital brands spending money to mail us stuff speaks to the cyclical progress of shopping trends. A decade ago, companies looking to reach customers would often buy email addresses from third parties. They’d do giveaways and, if existing customers handed over their family and friends’ email addresses, they’d offer discounts too.

Fast forward 10 years and the virtual mailbox today looks a whole lot like our parents’ IRL mailboxes back then: A total shit show. Our inboxes are overflowing with newsletters, real letters, ride-sharing receipts, lunch-sharing receipts, bills, fake bills, breaking news notifications, not-so-breaking news notifications, brand promotions, sales promotions, social media alerts, spam, and porn. How do we all stay on top of this?

Footwear startup M.Gemi sends mail to new and existing customers.
M.Gemi

The answer, as you probably know, is that we can’t and we don’t. Emails often get deleted without so much as being opened, regardless of how cheeky the subject line is.

“People our age get hundreds of emails a day, but they only get ten pieces of a mail a day, if that many,” says Pete Christman, the head of acquisition marketing at the shaving company Harry’s, which counts on mailers as part of its marketing. “From a numbers perspective, email is a much noisier environment.”

Advertising on social media has become increasingly difficult too. In case you haven’t noticed, which surely you have, brands are targeting you on social. And in aiming for the ideal consumer for sexy, digital brands, many companies are finding themselves in the same spot: targeting the exact same age group (millennials), living in the exact same areas (heavily populated cities), with the exact same income (middle-class).

This pond brands have to fish in is small and only getting more crowded, which explains why so many digitally-native brands turn to old-school retail methods like opening stores or buying billboards. It’s for this reason that mail is often a better way to catch the attention of new and existing customers than a Facebook or Instagram ad.

“The advertising world gets excited about things like digital and pours money into complicated ads when there’s limited opportunity because everyone is trying to get in front of the same people and there are limited users,” says Christman.

Facebook often raises its ad prices as they become more effective, and so the cost of customer acquisition — the term marketers use to determine how much it costs to make you buy something — keeps climbing. The cost of a stamp, on the other hand, is not up to Mark Zuckerberg.

“Direct mail went away for a while, but more digital brands are seeing how well it works as strong marketing,” says Cheryl Kaplan, the president of DTC footwear company M.Gemi, which sends attractive, thick-papered pamphlets to new and existing customers. “It’s a different way to speak with customers who are sick of the ads they see on Instagram.”

But while customers might be sick of ads on Instagram, they’re not sick of ads that look like Instagram. Today’s mailers have a distinctly modern feel.

“It used to be that the way to stand out was to look like you were screaming,” says Kaplan. “It’s very different now. You want to get your point across quickly, otherwise you go in the garbage, but you don’t want to just be sending old post cards that are shouting.”

Instead of pages crammed with products, pricing, and discounts, there are some key characteristics in common. Mailer ads pretty much adhere to the same style rules, a look many startups already share. Products are drenched in high-flash photography, bold type, matching color pallets, and cheeky — but not too cheeky — catch phrases. While older mailers were about sending the most amount of messages possible, Kaplan says the goal is to “storytell, in a bold, interesting voice” with specific fonts and colors. And even if it ends up in the trash, the quality and weight of the paper matter too.

While brands like Glossier and M.Gemi choose to mail pamphlets out on their own, more companies are opting for a way in which they can share the costs: group mailers.

At some point in time, you probably have been mailed a thick, colorful envelope filled with promotional advertisements from many brands, all packaged and delivered neatly together.

On the front of the envelope, you’ll see an invitation to open it up for access to exclusive offers from “premium brands,” while the back is usually lined with the logos of the companies inside the envelope. Inside, if you get there, you’ll find glossy promotional materials for the brands, complete with bright colors and kitschy catchphrases.

Mailers that are split by brands from Share Local Media.
Share Local Media

One company that has mastered this type of mailing is Share Local Media, a mailer advertising company that’s been around for about two years, and specializes in working with digitally-native brands. Teju Prabhakar, the company’s CEO and co-founder, has a background in the world of digital. He previously worked at Quidsi, the fast-growing e-commerce company behind Diapers.com, which was acquired (and later killed) by Amazon. After moving to on-demand cleaning startup Handy, Prabhakar decided to start a mailer marketing firm in 2016 because he didn’t think digital businesses took the mail seriously enough.

“Everyone lumps direct mail with TV and radio together, and they are actually pretty different,” says Prabhakar. “I felt like direct mail could work really well if you get the right targeting format and you are creative.”

Share Local Media now has Instagram-friendly clients like Casper, Joybird, Lyft, Oars and Alps, ModCloth, Away, Jet.com, Rover, Hims.

People who’ve received these mailers have noticed how striking it is to get mail from startups, of all places, and have even joked about comparing Share Local Media’s envelopes to podcasts, IRL.

Share Local Media charges them a minimum of $15,000 for 30,000 envelopes, a cost that’s split between the companies in the mailer. Prabhakar’s team buys customer addresses and demographic information from the United States Postal Service and third party providers like your credit card company. It currently sends mail to customers in cities and the surrounding metro areas including New York, Boston, Nashville, Los Angeles, Atlanta, Houston, Omaha, Denver, St. Louis, and Silicon Valley, because of course.

Share Local Media works as a kind of gatekeeper, able to place like-minded brands together. After nabbing the few big fish (like Casper or Away), it attracts companies that want to be placed by their side. It can give veneer of startup cred to brands like Jet.com and Modcloth (both of which have been acquired by Walmart), while boosting the profile of smaller companies like TreeHut.co or Winc, which benefit from the legitimized glow of a big name like Overstock. Prabhakar adds that Share Local Media is also careful about which digital brands it picks up advertising mailers from, which is hardly a claim Facebook can make.

But not unlike Facebook, the company is able to provide targeted mailing thanks to a proprietary system that organizes addresses into categories, such as moms, people who’ve just moved, or residents of high income areas. Shared Local Media also does “look-alike” marketing, determining who the brand’s existing customer is and finding similar customers to mail envelopes too. This is exactly the way Facebook helps brands target audiences online, except as Christina Carbonell, the co-founder of kids clothing company Primary, notes, “you give an offer that the person can hold onto. It’s hard to do that in a banner ad.”

As anyone who’s actually bothered to open one of these envelope knows, discount offers are what really matter to customers. Prabhakar advises that every brand puts in “value prop that compels a customer to take action” — a.k.a a coupon code. This, of course, is one of the oldest retail tricks in the book, dating back to when Coca Cola introduced the concept of a coupon in 1887 by offering a free glass of Coke as a way to introduce the drink to shoppers.

Science has studied how coupons can cause a rise in oxytocin levels. Psychology Today has reported on how shoppers prefer to buy products they have coupons for, even if it means spending more money on a product because it provides “smart shopper feelings.” More analysis of the coupon industry has found that 57 percent of shoppers will buy from a company for the first time if they are presented with a coupon.

Coupons don’t automatically mean a purchase, but Kaplan, of M.Gemi, believes offering a discount code is essential to this type of marketing because “you have to give customers some sort of experience, whether it’s free shipping or a discount.” Plus, in typical tech startup fashion, coupons are a great way to track customers. Prabhakar says his clients can “easily run a match between the addresses a mailing was sent to and the addresses of purchasers.”

Share Local Media
Share Local Media

Are mailers more effective than online advertising? That’s certainly up for debate. No company Vox spoke with for this story would share numbers that compared the response rate of mailers to digital advertising.

Shane Pittson, the head of marketing at electric toothbrush startup Quip says “direct mail piece URLs are more likely to be used than URLs from other offline marketing channels” and Christman, from Harry’s, advocates for the practice, noting that sending something to someone’s home can feel more intimate, which is true. But being targeted, unsolicited, at home could be at least as off-putting as being served an ad for a brand you Googled or talked about.

Glossy photography definitely looks better IRL, but it also essentially just ends up in the trash, just like everything else.

Fortunately — or unfortunately, depending on how much you enjoy being entreated to spend money — brands see mail as complementary to the rest of their advertising budget. It’s not an “if/or,” says Kaplan, but “is something that adds to the ways we can share our story.”



from Hacker News https://ift.tt/2SBWdtq
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